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Is it a huge profit to buy a mining machine? Risk reminder for Crust mining without currency pledge



Recently, investors have turned their attention to the track of distributed storage. Filecoin has been rising all the way, while Crust has soared to 1102 yuan on the evening of April 11th. Seeing that the bull market in the distributed storage industry has started, especially the recent star project Crust has become more and more popular, but is buying a mining machine and investing in Crust mining necessarily a huge profit? In the past few days, there has been a shortage of tokens (hereinafter referred to as Token) on the Crust preview network, and it is very likely that there will be no token pledge and empty mining. This article analyzes it, aiming to help miners make rational investment decisions, and at the same time guide more CRU holders to participate in the pledge. While obtaining pledge income, token holders can alleviate the phenomenon of mining machines without token pledge, and promote the sound development of the Crust ecology. Although they are both distributed storage projects, due to the different consensus mechanisms between Filecoin and Crust, the design of Token's pledge mechanism is also different, and the design of Token's pledge mechanism is crucial to the long-term development of the network. The design of the pledge mechanism of Token should not only consider the cost of miners joining the node, but also consider the cost of sector failure and fines, and at the same time, it can motivate miners to maintain the stable development of the network for a long time. 1. Filecoin's pledge mechanism There are three pledge mechanisms in Filecoin: pre-pledge, post-pledge, and market pledge. The role of participating in Filecoin network pledge is mainly miners. The pre-stake consists of two parts: the first part is to pledge FIL after the data sealing is completed, and to urge the miners to complete the proof process of the sealed data. This part of the pledge will be released before the completion of the sector certification; the second part is to complete The pledge is made when the sector is certified, and it will be released once the sector expires. Post-staking refers to the block rewards that miners get through mining, 25% is released first, and the remaining 180 days are released linearly. FTX founder SBF's encrypted wallet will be investigated by U.S. authorities: Golden Finance reported that according to the latest report, federal prosecutors are investigating a series of cryptocurrency transactions that online analysts have linked to FTX founder Sam Bankman-Fried. associated with a digital wallet. Data tracker Arkham Intelligence estimates the funding at more than $1 million. However, SBF previously claimed that he only had $100,000 left in his bank account. [2022/12/31 22:18:32] Market pledge means that client data transactions need to pledge a certain amount of FIL, so as to ensure the normal progress of market transactions. Because the computing power of the entire network is small in the initial stage of the network, a single sector seal requires a high token pledge. In order to pursue the rapid growth of computing power, miners need a large amount of FIL for mortgage. However, because of the limited circulation of Token in the network, miners can only pass Various methods such as borrowing and trading platform cooperation are used to raise FIL. In Filecoin's current economic model, there are two main situations in which the pledged coins will be deducted: one is that when the sector certification is not completed in time during the sector sealing process, the first part of the pledged coins in the pre-stake will be directly destroyed; the other is One is that a problematic sector is found during the WindowPost process, and part of the pledged coins will be destroyed. 2. Crust's guarantee mechanism Crust only has GPoS pledge, that is, the CRU of node staking can be self-owned or from the guarantor. In order to attract guarantors to guarantee for them, nodes need to pay guarantee fees. The guarantee fee rate is set by the nodes themselves, and guarantors choose the guarantee income they are willing to accept to guarantee the nodes. When the guarantor chooses the node guarantee, he also needs to bear the risk of the node being punished. If the node is confiscated by the system because the penalty mechanism is triggered, the guarantor will also be confiscated according to the guaranteed ratio. Binance Chief Strategy Officer: Hope to use the Twitter platform as a "sandbox" to deal with Web3 issues: On November 2, according to foreign media reports, Binance Chief Strategy Officer Patrick Hillman said that Binance spent 500 million as an equity partner The US dollar assisted Musk in acquiring Twitter, hoping to use the social media platform as a "sandbox" for dealing with Web3 issues. Binance is seeking to be a key partner in Twitter's growth and innovation, and is turning to "Web3 solutions" to solve challenges on the social media platform, such as whether Twitter can create "small microtransactions" as a payment system. Hillman said that the bot problem has damaged the crypto community's use of Twitter to speak freely, and payment strategies can be used as a way to defend against bots. "Being able to solve the bot problem is critical to restarting a healthy conversation around encryption." (CoinDesk) [2022] /11/2 12:07:40] Crust’s Staking module’s punishment mechanism for validators: at the end of each cycle, the network will detect validators, and when it is detected that validators are offline or maliciously attack the network, punishment will be triggered mechanism. The content-zce of the penalty includes deducting the mortgaged CRU tokens in proportion and removing the identity of the validator. The amount of assets confiscated due to disconnection is the maximum slashing ratio that occurs in a cycle multiplied by the number of tokens staked by the validator. As a guarantor, when the guaranteed verifier is punished, the guarantor's guarantee amount will also be confiscated accordingly. 3. Summary From the above, it can be seen that Filecoin greatly limits its liquidity through pre-staking, linear release and strict punishment mechanism, but at the same time avoids the risk of no coins to mine due to no-coin pledges. The consensus mechanism of Crust determines the ecology's demand for pledged coins. If there is no pledged coin in the ecology, and many coin holders in the ecology don't know how to pledge pledges to obtain benefits, coupled with the increase in node pledge costs, miners will face With the risk of idling without currency pledge. Data: Grayscale Bitcoin Trust has a negative premium rate of 35.18%, a record low: It will be closed on September 25. According to the latest data, Grayscale Bitcoin Trust (GBTC) currently holds Bitcoin (BTC) accounting for 20% of the total supply. 3.12% (more than 640,000 bitcoins), the negative premium rate reached 35.18%, a record low. (Cointelegraph) [2022/9/25 7:20:04] 1. Analysis of Filecoin’s payback situation Analysis of Filecoin’s payback situation analysis targets selected top students among Filecoin miners. The pledged currency is required to be 9.7 pieces/T, and the gas fee is 5 T. The effective computing power of the mining machine is 1800T. The data on April 13 shows that each T can produce about 0.09 coins. The cost of the mining machine is 3.72 million yuan/unit, and the miner A 15% technical service fee is charged, and the price of FIL currency before the publication is 1068 yuan. Calculate the daily income and payback period as follows: Mining daily income = 0.09*1800*1068*85% = 147,063.6 yuan pledged currency cost = (9.7+5) * 1800*1068 = 28,259,280 yuan Filecoin mining payback period = (3,720,000+28,259,280)/147,063.6≈218 days 2. Analysis of Crust’s payback situation. The data of a Crust mining machine on April 13 shows that the daily production of coins is about 4 coins. The cost of the mining machine is 168,000/unit, and the miner charges 15% As of now, the price of CRU currency is 890 yuan. Calculate the daily income and payback cycle as follows: The Brazilian House of Representatives may approve the cryptocurrency bill this week: Jinse Finance reported that this week, the Brazilian House of Representatives may approve the cryptocurrency bill introduced earlier this year. According to federal government leader Ricardo Barros, the bill will be discussed, but there are still no reports of a possible vote as the House of Representatives will also be discussing other bills. The bill, approved by the Brazilian Senate in April, aims to regulate cryptocurrency exchanges by creating a single regulator to deal with the issue. Likewise, the bill also legalizes cryptocurrency mining and creates tax-exempt rules for mining companies that propose green projects that use 100 percent renewable energy to build mining farms. ([2022/8/3 2:56:45]=4*890*85%=3026 yuan Crust mining payback period=168,000/3026≈56 days But the above is based on the free pledged coins Based on the above calculation, assuming that half of the income needs to be distributed to the pledged currency provider, the mining payback period is about 100 days. Although the Crust payback cycle looks very attractive, the impact of pledged coins on Crust's income is extremely important, so Crust's payback cycle has a big premise: enough pledged coins can be guaranteed. Now, with the rise of currency prices, the investment principal of miners for their own mortgages has increased, and they are also facing the risk of increased guarantee rates. 1. The rapid expansion of miners Compared with Filecoin, Crust's achievements in such a short period of time are undoubtedly very impressive. Recently, with the gradual implementation of Crust's distributed storage applications and the establishment of Crust grants, the Crust project has attracted more and more attention: there are miners accessing storage resources, developers participating in ecological construction, and Crust secondary markets Investors, there are also miners who have participated in Filecoin in the early stage. With the participation of more and more miners, investing in Crust mining already has the risk of insufficient pledge coins. The carrying capacity of Lightning Network is currently 3297.92 BTC: According to Jinse Finance, according to data, the number of nodes supporting the network has reached 31814 at present, which is an increase of 4.99% compared with the data 30 days ago; the number of channels is 83328, compared with 30 According to the data a few days ago, it rose by 3.3% from the previous month; the carrying capacity of the Lightning Network is currently 3297.92 BTC, which is about 158 million US dollars. [2021/12/20 7:50:11] Due to the shortage of pledged coins on the preview network and the increase in the entry of miners, the Crust weekly report on April 12 showed that the single P full mortgage income dropped to 8.47CRU/day. Data source: Crust official website, Darling Think Tank As can be seen from the above figure, the number of miners has increased sharply, but the number of guarantors has increased relatively slowly, and the output per T has generally decreased. It can be seen that the risk of no currency pledge has been highlighted. Even so, there are still more and more miners joining, which leads to the rapid expansion of the miners' camp, which makes the risk of no currency pledge more and more enlarged. 2. Investment risk analysis Crust includes the workload proof layer MPoW, the blockchain consensus layer GPoS, and the distributed cloud storage/computing layer. The Crust chain uses the GPoS (Guaranteed Proof of Stake) consensus mechanism, which is a PoS consensus that uses storage resources as a guarantee amount. Similar to existing PoS projects, nodes need to pledge CRU tokens to compete to become validators. The difference is that nodes also need to provide storage resources to obtain the corresponding guarantee amount. Only with the guarantee amount can Stake a corresponding amount of CRU. In the Crust network, the pledge amount is obtained through the second layer mechanism (MPoW), which confirms the miner's local storage status through the protocol under the TEE technology chain. If a node/miner has a storage capacity of 1000Tb, then after the node is checked legally by the TEE program, it will make a signed workload report and submit it to the chain, and then convert 1000Tb into a pledge amount of 1000CRU. After the miners have the pledge amount of 1000CRU, they will compete to produce blocks. At present, the basic pledge corresponding to 1000TB of free storage resources in the Maxwell testnet is 1000CRU (5000CRU after the mainnet is launched), which can be expanded by storing meaningful files. The specific process is as follows (taking spare storage resources as an example): Data source: Daling Think Tank When the pledge of the entire network reaches a certain ratio, the fixed ratio relationship between the storage space and the upper limit of the pledge amount will change to a dynamic adjustment ratio based on the entire network. Has not happened yet, not considered for now. The current state of Crust is more inclined to the PoS model. After miners purchase mining machines and connect to the Crust network, they cannot generate income without the pledge of CRU, which is called air mining in the industry. In order to better sell mining machines, some miners will promise to provide miners with CRU pledge services when selling, lowering the entry threshold for miners. With the continuous access of mining machines, the demand for pledged coins continues to rise, and the remaining CRUs available for pledges in the entire network are getting less and less, which has entered a state of Token shortage. At the same time, with the rise in currency prices, many miners have been unable to cash out The promise of "include pledged coins" can only allow miners to solve the problem of pledged coins by themselves. And in the state of Token shortage, miners need to set a high guarantee fee rate after becoming a node to attract CRU holders to provide guarantees. If miners buy CRU by themselves, they need to invest unexpected funds. The price rise has been much higher than the mining machine itself, which will cause losses to miners with insufficient budget. Therefore, when miners buy mining machines, they must be alert to the excessive promises of some miners, avoid related risks, and avoid blindly investing or expanding the scale. The necessary conditions for Crust mining are storage capacity and Token pledge. According to the storage capacity of miners and the number of pledged coins, the maximum possible mining income can be judged. In the state of lack of computing power, Token liquidity is sufficient. After purchasing a mining machine, a small amount of funds can be added to meet the pledge, and more CRUs may not be needed to provide guarantees. A large proportion of mining revenue will flow to miners. In the state of Token shortage, mining can only be carried out with CRU as a pledge, so nodes need to increase the guarantee fee rate to borrow coins. At this time, the flow of mining revenue to guarantors increases, and it is more biased towards the PoS model. As the currency price is getting higher and higher, the risk of mining is getting bigger and bigger. The funds that need to pledge CRU are much larger than the investment of the mining machine itself. The measures that miners need to take are: 1. When there is not enough CRU for pledge , Small miners need to join high-quality nodes; 2. Large miners who become nodes need to set a reasonable guarantee fee rate to attract CRU holders to become guarantors to provide pledges, alleviate the shortage of pledged coins, and ensure the continuity of mining. However, there are still many CRU holders who do not know how to participate in staking. We provide a link below on how to staking CRU to obtain higher returns. This information is very important for holders. It is recommended that you read or bookmark this article carefully. If more currency holders become guarantors to provide pledges, then miners will find more CRU in the state of Token shortage.


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