On July 30, RRMine Global CEO Steve Tsou was invited to attend Binance Block 101 and had a live dialogue with Binance Sisi on July 30th, 2020. In the live broadcast, Steve shared his views on IPFS as a mining practitioner and expected the layout of the mining industry in the future. The following content is sorted out according to the live content and has cut out something for easier understanding. For detailed content, please click the playback link.
Sisi：How do you understand mining and the so-called mining industry? What are the essential differences between them and crypto currency？
Steve Tsou：The difference between mining and cryptocurrency should be divided into two parts. As for bitcoin mining, whether you choose cloud mining or real mining rigs, the essence is the same, a kind of futures investing, while mining allows us to obtain bitcoin at a lower cost.
But for Filecoin, mining is more complicated. You need not only hardware but also corresponding GPU and its resource matching, network bandwidth, stability and even the computer room. Our mining rigs are all placed in the IDC room with 24 hours of continuous electricity and network, which is required and guaranteed. So it is more like providing cloud computing services.
Compared with buying cryptocurrencies, mining can be seen as a secondary market in the crypto industry. In terms of cloud computing power, its units are smaller and more standardized. RRMine is positioned as a computing power asset management and trading platform, whose stability mechanism and matching mechanism can be used to smooth the risk curve so that more customer groups can join it.
Sisi：I would like to ask Mr Tsou, mining can bring benefits, but it also brings a lot of risks. How do you deal with potential risks?？
Steve Tsou：Any industry has risks, it is just a matter of big or small, so the point is how to deal with these risks. Product and strategy are needed and you must be sufficiently prepared in tactics, being able to predict the market and thinking out risk hedging methods to deal with what will happen.
Firstly, what we are doing is global deployment, which means that we need to improve a large-scale anti-risk capability. In this part, we need to have sufficient technical strength and global deployment capabilities. In order to adapt to the rule of Filecoin mainnet, we have also deployed many FIL mining rigs around the world, including China, Australia, the United States and Europe. This is for both its mainnet rules and economic model.
Secondly, the core technology of the mining pool can ensure the stability of the block generation rate, then the unit storage cost and output will also be stable.
Thirdly, our product can help users dilute the risk through the platform as much as possible. Taking cloud mining as an example, it is a product model of diluting risk. Your personal purchase of mining rigs is an investment and there will be risks as long as you invest. The essence of cloud computing power is a sharing economy when a group of people dilute the computing power to many shares. When the market changes and risk appears, we, as the platform party, have enough funds to upgrade. It means single risk will also be diluted by the platform. You can compare it to renting a large house at a low price, which means you enjoy the benefits without the investment risk of buying a house.
Finally, let’s go back to what I said before: any industry has risks. However, it is actually an asymmetric risk for mining. In other words, the downside risk is actually limited, but its upward space is unlimited. Corresponding to the characteristics of digital assets, it itself increases the effective rationing and has a scale effect. The epidemic brought an impact on the real economy, where the substitution function of digital assets is also effectively verified.
Sisi：What is the essential difference between IPFS and HTTP for you？
Steve Tsou：The essential difference is that the logic of storing data is different.
The explanation of the technology is very abstract, so let me give you an analogy. The traditional and centralized storage, HTTP, is to build a large warehouse. As the storage increases, both the entryway and warehouse need to be expanded continuously, then the information will become more and more complex and the expansion cost will continue to increase. The cost is actually very high if you have to expand to the side from the centre, so the expansion is not easy.
HTTP is location-based, it doesn't matter what the content is, so you can put whatever you want. As a result, it is getting messier and harder to find. There might be nothing a customer wants at all because the content is completely different from what you see on the Internet.
IPFS storage is categorized by content and it is distributed, which means you can build zillions of small warehouses. It is not necessary to put the warehouse in Beijing. You can have the warehouse in Shanghai, Chengdu, second, third, fourth or fifth-tier cities, or even in the mountains.
Sisi：What is the great significance of IPFS? What is its vision？
Steve Tsou：IPFS is oriented to a global point-to-point distributed storage file system, connecting file devices, so its vision is to create a faster, safer and more open network and its goal is to supplement, or even replace, the current network protocol, HTTP.
To understand the great significance of IPFS, the first thing is to understand the significance of Filecoin.
It realizes distributed storage and it has a natural landing direction, which is to upload and download safely in the decentralized network. File storage and retrieval are the most basic functions of upper-level complex functions such as data algorithms and digital economy.
Based on blockchain, any data access can be implemented according to the incentive protocol. At present, large file access based on distributed storage is the most basic function of the bottom layer. Many more applications are developed on IPFS, so it will challenge centralized cloud storage platforms like Alibaba cloud and AWS, which is also the greatness of IPFS.
Sisi：What impact does IPFS have on our life in the future？
Steve Tsou：First of all, we will no longer rely on centralized servers and the download speed will be faster. It is the network for everyone to help each other, which is similar to the sharing economy like Didi Taxi. IPFS is just more Internet.
Secondly, it will make storage cheaper. You can build countless small warehouses without a fixed location and redundant storage will be removed to avoid duplicate storage. Most of the time the data are stored without checking, therefore, the same thing may be stored as steve1, steve2, Steve3, etc.
It also has a version backtracking function so that you can easily view the historical version. The data will be permanently saved. In addition, you will see many APPs become DAPPs as more applications land on IPFS. IPFS can be used to support the content storage and distribution and then a new business logic can be realized by the smart contract.
For example, 5G is known to all, however, if there is no IPFS, 5G is not perfect because its combat effectiveness cannot be fully utilized. Just like that our transports are very good including planes and high-speed rails and the road outside the warehouse is wide enough to have 20 cars in parallel, but it will still take a long time to find things if the warehouse is messy.
So IPFS can make 5G more perfect to complete the last mile. They can complement each other.
Sisi：Speaking of Filecoin, what do you think are the similarities and differences between bitcoin mining and IPFS mining? What do you think of the Filecoin project？
Steve Tsou：The same thing is mining, but the difference is huge. Compared with bitcoin mining, Filecoin's mining mechanism is actually more complicated.
In order to maximize the efficiency, efficient hash calculation and coding capabilities are required in addition to powerful storage and hardware. It is impossible for a single machine to complete data adding, sealing, storage, message uploading and proofing. Just like that, a single person can not finish the whole process from the front desk and order service to cooking and serving dishes. As for Filecoin, a group is needed to solve this problem and each part has its specific function.
Filecoin is the only incentive of IPFS. In the Filecoin mining mechanism, different types of equipment focus on the tasks that one is good at and mainly using the mode of multi-cluster collaborative mining.
Cluster mining refers to the cluster configuration of hardware. Many servers coordinate with each other and optimize algorithms, completing tasks together with software and hardware closely connected. Unlike traditional bitcoin mining with individual miner which means all one have to care are the mining rigs, Filecoin mining is composed of worker and miner and needs to find a professional IDC room as the debugging and configuration of each rig is different.
Filecoin mining threshold is higher than Bitcoin mining and the mining pool is also very important in terms of its nature that you have to optimize. In addition, there is no Filecoin in the market currently, so its early mining is scarce. For ordinary investors, the best way to get involved in FIL is to buy cloud mining products of large-scale community combined with a high-quality clustered mining pool and this is the only opportunity to obtain low-cost FIL.
Sisi：In fact, Steve has made it very easy to understand. Filecoin is one of the most anticipated projects in 2020 and it is so hot that I have done many related live broadcasts. RRMine is also keeping up. Could you please introduce the layout consideration of RRMine when it launches the new IPFS product now?
Steve Tsou：RRMine has always been positioned as a decentralized computing power asset management and trading platform. We continue to pay attention to diversified computing power and any valuable computing power assets will be launched on our platform. Because what we are seeing is not just a market supported by bitcoin prices but the computing power market behind the entire digital economy.
IPFS is a web3.0 technology that is expected to replace the HTTP. Its decentralized ecosystem is also supplementing or even challenging the centralized cloud ecosystem, like AWS and Alibaba Cloud. Therefore, RRMine have to enter IPFS market, for which we started laying out a year ago.
Considering the timing of entry, we need to help users filter out uncertain risks, so we choose the window period of mainnet launching and start to offer IPFS storage products at this time.
Sisi：What is the positioning and advantages of the IPFS product of RRMine？
Steve Tsou：IPFS has a very strong Internet attribute. In fact, it is a web3.0 Internet product. Compared with Internet web2.0, it provides a low cost, safe, private and tamper-resistant innovation value. It also has the characteristics of the blockchain economy benefit distribution. Therefore, when RRMine entered IPFS market, it is first operated as an Internet project.
What is the nature of the Internet? It's the “cloud”, which is digital, virtual and intelligent. We optimize the allocation of resources, such as launching cloud mining plan or contract. We do not sell systems alone, nor do we sell mining rigs, but dilute the risky part in a shared way by “cloud” and provide a relatively small risky part to users so that their return on investment is high and the risk is low.
Athena Pool, RRMine’s partner, is the global leading provider of Filecoin cluster mining solution and distributed storage service. It cooperates with benchmark supply chains of Dell and H3C, which provide a lot of support with professional and top-level operation and maintenance service.
At present, we have started the construction of the second batch of mining farms in Australia, Europe and America. Therefore, our effective storage, block generation efficiency and storage capacity growth rate are leading the world at present. We are so optimistic about its bottom layer technology and we also recognize the prospects of FIL. In the future, we will continue to launch computing power trading, its data uploading and derivative service of Filecoin storage ecosystem.
Sisi：What do you think is the core competitiveness of a cloud computing power platform in terms of the layout of IPFS market?
Steve Tsou：As for IPFS mining, I think there are four core competitiveness: technology, scale, operation and maintenance capabilities, as well as ecological construction capabilities. We can see that in the long history of bitcoin, its mining rigs have gone through the historical process of GPU, CPU, FPGA and ASIC.
This process is accompanied by the continuous iteration of chip technology and the birth of mining giants like Bitmain. It is the same with IPFS, which is a technology-driven distributed storage project. The block generation efficiency and unit storage output depend on the software algorithm. The core technology needs to be continuously optimized and iterated.
Secondly, the ability of scalization. Our large-scale deployment will reduce the average cost and the procurement cost will be different. Low cost means higher profit margins and stronger competitiveness.
Thirdly, operation and maintenance capabilities. Unlike a single-machine cluster of Bitcoin mining farms, Filecoin requires more efficient hash computing power and coding ability, which can not be done with a single machine. The process of adding, proofing, packaging, sealing, proofing and uploading messages to the blockchain is disassembled one by one when miners use complex solution to optimize every step, from the hardware configuration to the algorithm. That is, to complete the mining process by multiple machines collaboration. This requires extremely high operation and maintenance capabilities, as well as the stability of the mining pool cluster.
Fourth, ecological construction capabilities. Filecoin emphasizes effective storage capacity, which determines miners’ probability and revenue. It is not a simple stacking machine but needs a lot of ecological applications to support so that the same investment can mine more FIL. The combination of the four aspects is the flywheel effect.
Larger companies, such as Amazon and Huawei, are all flywheels that are linked one by one. The flywheel effect is an opportunity for enterprises with ecological construction ability to further innovate in the blue ocean market from the competitive market. This kind of blue ocean market also gives ecological participants a long-term value investment opportunity, which is also a real dividend in the field of the digital economy. In our view, the innovative ecosystem characteristics of this digital economy are open source, open, compatible and win-win.
Sisi：Do you think mining is more centralized or decentralized than before?
Steve Tsou：Mining is indeed more centralized than before and it also verifies the platformization and capitalization viewpoints mentioned above, which is an inevitable trend. But this kind of centralization is after decentralization and I call it "weak centralization."
From the individual point of view, it is centralized, yes. A mining pool is a mining pool. But from the perspective of the entire network, it is still decentralized, with a lot of different mining pools and different mining farms. But it is a healthier and sounder decentralization. It can be defined as jointed individuals in the form of a tribal federation, which also reflects the characteristics of blockchain and is more in line with the development trend of real human society.
Sisi：Let’s talk about the future？
Steve Tsou：The essence of mining is computing power, which itself is a high-quality asset. It is also new energy in the world of the digital economy. In fact, we have been calling this computing power digital oil, which is the core productivity of innovation.
With the rapid development of a new generation of information technologies such as 5G, big data and cloud computing, the huge demand for computing power like AI computing power will further increase. This kind of new infrastructure collaborative new computing is also computing power. This kind of new infrastructure and new computing is also a revolution of computing power. As an infrastructure of computing power, we play the role of a digital economy engine.
In the future, there will be a trend of high-speed growth. In the vast blue ocean market, there are multi-dimensional competitions. Both companies and individuals can understand themselves and their own advantages, then play their own roles in an aspect of their capital, technology, supply chain, resource, market, etc. rather than cover all the aspects. Therefore, it is very important to find out their own role and positioning. Choose your own track to participate in the trend of this era.