At the recent annual customer appreciation meeting, China-based ASIC miner manufacturer Bitmain CEO Jihan Wu announced a new plan to lower the barrier of entry into the crypto mining sector. Per reports from news site 8BTC, the firm will launch three new strategies consisting of installment payment, option hedging, and joint mining to help customers begin mining BTC in advance of the halving set to take place next summer.
According to the report, the installment payment model launched allows a minimum down payment of 50% provided more than 100 cryptocurrency miners are purchased. If an order exceeds 5,000 cryptocurrency miners, the buyer needs only pay 20% down with the remaining balance due seven days before delivery. The installment payment option allows buyers to lock-in orders and delivery dates while they wait on additional capital to flow into their business. Hardware inventory often sales out quickly with delivery dates, typically 1-2 months in the future.
Wu also intends to teach crypto miners how to hedge risks. To prevent a drop in prices, Bitmain will purchase options products from Matrixport, a Singaporean-company launched by Jihan Wu, to help customers mitigate the risk of price dumping. 1% of the total amount from hardware orders, over 10 million Chinese yuan, can go towards options. The options feature is called “Bitcoin 2020 / 3 / 27 35000 CNY Put Option”.
To summarize, a holder of one of the options can sell one BTC for 35,000 Chinese yuan on the March 27, 2020 exercise date. The benefit of the Put Option is that the more the price drops, the larger the holder’s profit margin will be. If prices fall to 20000 Chinese yuan, the holder will gain 15000 yuan when they exercise the options. But if the price exceeds 35,000 Chinese yuan, the Put Option is canceled. Bitmain intends to help customers overcome the psychological threshold they face when investing in new ASIC miners.
Finally, Wu announced an initiative to convert existing mining farms into Bitmain’s franchisees. Bitmain’s new ”one-year joint mining mode” provides S17 series mining machines and pays the annual electricity charge (0.35 Chinese yuan/kW·h). The partners provide the hosting center, maintenance personnel, and other infrastructure. The revenue settlement occurs every month, with 25% distributed to the partners and 75% for Bitmain. If the income cannot offset the electricity charge, no distribution will occur. Bitmain’s plan saves on the cost of self-built mining farms while quickly deploys miners into production.
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