Interview With Leo, CEO of BitFuFu: Globalization, Compliance and Environmental Protection Will Promote Mining Reform
06 September 2021 - 12:51PM
NEWSBTC
Recently, the cloud mining platform BitFuFu has aroused the wide
concern of both the industry and users, which has made its way into
the top rank of the cloud mining industry in less than one year
after operation and won the strategic cooperation and investment
from Bitmain, the mining giant. Leo, CEO of BitFuFu, accepted the
exclusive interview by Newsbtc. Leo explained the relations between
BitFuFu and Bitmain and shared his views on the status quo of the
mining industry and his outlook for the future. The following is
the full text of the conversation: Q1: Would you please introduce
BitFuFu and your own experience before the start of our interview
today? Leo: BitFuFu is a cloud hashrate platform on the basis of
tens of thousands of real mining rigs. The platform breaks down and
allocates the computing power of mining rigs. After purchasing the
hashrate, users may monitor the operation of their own hashrate
from a third-party pool. What’s more, users may receive payments in
their wallets directly from the third-party pool to ensure the
compliance and safety of assets. BitFuFu and Bitmain established a
strategic partnership on February 22, 2021, in hopes of extending
our cooperation in various fields, such as mining rigs and farms.
BitFuFu also cooperated with AntPool, a platform affiliated with
Bitmain. Users may have access to both of the platforms with one
account only. BitFuFu has further strengthened its capacity in
capital and resources after introducing Bitmain’s strategic
investment on April 7. I studied computer science and technology at
my university. After graduation, I was employed by the head office
of China Construction Bank, where I was responsible for the design
and development of financial market products, and have accumulated
much experience in traditional financial products. I had worked in
such a traditional finance sector for more than ten years before I
entered the cryptomining industry. Later, I joined Beijing
Financial Assets Exchange and was responsible for data architecture
planning and drafting of data standards as part of the management,
enabling business development through data. In 2018, I joined
Bitmain, taking charge of the Internet product design, operation
management, as well as analysis of blockchain technology research
and application scenarios. I was quite keen on developing
blockchain industry technology, so I founded BitFuFu soon after I
left Bitmain. Q2: You had been engaging in traditional finance
before you came to Bitmain in 2018 when BTC was going through a
slump. What drove you to choose cryptomining as your new career?
Leo: Actually, I got interested in BTC and cryptomining as early as
2014. BTC was, at that time, just seen as a kind of asset by the
United States. After reading the news, I developed a strong
curiosity about the terms such as BTC, blockchain, consensus and
mining. After I studied them for some time, I recognized the great
potential of BTC and blockchain technology and began to buy BTC. I
bought dozens of BTC in the first purchase and later bought mining
rigs for mining operations. Mining was extremely easy at that time.
I insisted on studying the BTC and blockchain industry until I
joined Bitmain in 2018. A lot of things did happen in 2018: BTC
reversed to keep falling after reaching USD 20,000 at the end of
2017, governments tightened their control over them, and Google and
Twitter changed the advertising rules of cryptocurrency. I was not
too worried about the predicament BTC faced, because BTC already
showed incredible prospects, starting from scratch. RSK, Lightning
Network and SEC solicited opinions from the public for the first
time on the granting of ETF license to BTC. Technology is
constantly updating, and our communities are becoming more and more
tolerant. Therefore, I believed that BTC would usher in a new peak.
Q3: Why did you start BitFuFu afterward? Leo: The total output of
the BTC mining industry recorded USD 5.012 billion in 2020, but
ordinary people could hardly earn money from it. With the
escalation of the arms race among miners, even mining farms with
many rigs have to join the pool to dig BTC. Mining rigs are very
expensive. When Bitcoins exceeded USD 63,000, Antminer S19 was sold
for RMB 70,000 at the record high. Mining rigs are hot and noisy,
requiring monitoring 24 hours a day. When they are out of order,
they must be fixed immediately. The job was so difficult that
ordinary people could seldom tackle it. In addition, mining rigs
are major power consumers, so electricity tariffs have a great
impact on profits. Ordinary people have no access to the
preferential electricity price like large mining farms. I founded
BitFuFu to make mining easier so that ordinary people would have
the opportunity to join in. At present, cloud hashrate accounts for
about 10% of the total hashrate, and such proportion will be likely
to increase in the future. Even for the mining industry, we could
attract more potential users. Through the cloud hashrate with a
lower threshold, BitFuFu may also introduce more users to the
industry and made the pie of the industry development bigger. Q4:
You used to work at Bitmain, and BitFuFu became a strategic partner
of and gained strategic investment from Bitmain shortly after the
establishment. Do you agree that it was attributed to your work
experience at Bitmain? How will Bitmain’s support contribute to the
development of BitFuFu? Leo: In fact, all of the key members of
BitFuFu were from the start-up team of Bitmain and BitDeer, not
just me. Perhaps Bitmain treats us with special respect because of
our rich industry experience. BitFuFu and Bitmain have carried out
in-depth cooperation in mining rigs and farms, and BitFuFu has
benefited from the sufficient supply of mining rigs accordingly and
taken the lead in having completed the global expansion in the
industry. The hashrate of BTC plummeted this June and July. BitFuFu
began to expand its presence overseas as early as the beginning of
the year, booked the load of many overseas mining farms, and
extended the mining leasing business worldwide. Therefore, the
hashrate supply was hardly affected by relevant policies. The
company launched a new mining plan in August this year, becoming
the first cloud mining platform in the industry to supply the cloud
mining platform at the full hashrate, which is an unparalleled
achievement in this sector. Q5: Before BitFuFu was founded, Genesis
Mining, BitDeer and other famous companies have already been
subsisting for years in the cloud mining market. How could BitFuFu,
as a new player, handle this in face of intense competition? Leo:
At present, the total market value of cryptocurrency is nearly USD
2 trillion, equivalent to that of Saudi Aramco, less than that of
Apple, and even far less than that of the American stock market.
Although cryptocurrency has made tremendous headway, there is still
a long way to go. Some rivalries are a zero-sum game, while some
are a positive-sum game. We should take a long-term view, develop
the incremental market, promote the development of the industry
together and achieve win-win results. BitFuFu has learned a lot
from our counterparts and is confident to provide users with better
products. As I said earlier, the market is yet to develop to a
larger extent. We will surely win the market as long as we offer
reliable products. In terms of market share and the pool of users,
BitFuFu is already among the front runners of the cloud mining
industry. Q6: It is amazing that you have developed so fast in such
a short period of time. What made this happen? What, in your
opinion, are the advantages of BitFuFu? Leo: Cloud mining has
developed too rapidly to make this sector a chaos. Hashrate
products offered by many platforms actually have no mining rigs as
support, which is a practice of capital tricks. Therefore, many
platforms disappeared all of a sudden when their capital chain
fractured. BitFuFu developed so fast because, on one hand, the
strategic cooperation and investment with Bitmain gave us
fundamental support. We have a stable supply chain and sound
operation and maintenance capability. Our hashrate is based on real
mining rigs. Users may view their income from third-party pools, so
they trust us. We have abundant mining rigs and farms, including
the flagship mining rigs such as S19Pro and high-quality mining
farms, and extraordinary cost control, so the output of the mining
plan is stable and the mining output is high, which is highly
lauded by users. Q7: Would you market your mining products to the
users now? Leo: BitFuFu has launched cloud hashrate products for
ordinary users. Users do not necessarily buy an entire mining rig
in case of cloud hashrate, but purchase a mining plan with a
certain hashrate and cycle as needed. They may rent the mining rig
at a minimum capacity of 30T, and yield quick returns with low
one-off investment. The cloud hashrate cycle is short, and users
may exit flexibly after the mining plan is closed. In addition to
the conventional hashrate available on the market, we also offer
the mining plan of accelerated payback. Users are entitled to the
lower hashrate lease rate at the moment of purchase, so as to
shorten the return time. The platform will not charge users until
they get back their input. This mode can shorten the return time
and reduce the risk, which is suitable for risk aversion users.
Moreover, for more professional users, BitFuFu launched cloud
hosting, in which users are provided with one-stop services from
group purchase of mining rigs, trusteeship to operation and
maintenance, so as to serve the global layout as well as operation
and maintenance of small and medium-sized miners. Take the new
S19i, one of the earliest products, as an example. The service life
of the mining rig is about 5 years, but the return period is only
200 plus days. In the long run, the rate of return is even higher
than the cloud hashrate. Furthermore, users of cloud hosting have
the ownership of the mining rig, which can be either capitalized
when it appreciates, or produce mining income for users during the
ownership. Q8: How is the mining industry going on after the career
migration fever in June? Leo: The United States, Canada, Kazakhstan
and Russia are becoming new destinations for mining farms. The
United States and Canada have already promulgated relevant laws,
with rich power resources. Kazakhstan boasts cheap energy, a
moderate climate and a positive policy environment towards
cryptocurrency. Russia also has abundant reserves of energy.
Besides, Europe has high capital liquidity. The European Central
Bank (ECB) keeps the benchmark interest rate and scale of asset
purchase unchanged and has emphasized that it would not tighten
monetary policy too early. The ECB set the medium-term inflation
goal at 2%, which is good news for the cryptomining and
cryptocurrency. The hashrate of the whole BTC network is also
recovering rapidly. According to the data from BTC.COM on August
27, it is predicted that the difficulty will increase by 1.67% in
the next upgrade. Q9: What is the prospect of the mining industry
in the future? Leo: China’s hashrate used to account for more than
50% of the total, but such a high percentage is unlikely to appear
anymore. The mining industry will be further globalized. Moreover,
with the enactment of laws and regulations in countries like the
United States, mining will also enter the era of compliance. Of
course, compliance means taxation, which will increase mining
costs. Countries impose environmental requirements upon the mining
industry, and it will also urge the industry to transform to green
energy. The requirements for globalization, compliance and
environmental protection will further raise the bar against the
mining industry, and smaller platforms will be phased out. As a
result, resources and users will flow towards competitive cloud
mining platforms. Q10: What are your development plans for BitFuFu
in the coming years? Leo: BitFuFu will continue to deploy overseas
mining farms, and present mining rigs of more currencies in more
languages, for the choice of users in more regions. Our APP is
going to make its debut soon, with which users may operate on the
mobile. After that, BitFuFu and Bitmain will work together to
release, sell and supply the new generation of products. Website:
https://www.bitfufu.com/ Official group: https://t.me/bitfufu
Twitter:https://twitter.com/BitFuFu1 contact@bitfufu.com
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