Block 101 Live Broadcast with Valarhash and Binance
On August 18, 2020, Binance’s new media marketing manager, Sisi spoke with Valarhash CEO, Fiona Lv. In the live broadcast, Fiona talked about her experience of global travel and gave insight to her vision and direction of the mining industry in the next few years. According to Fiona, mining is a natural financial phenomenon, and it is consistent with the concept of traditional finance and other currencies.
Fiona believes that the current mining industry has made great progress compared to a few years ago. In her point of view, Bitcoin is a big social experiment. There is a risk of failure at any time in the early stage, but with the recognition that Bitcoin has gained, the number of people has gradually increased and a consensus has gradually been achieved. Now that mining has passed the growth stage and has come to the maturation, it is now a more suitable time for long-term investment, because of the increase of users in the current market.
Here is a recap of the live broadcast event.
Part 1: Introductions
Binance Host: Let’s ask Ms. Lv to first introduce herself.
Fiona Lv: I am Fiona Lv, the CEO of Valarhash. This is the first live broadcast of my life.
Binance Host: Then, I am so honored to have you here.
Fiona Lv: So, I’m not used to having such an event, I feel like talking to air.
Our team first entered the mining industry in 2013 and entered Sichuan, China, to build a mining farm in 2016. Later, our team also took part in mining machine distribution. In 2017 and 2018, 70% of the country’s mining machine distribution should be done by us. Then in 2019, we released a mining pool. With more computing power on hand, Valarhash also incubated a computing power platform that integrates mining machine sales and computing power trading. In fact, there are not many retail customers coming in this year. Basically, large institutions, funds cooperate with us more, with the addition of some overseas customers.
Part 2: From Globe-trotter to Bitcoin miner
Binance Host: Some netizens also asked about the flooding in Sichuan, which also affects mining farms. Some people are saying that the mining machines were flooded, is it true?
Fiona Lv: Sichuan has been raining heavily for the past two days. Our original mining pool has a hashrate of between 9,000 and 10,000 Phs, which is probably the fifth largest. Yesterday, because of the rain, the network was cut off in some places, and the electric field was unable to generate electricity in some places. We dropped more than 3,000 P directly. We may have dropped to 10th place last night, but it is better now. We had a collapse in another mining location, but there was no harm to the personnel and the machines were still functional.
Binance Host: That’s good, safety comes first. From your resume, I can see that you were a global traveler in the past, so I admire you. Is there anything interesting that you would like to share?
Fiona Lv: Before 2018, I would spend more than half of a year spending time on my own and playing outdoor activities, and I had been doing so for 10 years. I also have a customized travel team. I am also a diving instructor, so I was basically running around the world. Various opportunities later appeared for me in the mining industry, starting in June and July 2018, and it has been more than two years since. In fact, this year’s Covid-19 pandemic has had a great impact on my original industry partners. My diving instructor has not been in the water for more than half a year. The impact of the entire aviation industry on the world, especially the tourism industry, is really devastating. I think it may take at least two or three years to recover. For me, I will concentrate on mining in these two or three years.
Binance Host: Many people have always wanted to travel freely around the world, but a lot of them just think about it without taking any action. It is still very difficult for us. So, what did you do before you came into contact with the Bitcoin blockchain industry? Did you travel around the world?
Fiona Lv: Early on, I have started to dabble in international trade for the first time, and my trading company has always been there. Since I like to travel very much, I made a customized travel team. Later, I got the diving instructor because I liked diving, and I also organized many very special trips. Basically, I was on the road for the first ten years.
Binance Host：What a rich and wonderful experience. Are there any particularly interesting experiences in this process that you would like to share?
Fiona Lv: From 2013 to 2016, I would go on radio shows to share trips almost every month, and s talk about outdoor sports like diving on TV. At that time, I basically talked about Greece, the North and South Pole, and other various places I have visited. Each episode had a theme and a place to cover, which was very fun.
Binance Host: As the Chinese idiom says, reading thousands of books is not as good as traveling thousands of miles. I think it makes sense. My elder sister used to be the host of a travel channel, so I think it’s quite similar.
Fiona Lv：This experience has taught me a lot. Last year, our team continued to look for high-quality power resources all over the world, since I went to many destinations, and later discovered that the locations that I considered fun were not necessarily the most popular places to visit. Places with especially good energy supplies are usually located in remote areas.Later, I started researching the places I’ve been to in the past, and the organizations I’ve been in touch with, to see if there was cheap electricity. In reality, it’s a hit and a miss, but it’s very rewarding.
Binance Host: Why were you optimistic about breaking into the blockchain industry?
Fiona Lv: I had somewhat of an understanding about the industry in 2013, but not a very deep one. At the end of 2016, I was self-learning programming, and I found that all the students in the programming class were speculating coins. At that time, Ethereum and various ICO were very popular. I didn’t know much about it, but I followed the trend to understand it.
Throughout 2017, my main business was diving. At that time, my fellow programming classmates would give some tidbits of information, telling me which cryptocurrency was doing well. They didn’t know much about it themselves, but there were still many gains. In 2018, I still want to know what is behind the blockchain and what Ethereum is, so I went to learn about Ethereum smart contracts and how to write in solidity language. After learning about it, I became even more intrigued, and later I saw the significance of mining, and that’s when I started to get into mining Bitcoin.
Binance Host: That’s great. Having such a wealth of experience and insights in the first ten years of life has paved the way for the future. Ms. Lv, as a serial entrepreneur, what qualities do you think a person should have to become one?
Fiona Lv: I think having resilience is important. That is, many times your destination may be A, and you want to go to A, but often the result is B or C.
Each step counts. I still have a lot of previous experiences that end up helping me every now and again. I may not feel it has any effect in those moments, but all of these experiences will help inadvertently later. If you know that you ‘re invested in something and enjoy it, you can devote yourself to doing anything without asking for incentives, and you’ll naturally have unexpected benefits later.
Binance Host: Many of our speculators tuning in may be amateurs or full-time investors. Do you have any good suggestions for starting a business in the blockchain industry?
Fiona Lv: I was learning programming at the time I started my journey, and I developed my network in blockchain space, as well as coin trading, and the mining industry. No matter what, there is a lot of bad news in the market, but digital currency and blockchain will certainly play a major role in the future. It can at least improve an efficiency distribution model and pave a new way for organization.
Bitcoin is a huge experiment for me. At present, I still see the whole industry as still in its early stages, so there are many opportunities in it, depending on what everyone is good at and what they do. You may be a node inside and get a lot of information and you can become innovative.
Binance Host：Yes, I think you also said that there are people involved in all circles in mining, for example, those who mine for themselves, and those who use mining pools. What are the essential differences between the mining industry and cryptocurrency trading?
Fiona Lv: In truth, everyone in the three circles is really enthusiastic about cryptocurrencies. In my opinion, everyone is very restless. However, due to varying odds and coincidences, there could be a difference between different groups. In reality, it’s still slowly merging. More and more financialization may take place in the mining circle. Many of the major customers here are also focusing on maximization.
Among cryptocurrency traders, they also want to learn about mining, and whether their new mechanisms can also be used by people in the community. So, all the three circles are merging. There will be some differences in the division of labor, but, in essence, most of the people I meet are very curious and strong in learning.
Binance Host：Many people know Bitcoin and this industry is still growing, but some people may worry about being late in entering this industry because they do not know much about the space to start, and they end up being reluctant. I think we should reject this kind of thinking. Ms. Lv, you have experienced so much and you openly welcome new challenges, so you are much better than us.
Fiona Lv：This mentality could be due to the environment I was exposed to. In reality, there are going to be new innovations in various ways. It’s still really fascinating to learn about the field.
I was actually already aware of the blockchain space in 2013, but I wasn’t going deep. In 2017, I could only go really far, but my concentration wasn’t there, and I missed out on a lot. I only joined this industry later, and I now have a deep understanding of the people and issues surrounding me and the industry as a whole, so I would say that I’m going to have a fuller insight in the future.
Binance Host: What do you think is the difference between the mining industry now and the mining industry a few years ago?
Fiona Lv: The difference is still quite big. For me, Bitcoin is a big social experiment. It may fail at any time at the beginning. The earlier the risk, the greater the risk. As time goes by, more and more people are recognizing its potential, and after further consensus, the industry will become increasingly stable.
In fact, Bitcoin is currently recognized by traditional funds in mainstream society. In this year’s special situation, many bigwigs on Wall Street have entered the mining industry and are more or less likely to deploy digital assets.
In fact, mining now is less profitable than previous years, and it will take more than a year or two to return breakeven. It used to take one month and three months, but now the performance of mining in all aspects is much more stable than before. There were also more people who were really speculators in the past. You may say that it is very fast to turn over the money, which is similar to speculation. When it becomes more and more stable, mining will be able to yield long-term investments.
Binance Host: Why do you think there are these changes?
Fiona Lv: It is because the stage of Bitcoin development is different. In the early days, no one knew if this digital currency investment could be made a practical reality. Bitcoin would return to zero at any time in the first three years of its appearance, but now the possibility of returning to zero is very, very small, so the return is not the same.
Binance Host：Yes, I agree. Let’s talk about Valarhash’s business model. What are the differences and advantages between Valarhash and other competing products?
Fiona Lv: That’s right. In a sense, this is still a relatively niche industry. The market value of the entire Bitcoin or digital currency is actually very small among the world’s assets, and it is still in its infancy. Therefore, the mining industry itself within the space is also very small. In the early days, it was vital to build strong credibility. Everyone in the small circle would have to view you as reliable, and then you would need to build a mining farm and buy a mining machine. After many years of accumulation, you will have A credit endorsement of a brand within the circle.
Valarhash has been successful since we joined the industry so early. We’ve acquired more and more partners on the basis of encouraging customers to make money first, so we’ve also developed a strong reputation. Trust is gained bit by bit, and I think this is our greatest advantage.
Binance Host: Before we got online, some viewers asked me what the computing power contract is. Can you give you a brief answer?
Fiona Lv: For mining machines, it is actually not considered a commodity or a financial product. When we consider the reason why it can’t be traded like digital currency, the answer is that it is difficult to standardize it since it is not homogenous. The productivity of mining operations is different, even the energy bill is different, and different things are different, so it is very difficult to standardize and exchange.
Since Valarhash has a lot of mining machines with a lot of computing power, we are experimenting with this. We take one thousand mining machines or more as a product batch, and one of the mining machines corresponds to a computing power. contract. For ordinary people, maybe buying a machine still feels expensive, what we do is that we allow everyone to buy a share of the stock starting at 0.01, which may cost only a few hundred dollars, so that then they can participate in mining.
This is also analogous to a standardized commodity which provides everybody with access to computing power trading. The computing power can also be traded as a cryptocurrency and can be easily resold. This is also the concept that we want to propose: let global computing power circulate freely within the market!
Binance Host: Everyone feels that mining is pretty stable. In your opinion, what are some of the risks of mining?
Fiona Lv: It is indeed a very good way to obtain Bitcoin at a low price, but the premise is that its threshold is still quite high. If you want to get a cost-effective machine with good performance, you must have a good mining farm. With stable power, you will also need to be able to operate and maintain and have a general understanding of some technologies and machines in the mining circle.
Even after all these are understood, there will still be quite a few obstacles in it. For instance, there are many uncontrollable factors at the mining farm, such as the weather, there will sometimes be barriers due to policy reasons, as it was in the past. I feel that the current policy is more and more supportive of mining, so now we also have good cooperation with some local governments, which can reduce risks for our investors. This is why we have strong confidence in mining operations, and these are our advantages.
There are only a few machine suppliers that have the ability to get chips to produce very good machines, but for various reasons, the chips may be controlled by others, and only TSMC and Samsung are supplying them.
For example, in September last year, since Apple and Huawei’s mobile phone chips were supplied first, all the chips for the mining machines were postponed. We may order goods well in advance, such as goods ordered in May, but futures were for shipment in September. In the end, it was only issued in November, and we may have lost thousands of coins in just these two months. These are big risks due to uncontrollable factors.
As a result, the machines provided to everyone on our computing platform are basically run in our mining farm, and customers can directly generate profits after purchasing them. Since there is no time difference, all of these risks will be avoided.
Binance Host: For ordinary people like retail investors, can you tell us a way for these risks to be avoided in an effective and reasonable way?
Fiona Lv: Even if you buy the equipment yourself and visit the mining farm yourself, there can still be a variety of difficulties. As I stated earlier, because there are many uncontrollable factors in the mining farm and it is difficult to differentiate between different mining regulations, it is therefore necessary to find a reliable organization. As an organisation, we ‘re continuing to work with multiple parties. We ‘re not going to create a big mining farm in one location. Generally, we ‘re trying to diversify all over the country to reduce risks. In the meantime, our own risks are minimized and the risk of the consumer is inherently reduced as well.
Binance Host：Yes, I agree. There are many computing platforms on the market, and I have covered quite a few of them on many live broadcasts. What do you think is the most important thing to provide users?
Fiona Lv: The most important thing is to be a transparent and reliable organization, that is, having real machines and real rewards. Beginning in 2016 and 2017, various cloud computing power platforms have had a lot of challenges. Everyone even thinks that you are a liar, and platforms may be given some bad machines and machines that are about to be eliminated. Other factors that need to be considered are if the mining farm is out of power, if the price of the currency drops, or if the cryptocurrency cannot be mined. All these will affect the income.
The computing power platform incubated by Valarhash is called “1TMine Computing Power Contract Exchange”. To distinguish us from other cloud computing power platforms, I would say that we will not run away :), and another point is that our platform can offer a service that other cloud computing platforms cannot. I won’t go into details about this at the moment. Friends who are interested can go to the official website for more information.
In order to protect the interests of investors, we will try our best to select some of the most stable mining farms, and choose machines that are already on the market with better performance to protect the best interests of investors. If you are now using some very bad machines that will soon be obsolete, the risk is huge. Many novices may not know it and will use these platforms that provide such machines. There are also some machines and providers that have no computing power behind them, so if you collect everyone’s money to buy cryptocurrency without verifying these machines, the risk is huge. If you fall, you may not be able to financially recover from it. Unfortunately, many cloud computing platforms run like this.
The most important consideration is if there are mining farms and mining machines behind the computing power platform, and whether there is computing power support. For instance, at Valarhash, we have a mining pool with more than 9000 P in the mining pool which is basically our own computing power. This is actually not a fake assumption. Since every mining machine that is running will be linked to the mining pool, it is a transparent system that allows users to see whether there is real computing power being used.
Binance Host: I believe that you know your customers very well. What do you think is the most important thing for customers?
Fiona Lv: There are many types of customers. For institutional investors, this year, we will connect a lot of funds, including those that are large in scale and even listed companies or overseas. These funds are stable and they will be able to aid in providing machines at a relatively advantageous price in the market, including the custody price, which is equivalent to having access to mining machines and electricity at an affordable rate. The machines can run for a long time, and the rest depends on the overall market situation.
For retail investors, many people come into mining and believe that they can make a quick buck, just like in trading. In fact, there are two concepts. I think mining is more like a fixed-term investment for bitcoin. What are the benefits of it? If you trade cryptocurrencies, you can easily increase or double and sell on a whim, so it is a more volatile environment. For example, you could invest 10,000 USD entering the market in 2017, and you could exit with 20,000 USD.
However, when it comes to mining, since your mining machine is running in the mining farm, even if it rises, the assets of your mining machine will also increase in value. The coins produced will have a profit every day, so it is not as easy to give up and leave it all behind.
Binance Host: So what kind of plans does Valarhash have in the next few years? Can you tell us about it?
Fiona Lv: Our main business will continue to strengthen and we will continue to look for high-quality power resources. We will establish mines both domestically and internationally. Those in tune with us that have good power resources and connections and are interested in cooperating with Valarhash are welcome to contact us.
In addition, since the industry is ever-changing, our own team is also constantly developing, so the mining industry is gradually becoming more financially sophisticated. We are currently making efforts to do just that. We have standardized the internal processes and made mining quantifiable. The next step is to have exchanges that will also come to cooperate with us to further refine the financial process of mining. I think there is a lot of room for imagination in the future.
In fact, mining Bitcoin, Ethereum graphics cards or POC hard drives now require high standards for computer rooms. Our ability to undertake IDC computer rooms is getting stronger and stronger. Furthermore, the mines are all built by ourselves, and there will be coordination with government bodies to build a smart city, and then we will have some participation in some large-scale IDC computer room projects.
As for overseas cooperation, many countries have already set mining as a national strategic item, so we will also implement these projects, build mines and then may purchase mining machines and provide mining pool services to the international community.
Binance Host: If you have good power resources, please contact Ms. Lv. For my next question, what changes, differences and developments do you think there will be in the cryptocurrency mining industry in the future?
Fiona Lv: I believe a lot of our audience members are either newbies or experienced traders on Binance. The portfolio of long-time investors is full of Bitcoin and Ethereum. Mining is at the bottom of the food chain according to them, and mining Bitcoin is considered the classical definition of mining.
There will be many innovations in this industry, but it is a process of trial and error, which accumulates. For example, Bitcoin has developed for so long to prove that the blockchain technology behind it is operational. Ethereum, on the other hand, is bringing smart contracts to Bitcoin, and then in DeFi, which is very popular now, to be a decentralized exchange on Ethereum smart contracts, and to do some financial innovations. I think these are very popular now and there are many gaps, but they are also very meaningful. These explorations may be good experiments for those in traditional economics and finance.
Binance Host: I saw that everyone on the live stream said they liked Ms. Lv very much and they find you very grounded. What do you think of the phenomenon that mining is gradually being financialized?
Fiona Lv：Mining machine itself is not a commodity, it is a financial product in itself. Just think of it like this: If Bitcoin is a currency, and a mining machine is a money printing machine, then it is an entire industry itself, and the mining industry is a financial industry. The behavior of it is affected by the entire currency price and the difficulty of the entire network and the market. It is naturally integrated with finance. All traditional finance principles are applicable in the mining and cryptocurrency trading space.
Binance Host: Okay, some netizens left messages asking how do you mine, and how can you participate as an ordinary person.
Fiona Lv：The easiest way is to buy a 0.01 share of hashrate contract on our platform to experience mining. For people who know mining well, they can also purchase miners online. Bitcoin and Ethereum miners are available right now. In the early days, many people said that the gains from mining were growing by the hundreds, but because there were many uncertain factors at that time, the risks were huge, and so the rewards were large as well, which were all proportional.
Now this mainstream currency is very stable and slow, but the new currencies that have been launching lately are suddenly booming in price by 20 times, 30 times, and 90% when it goes online. It is also possible that the smart contract has not been reviewed. Let’s use legos as an analogy. I think many smart contracts are still without verification, but, in fact, there are many unstable factors. They are built like lego pieces, but this huge number of innovations is very good. You can position your investments well according to your own risk appetite.
Binance Host: Yes, as the old Chinese adage goes, “newborn calves are not afraid of tigers.” (“初生牛犊不怕虎”) Recently, many new investors have shown a disliking towards older investors, and various jokes are being made in the community.
Fiona Lv: Personally, I take the time to learn about liquid mining, DeFi, and decentralization. I also try to buy some non-mainstream crypto and then watch their developments, but I still hold the mainstream ones. I would advise against exchanging all your mainstream cryptocurrencies for altcoins or smaller coins right after a bull market, or else those who issued new coins will have usurped your bag of mainstream coins.
Binance Host: This is really a reminder to everyone. It seems that every time after a bull market, many people exchange all the mainstream currencies for altcoins, and feel that altcoins have risen even higher. What do you think of Warren Buffett investing in mining?
Fiona Lv: That day, my friend circle got the news that Warren Buffet is getting into mining, and people were wondering if they could sell him a mining machine. The first thing I did was check it out on Twitter for myself. I think it is still fake news, but I have learned about his outlook and values in investments. In fact, he used to be not optimistic about gold or Bitcoin, especially Bitcoin, the digital currency boss.
This is a matter of having a sound understanding, but some of his value investment concepts and thinking models are common in all circles. Then in Q2, a while ago, he bought a piece of gold and a gold mining company that is equivalent to investing in gold, so news about it spread on Twitter. Since he hasn’t invested in gold before, he felt that this was not practical, and that he has invested in the gold mine, he may have changed his mind about investing in gold.
So because of that, some people would start thinking, if you compare gold to Bitcoin, given that you have invested in gold mining, wouldn’t investing in Bitcoin mining be the next step? I very much hope that he will enter the mining industry and I am willing to sell mining machines to him. However, at this stage, based on my understanding, it is impossible for Buffett to invest in mining. Nonetheless, many mainstream Wall Street players like Paul Tudor Jones, and large institutions like Fidelity are getting involved in mining.
Binance Host: What do you think about Yams, which maxed out a few days ago?
Fiona Lv: I also researched how to become a new investor for this. Yes, there are many smart contracts. They have not been reviewed. Just like building Lego blocks, they may collapse during the building process, but they may also be able to build good things. The risk is still relatively high, but new everyone can try it out, or you can learn instead about some decentralized smart contracts and the future web 3.0.
Some of these new blockchains belong to the value exchange network. At present, the traditional value of the Internet is information exchange, and this value exchange will be the basis for information exchange in the future. These are what we are doing at present, such as what has happened with Yams. What they have done is decentralized mining, and they are exploring and innovating. Maybe there are many gaps and loopholes, and maybe there are many speculations about the project. In fact, they are all advancing the industry, so I still look at these projects with a positive mindset.
Binance Host: Recently, DeFi is also a very hot topic. I wonder if you’ve paid attention to it?
Fiona Lv: What I have just said are all DeFi projects.
Binance Host：Every episode, we get questions from the audience about DeFi, so everyone is interested in this topic. So what do you think about the future of DeFi?
Fiona Lv: There are still a lot of challenges, and there should be no real applications that can be completely implemented on a large scale. They are still at a very early stage. DeFi solves a transaction problem, such as how pledges can be decentralized in the blockchain. I do not have a high level of understanding about the technicalities of this, so I will just make comments and listen to others’ viewpoints.
I think these attempts are very good, but it is too early to give them an evaluation. With many side chains, shards, cross-chains, some collaborations in the background, oracles, I think these concepts are all very good, and a project can be launched at a fast pace. It is equivalent to doing a lot of tentative experiments, but it really depends on the time and whether it really has a good model.
There is one thing I have discovered. Recently, an increasing amount of Bitcoins have been exposed to DeFi, but in the form of WBTC or RENBTC. It also shows that while DeFi is getting popular, everyone still recognizes the mainstream currencies like Bitcoin, so everyone must be optimistic. Don’t exchange all of your mainstream coins into altcoins, or keep some of the coins in your hand for pledge loans.
Binance Host: That concludes our livestream for today, thank you, Ms. Lv, for being with us.
Fiona Lv: Thank you everyone for taking the time to listen to our chat this evening and taking the time to learn about Bitcoin and mining.
Binance: Thank you, Ms. Lv, our live broadcast tonight is over. Goodbye everyone.
This recap has been translated and edited in English. For the original transcript in Chinese, please click here.
About Valarhash
Valarhash is a provider of mining services based in Sichuan, China, including miner sales, hosting miners, mining pool service and mining farm building technical support. The company integrates frontier resources globally, including countries such as the United States, Canada, Russia, Sweden, Southeast Asia and other regions, to provide hardware R&D, digital asset transactions, hash power contract sharing and other fields, along with a data center interaction system based on network thinking. It aims to use blockchain technology to link the physical world and the digital world, and to become a leader in hash power.
Valarhash is committed to building an ecological platform, which fosters collaboration and innovation with all partners, and building the new age in digital technology for everyone.
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