Bitcoin halving countdown, how to capture PoW track Alpha at low cost

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The concept of halving is certain, ironclad, and must be the focus of major exchanges.

Written by: Liu Ye Jinghong

I need to stack up before reading. Some specific project names will appear in this article, but the intention is only to share ideas and not as investment advice.

According to current calculations, the next Bitcoin halving will arrive at the end of April 2024, but the specific time will fluctuate slightly depending on the difficulty of block production. After the halving, the Bitcoin block reward will be reduced from 6.25 to 3.125, and the income of miners will be directly cut in half. At the same time, halving is often accompanied by the iteration of new mining machines. In the face of reduced income and increased costs, Miners don't really have many choices.

First of all, the first option is to continue to expand production scale, purchase new mining machines, and increase the proportion of computing power to obtain higher block rewards. However, considering that the financial reports given by American mining farms are not ideal, the miners who choose this direction are almost only the leading mining companies.

The second option, as I mentioned in my last article, is that miners need to find new sources of income, so what is reflected is that miners practice their skills to promote the development of the Bitcoin Inscription ecosystem. In just three months, the proportion of fee income brought by Bitcoin Inscription has increased from 1% to 19.7% of total income. It is believed that after the block reward is halved, the proportion of fee income will increase to more than 50% . The new revenue sources brought by the Bitcoin Inscription ecosystem will also become another major income pillar for miners. For more details, please refer to my previous article, which can be viewed from the link at the end of the article.

The third option will be the choice of many long-tail small miners, which is to switch computing power to other PoW currencies. Bitcoin income has been significantly reduced, but there are still many other PoW projects that can be mined. As the pressure of competition for computing power increases, these long-tail miners can easily shift their goals to mine PoW projects that do not have much competitive pressure. This is the computing power overflow caused by the Bitcoin halving.

This article mainly talks about the idea of ​​finding the PoW track Alpha derived from the third selection method of miners. The ideas are personal subjective opinions, please readers to make their own decisions.

First of all, many people will immediately think of Bitcoin’s fork projects, including BSV, BCH, etc. I do not deny that these Bitcoin fork projects are likely to follow the trend of the market and rise together. However, according to the above logic, BSV and BCH will also be halved during this period. Depending on the time of their respective block production, the specific halving time will also be There is float. But they were all halved from 6.25 to 3.125.

The most important point is that the costs of BSV and BCH are not low and do not meet my definition of Alpha. I bought KAS on the PoW track in May 2023, and half a year later he was on Binance. After receiving a seven-fold increase in the price, I paid out my principal (no investment advice), and I plan to wait until the halving market arrives before making any plans.

Therefore, my definition of PoW track Alpha is that firstly, the circulation market value and valuation are very low, and secondly, personal computing equipment can still participate (regardless of whether the output can cover the cost). I believe readers can understand the first point, but the second point may be more difficult for readers without mining experience, so I will extend the explanation.

First of all, the general idea is that "there must be a market in the PoW track", and then we screen out the Alphas that are prone to increase in the PoW track. One of the inevitable conditions for a large increase is that there are sufficient participants. I believe everyone has experienced the important influence of the number of participants on the increase in ORDI and SATS.

Therefore, if a PoW project cannot be participated in with personal computing equipment, it means that participants need to purchase designated algorithm equipment such as so-called official mining machines. The result is that the participation threshold is greatly increased, resulting in insufficient popularity of the project and making it very difficult to get on the exchange. In the worst case scenario, this so-called PoW project may be completely fabricated to sell specific mining machines and turn into a complete scam.

The concept of halving is certain, ironclad, and must be the focus of major exchanges. Big-character posters and scrolling banners will be posted, and miner bosses will be invited to come out and create space. Therefore, it is very important to choose a PoW with low participation threshold, which is one of the important foundations for having traffic.

After knowing what types of PoW projects are considered Alpha, you need to start screening and searching. Because it is easy to have strong investment guidance here, I will only talk about the methods and ideas, not the specific screened projects.

1. Search public information channels. Including X, rootdata, mining pool information, etc. I'll show you two screenshots so you can understand.

Rootdata has a PoW topic tag. Read all the projects in it, and then read all related projects. Go to the public information pages of major mining pools to see the output information of specific PoW projects and the requirements for mining machines. For example, whether it is CPU mining, GPU mining, or dedicated ASIC mining machine mining. The screenshot below is from Yuchi.

The above two steps will allow you to screen out relatively mature PoW track projects that have already been listed. Of course, some readers will ask, what about the kind of Alpha that I want to be earlier and more Alpha, which is not listed on the exchange, and it is best to mine the coins by myself? No problem, keep reading.

2. Open bitcointalk, click on the Mining (Altcoins) section, and check the posts with [ANN] first. Bitcointalk is a sacred forum. Many overseas projects will choose to launch here, and the activity is also very high. The most famous person who has ever appeared here is Satoshi Nakamoto. However, because the projects here are too early, there is generally no GUI, and a certain computer foundation is required to use the command line for configuration. However, the advantage is that such new projects often do not require specific ASIC-specific mining machines, and ordinary home PCs or high-end PCs can participate. You can imagine a scenario in which you used your computer to mine 100 BTC in 2010 and keep it till now.

As a demonstration case, I randomly searched for a PoW project called LNCR. Generally speaking, ANN posts will provide the official website of the project, as well as various links. But please also keep in mind the laws of the dark forest. Many download links from unknown sources here are likely to contain malware. If you want to try it, please do not install it on a computer with assets.

Well, there is still half a year until the halving cycle. If you concentrate on research and screening, I believe you will be able to find Alpha.

Disclaimer: The content above is only the author's opinion which does not represent any position of Followin, and is not intended as, and shall not be understood or construed as, investment advice from Followin.
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