KuPool's Zhu Fa: Where is the Next Page of the Industry as Profits Retreat?

Mining profits are shrinking, but does this mean that the value of POW is also disappearing in tandem?
At the MoneyFrontier 2026 New Infrastructure Smart Computing Summit, KuPool founder and CEO Zhu Fa provided a negative answer. He stated that Bitcoin still holds long-term value, and the current contraction in mining profits is a result of the industry's gradual maturation, not an indication that POW is losing its long-term value. The industry has entered a new stage of development, and the era of relying solely on computing power to obtain excess returns is coming to an end. Practitioners need to seek new avenues for development in the next phase.

1. POW Truly Addresses Fairness and Security
Zhu Fa first reviewed the essence of the POW mechanism. In his view, there has long been a misunderstanding in the market, where POW is crudely interpreted as "you reap what you sow."
He believes that the greatest significance of POW lies in bringing real-world resources such as chips, electricity, networks, venues, and operational capabilities into the competition of the digital world, making the control of blockchain networks not only dependent on how much digital assets one holds but also on who can continuously invest real-world resources to participate in network construction. This provides more participants with a pathway to entry.

In addition to fairness, POW is also the foundation of Bitcoin's security.
Since any attacker wishing to alter historical transactions must recalculate the entire blockchain's accumulated work over more than a decade and continuously catch up with the new blocks being added to the normal network, Bitcoin's security does not come from how many nodes or computing power one has at a given moment, but from the enormous costs incurred by continuous real-world investment.

Regarding the recent focus on quantum computing, he believes that if quantum computing truly breaks through modern cryptographic systems in the future, it will not only affect Bitcoin but also a large number of infrastructures such as banks, military, and communications. Bitcoin can also respond through cryptographic algorithm upgrades, so the concept of "quantum-resistant Bitcoin" should be viewed rationally.

2. The Industry is Shifting to the Infrastructure Stage
Although POW still has long-term value, the profitability of mining is undergoing profound changes. This is mainly influenced by three factors.
First, Bitcoin block rewards are continuously halving, and the current cycle's increase in Bitcoin prices has not fully covered the impact of the reduced rewards, leading to a continuous decline in the industry's distributable income.
Second, the structure of industry participants has changed. More and more listed companies, energy enterprises, and large capital are entering the mining sector. These institutions are more focused on energy assets, land resources, and capital market value, with significantly lower short-term profit expectations compared to traditional miners, allowing them to accept lower returns or even temporary losses.
Additionally, Zhu Fa pointed out that mining is gradually evolving into an infrastructure industry. A review of the development history of agriculture, electricity, and communications reveals that once an industry becomes a foundational infrastructure for social operation, its profit margins typically decline as capital continues to enter. Mining, too, will struggle to maintain the early excess returns in the long term.

3. Mining Pools are the Underlying Services for Offshore Payments and Value Storage
Zhu Fa noted that while blockchain can operate independently of centralized exchanges, it cannot operate without nodes, wallets, communication networks, and consensus systems. Exchanges are responsible for asset trading and circulation, while miners and mining pools participate in maintaining the operation of the underlying network. On the surface, mining pools provide access to computing power and profit settlement, but they also undertake functions such as task distribution, data transmission, terminal connection, and scheduling. If mining machines are likened to mobile phones, then the role of mining pools is to connect terminals and organize network communication operations. Bitcoin serves global offshore payments and offshore value storage, and mining pools are the underlying service providers of this value network.

As digital assets gradually move towards institutionalization, the focus of industry competition must shift from the scale of computing power to communication stability, security capabilities, global node operations, and institutional service levels. These capabilities can also extend to broader scenarios of communication, computing, and AI infrastructure and commercial service scenarios.

4. Why the Future of the Industry is in the Stars and the Sea
Regarding the future development direction of mining, Zhu Fa pointed out that if the industry hopes to truly enter the next stage, it cannot continue to limit its attention to issuing coins, financing, and trading, but should focus on new types of infrastructure that are more long-term and possess global public attributes.
This judgment is based on two facts.
First, current global commercial activities and technological innovations are highly reliant on communication networks, cloud computing, data centers, and application distribution platforms. In the context of increasing global geopolitical competition, if these infrastructures become overly concentrated in a few countries or enterprises, the stability of the entire system and business continuity will face greater challenges.
At the same time, neutral spaces with international public attributes, such as outer space, are gradually entering the horizon of human commercial activities. The accelerated development of industries such as satellite communications, the internet, data centers, content distribution, exploration, and manufacturing will also bring new demands for communication and computing.

This requires that future communication, computing, and application services not only need to have broader global coverage capabilities but also need to reduce dependence on a single organization.
Based on this, Zhu Fa believes that there is a need to form a new type of infrastructure with more neutral attributes in the future, reducing the impact of geopolitical factors through distributed governance, and providing more stable communication, computing, and data services for global cross-border commercial activities and the digital economy. In his view, this also opens up new development space for the POW industry, as the long-term accumulated capabilities in software development, communication security, global node operations, and resource scheduling can be applied to AI infrastructure, distributed computing, and the construction of new digital infrastructure, continuously releasing new value.