Equipment prices have dropped 73 times, people in the business of digging money have been struggling

Ever dreamed of changing life fast with "digging" virtual currency, now many Chinese young people are facing severe consequences after the virtual currency bubble burst.

Cryptocurrency industry collapses and goes bankrupt in 2020?
Money 'virtual' soared, investors are not enough to offset losses?
Was Bitcoin really 'revived'?

Lu Qing, a 24-year-old young man, made a lot of money with a virtual currency mining service in Delingha City, Tibet. But recently he returned home to Jiangxi province due to business failure. In the context of the Bitcoin price falling nearly 80% from its peak, investors are fleeing from cryptocurrencies. In countries where cryptocurrencies are banned from trading in China, the consequences of falling cryptocurrencies are still huge, especially for young people who dream of getting rich quick.

A staging machine virtual currency in China. Photo: Custom News

There is still interest when the price of virtual currencies starts to fall

Cryptocurrencies make money by hiring computer capabilities to authenticate transactions. Mr. Lu runs a cryptocurrency mining company in an industrial park in Qinghai Province to take advantage of the cheap electricity provided by state-owned companies. In mid-2018, Lu's mining facility had 7,000 miners. Standing off the premises, one can hear the loud sound of the cooler. Lu keeps a stake in the facility, installs miners with personal money, and operates cryptocurrency mining equipment for others.

As the price of virtual currencies began to decline, Lu's base was profitable, thanks to the low electricity prices in Qinghai - a province with abundant wind and solar energy.

"My dream is to increase the number of cryptocurrency miners to 12,000 and one day I will become an investor of the size of George Soros," Lu once said.

But Lu's company collapsed when the price of Bitcoin plunged from a peak of nearly $ 20,000 to below $ 4,000. Many customers canceled the contract, so Lu had to sell the excavators.

The price of cryptocurrency mining machines is reduced by more than 70 times

Huaqiangbei District is located in Shenzhen City, Guangdong Province, which is famous for electronics trading. In commercial buildings in this district, merchants sell countless old virtual currency miners. Some phones cost less than 400 yuan ($ 59), down more than 73 times from nearly 30,000 yuan ($ 4,425) in 2017.

The miners are the object of which investors pour money to make a profit. Most of their money goes to buying electricity (to run excavators). But when the miners are no longer profitable, investors will abandon them. Therefore, the price of excavators plummeted with the speed of escape of investors.

Some Bitmain virtual currency mining machines.

By the end of 2018, Shixing Mao, owner of F2pool - the world's third largest Bitcoin mining facility, admitted that about 600,000 of his miners had to be shut down for two weeks due to the virtual currency price crisis. Mao also revealed that the majority did not make a profit because Bitcoin price constantly bottomed out.

Bitmain, the world's largest cryptocurrency mining company, is also reeling from the sudden volatility of the market. Last year, the company wanted to list on the Hong Kong Stock Exchange, but so far its requirements have not been approved. Wu Jihan, the co-founder of the company, may face his first failure.
A venture capital firm in Shanghai said that while China is looking for a breakthrough agreement in the trade war with the US, Beijing might save Bitmain thanks to the company's prospects in developing equipment. semiconductor.