From Mining Machines to Blockchain Applications — The Industry Shift in Cryptocurrency as Seen by Song Zhuorong

“The mining revenue in just one month is equivalent to a full year’s salary.” This is a profound reflection on Bitcoin mining from Song Zhuorong, CEO of Seychelles Business Consensus Innovation Ltd. From an IC design engineer at Realtek Semiconductor, to a product manager at Sitronix Electronics, and then founding Taiwan’s first Litecoin mining machine company AlcheMiner, Song Zhuorong has witnessed the entire cycle of the virtual currency mining market from infancy to maturity through his entrepreneurial journey. Now, he is shifting his focus to blockchain application development, aiming to explore the potential of this technology in real-world industries.

IC Design Background Meets Bitcoin Opportunity—The Startup Story Starting from Mining Machines

Song Zhuorong’s entry into the virtual currency field was not a deliberate plan but arose from a chance project opportunity. While working at an IC design company, the firm received an order for Bitcoin chips, with the client planning to produce mining machines. This project prompted Song Zhuorong to systematically study Bitcoin, and he even purchased some for experimentation.

After the project ended, he received a mining machine as compensation. This decision changed his life trajectory. He conducted a one-month mining experiment with this machine, and the earnings were astonishing—the profit was 200 times the electricity cost, far exceeding a year’s salary. Such a return on investment ignited his entrepreneurial drive.

Based on his IC design background, Song Zhuorong believed developing mining machines was not difficult for him. However, when he decided to run his own business, he found that the Bitcoin mining machine market was already oversaturated with many competitors. Therefore, he shifted to developing Litecoin mining machines, which led to the founding of AlcheMiner, Taiwan’s first professional Litecoin mining hardware manufacturer.

The Economics of the ASIC Mining Era—Power Costs Determine Profitability

The business model of the mining machine industry has undergone significant changes in recent years. Early miners could use personal computers for mining, but now Bitcoin and Litecoin rely entirely on specially designed ASIC (Application-Specific Integrated Circuit) mining machines. These highly specialized hardware devices greatly improve mining efficiency but also raise the entry barrier.

In contrast, Ethereum (ETH) has a somewhat different situation. Although Ethereum’s mining algorithm requires substantial memory, designing dedicated ASIC miners for it does not significantly improve performance, making cost-effectiveness poor. As a result, miners often use consumer-grade graphics cards for Ethereum mining, which lowers the entry barrier.

However, regardless of the mining equipment used, there is only one key factor for profitability—electricity costs. Song Zhuorong points out that if local electricity prices lack a competitive advantage (less than NT$2 per kWh compared to China or Iceland), mining is generally unprofitable. In regions with high electricity costs, mining revenue depends entirely on the fluctuation of cryptocurrency prices, turning mining into a gamble rather than a stable business model.

Industry Insider Secrets—Mining Machine Manufacturers’ Tactics and Selection Criteria

It is an open secret within the industry that some mining machine manufacturers employ gray-area operational strategies. They produce mining machines under the guise of “testing,” but in reality, they mine with their own equipment. Some even claim that delayed shipments are not due to supply chain issues but because the manufacturers are secretly mining. Only when mining difficulty increases and profit margins are squeezed do these machines hit the market. Ironically, the development costs of mining machines are often borne by customers. Such dishonest practices serve as a warning to potential investors: choosing a reputable mining machine manufacturer is crucial.

For investors interested in mining, Song Zhuorong recommends first confirming whether the cryptocurrency they wish to mine has a mature mining machine ecosystem. Currently, only Bitcoin, Litecoin, and Dash have available ASIC miners. Other cryptocurrencies can be mined directly with consumer-grade graphics cards.

Investors can use mining calculator tools by inputting parameters such as electricity costs, graphics card models, currency prices, and mining difficulty to quickly assess whether the investment can break even within a reasonable timeframe. These tools provide a relatively objective basis for decision-making.

From Mining Machines to Blockchain Applications—Reflections Behind the Shift in Technology

Song Zhuorong’s career did not stop at manufacturing mining hardware. With a deeper understanding of the virtual currency industry, he began to focus on the application potential of blockchain technology. This shift was triggered by a painful personal experience—he was hacked and over 100 Bitcoins were stolen, resulting in a loss of more than NT$3 million. This security incident made him wary of exchange platforms and prompted him to explore the application value of blockchain technology in other fields.

Guided by this idea, Song Zhuorong collaborated with the Industrial Technology Research Institute to develop the DuduKe platform. This platform is a crowdfunding application scenario, which currently only utilizes the most basic blockchain function—proof of data existence—due to current limitations. However, Song Zhuorong believes this is just the beginning; future innovative financing methods, including ICOs (Initial Coin Offerings), hold great potential.

Currently, Seychelles Business Consensus Technology is developing multiple blockchain applications. One direction is integrating blockchain technology into the music industry to explore new copyright protection and revenue distribution mechanisms. On the other hand, the company is developing digital currency-related services, including a decentralized trading platform based on Ethereum smart contracts, where users can trade Ether and ERC20 tokens. The common goal of these applications is to push the boundaries of blockchain technology and transform it into practical business tools.

The Evolution of Taiwan’s Blockchain Startup Environment—From Misunderstood to Gradually Recognized

Song Zhuorong deeply feels the evolution of Taiwan’s blockchain startup environment. When he first engaged in mining chips and mining machine development, the market generally misunderstood virtual currencies. Many regarded this field as a scam, and even family members advised him “not to engage in unproductive work.” This societal perception was a heavy obstacle for entrepreneurs.

However, over the past few years, the environment has subtly changed. Bitcoin has gradually entered mainstream financial markets, and virtual currencies are no longer fringe topics. Yet, from a blockchain technology perspective, widespread real-world application still faces enormous challenges. It requires deep integration with software developers and various industries to unlock the true potential of blockchain.

From another perspective, this is an opportunity. Because blockchain applications are still in their early stages, there is ample room for innovation. Song Zhuorong is full of expectations for the future of this field and believes Taiwan still has a chance to find its place in this wave.