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Bitmain, the largest mining hardware company, made around $4B last year
- oldcynic 9y agoMaking and selling shovels seems to be still the best way to go then.
- zitterbewegung 9y agoIn a war the group that profits the most is arms dealers.
- chii 9y agoIn a situation where there's a demand for a certain type of goods, those who create those goods are going to profit. Comparing crypto mining to a war is unnecessarily evokative and manipulative.
- goldenkey 9y agoNot when most of it is a cheap trick to rob you of your money and life...exactly like pointless wars
- sosuke 9y agoI remember reading somewhere they also use the shovel for a while before sending it off.
- reificator 9y agoIf triple dipping is the norm for ISPs, why not let hardware manufacturers double dip?
- function_seven 9y agoTriple dipping? Is that 1. End user, 2. Content provider (e.g. “fast lanes” for Netflix), and 3. Government subsidies?
- burkemw3 9y agoAnother possibility is selling data, primarily to advertisers
- lawn 9y agoYes, see AntPool with ~15% of the current hashrate. https://coin.dance/blocks https://coin.dance/blocks
- dfox 9y agoI would assume that significant fraction of bitmain's customer mine on antpool, as that is what the devices are preconfigured for.
- dawnerd 9y agoI mean they need to make sure they work first right ;)
- adventured 9y agoNot if you're very high on the food chain. It inverts there. It's better to be Aramco, Exxon or Shell than Baker Hughes or Schlumberger. Much less a lowely oil equipment maker (the shovel makers). It's better to be the railroad (BNSF, etc) than the car maker (eg Greenbrier), or really any other rail equipment maker. Better to be the largest natural gas companies, than the fracking sand provider (eg U.S. Silica), or the natural gas equipment makers. It's better to be Glencore, BHP Biliton or Rio Tinto than the company that makes the mining equipment. It's better to be DeBeers than a diamond jewelry equipment maker. It's better to be Pfizer or Merck than a company making various equipment for big pharma. It's better to be Intel than Applied Materials. It's better to be Apple or Samsung than Foxconn or most any component maker. It's better to be BMW, Toyota or Telsa than a parts supplier.
- garyrichardson 9y agoAre these things true or equivalent? These areas are not necessarily booming. They are stable with few consumers of the goods. At this point, every scheming hustler is in the market for a bit coin miner. Same in a gold rush -- any fool can dig with a shovel. It's not until boredom or consolidation happens that the shovel maker margins start getting thinner.
- wffurr 9y agoBetter is to think of it as making something a lot of people want. Lots of miners = lots of people who want shovels/ASICs. Whereas mature industries like those end up as monopsonies i.e. a single buyer with lots of suppliers.
- narrator 9y agoIn most of those cases the guys higher up the food chain have appreciating assets such as land, consumer brand value, mining rights, developed oil fields and mines, etc. The guys lower down the food chain make depreciating assets and have to get up every morning and make new stuff to sell every day or they go out of business.
- twic 9y ago
- IncRnd 9y agoIn this case, the shovel seller is believed to use the shovels a bit before selling them. In that way, they extract all the value from the shovels themselves, before a purchaser ever digs.
- KitDuncan 9y agoMhm I wonder why non-mining altcoins are getting the most fud...
- jacquesm 9y ago> made around $4B last year They're clever enough that they price it in USD and not in Bitcoin.
- deyan 9y agoNo sources cited. Random comments re: Nvidia and altcoins. Very poor article, if we can call it that. May I suggest this one instead https://www.cnbc.com/2018/02/23/secretive-chinese-bitcoin-mining-company-may-have-made-as-much-money-as-nvidia-last-year.html https://www.cnbc.com/2018/02/23/secretive-chinese-bitcoin-mi...
- kenneth 9y agoAs an engineer, it saddens me to see the huge inefficiencies inherent to cryptocurrency mining these days. Surely, when we're spending in the billions on wasteful hashing, we could dedicate a small fraction of that to engineering better consensus algorithms. Unfortunately, we have an ecosystem where everyone is incentivized to ignore the problem because they're too invested in maintaining the price of Bitcoin and other PoW cryptocurrencies. They often don't pay for the externalities — environmental costs. The specialization of mining also severely hurts the distributed and decentralized nature of these crypto-currencies. I'm a huge fan of crypto-networks, and have made a career in the space. But, I want Bitcoin to die off and leave room for newer generation technology.
- testdeep 9y agoThen shill your friends about Nano. Free Instant Transfers. No mining.
- sradu 9y agoWhich projects would you consider as a potential replacement for Bitcoin?
- vernon99 9y agoThis is a one-sided comment. There’s a lot of research going into different variations of proof-of-stake. 4 out of 10 largest crypto (by market cap) are PoS. There’s a lot of work Ethereum community (Casper), Cardano folks, Tendermint etc are doing to create better consensus models.
- bitL 9y agoPoS is not going to be very popular as it removes the literal "money out of thin air" that was happening with GPUs in the past few years (coming to end in medium term). PoS strongly favors already well capitalized owners, instead of allowing new ones.
- twiceaday 9y agoDoesn't PoS generate money out of thin air? It's just a matter of putting your dollars into stake vs hardware and electricity.
- deleted 9y ago[deleted]
- jimjimjim 9y agoWell, those oceans aren't going to boil themselves.
- sadgit 9y agoConspiracy of the second law
- tlrobinson 9y agoIs that $4B worth of USD/CNY, or BTC? If it’s BTC then a) the real figure is much lower because they can’t sell $4B of BTC without drastically moving the market, b) what portion of that is due to their BTC holdings increasing in value by more than 1000% in the past year? Either way it’s still a lot of money, though.
- makomk 9y agoA bunch of that is probably going to be in BCH, since they were requiring that for mining hardware purchases for a while, and that's an even shallower market.
- wyldfire 9y agoIt doesn't matter much what the denomination is. Most sane businesses would convert to the currency of whatever their expenses are anchored in. a) I think you're mistaken. $4B per annum is unlikely to move the markets much.
- IncRnd 9y ago> I think you're mistaken. $4B per annum is unlikely to move the markets much. It sure will if you try to sell it. Holding it certainly isn't the issue.
- wyldfire 9y agoThe daily volume at the beginning of 2017 was $200M USD. The daily volume at the end was $8T USD. $4B over 365 market days is somewhere between 1-4% of the daily market. If liquidating their bitcoin tanked the market in 2017, it wasn't too noticable.
- tlrobinson 9y agoI don’t think you can extrapolate liquidity from volume, especially when there are exchanges with very low or zero fees.
- 9y ago
- ebbv 9y agoThe people who did the best in the gold rush were the ones who sold supplies...
- gigatexal 9y agoI've moved to coins that are asic-tough
- knowaveragejoe 9y agoWhat're some examples of these?
- nickthemagicman 9y agoMonero if I'm not mistaken.
- milcron 9y agoLyra2re2-based coins such as Vertcoin and Monacoin.
- KitDuncan 9y agoCool so now miners are buying commodity hardware in bulk instead and I can't build a proper workstation because GPU prices are through the roof. Mining in general can't be the solution to consensus issue. It's just horrible for the environment.
- DaiPlusPlus 9y ago“ASIC-resistance” just means “needs lots of RAM”. Eventually someone will figure out how to make oodles of RAM sufficient for a many-core custom processor. Heck, modern SSDs (e.g. Intel Optane) might be fast enough to replace DRAM for these kinds of applications. Another kind of ASIC-resistance might be using dynamically-generated algorithms employing self-modifying code. You’d have to own a Xeon Phi to get good figures for that, methinks. It’s a shame PoW is based on arbitrary hashing instead of, say, “Proof-of-Folding@Home” - that would do some good at least, methinks.
- IncRnd 9y ago> Eventually someone will figure out how to make oodles of RAM sufficient for a many-core custom processor. It's already been figured out. The issue is that ASIC manufacturers don't see the need to switch from BTC, when they are already making money. Hint, it's the type of ram.
- syassami 9y agoNo sources?
- gesman 9y agoSelling showels to gold diggers is the best business model during the gold rush
- downrightmike 9y agoThey also have about 28%+ of the whole network https://qz.com/1053799/chinas-bitmain-dominates-bitcoin-mining-now-it-wants-to-cash-in-on-artificial-intelligence/ https://qz.com/1053799/chinas-bitmain-dominates-bitcoin-mini...
- pain_perdu 9y agoWhy not create a coin awarded for proof of AI-modeling and open-up the network to researchers? Seems like it would be a lot more productive if all that processing power went to neural networks.
- e1ghtSpace 9y agoIts called motocoin and it has kinda failed. https://bitcointalk.org/index.php?topic=1365986.0 https://bitcointalk.org/index.php?topic=1365986.0 One person made a very good bot and took over and no one has made a better one.
- wcr3 9y ago(+/- around $4B)
- UncleEntity 9y ago> The increased demand for special hardware like GPU’s and ASIC based systems has created a black market where hoarders buy the hardware in the market and sell for exorbitant prices on websites like E-Bay. Since when is ebay considered the black market? I always thought "buy low, sell high" was the ebay motto...
- Gatsky 9y agoBitcoin mining is a real world version of Keynes' quote about labour productivity[1]. The important difference is that the money doesn't belong to any country, and is transformed purely into personal wealth. This will lead to wealth inequality the likes of which we have never seen. Governments should charge miners a lot more for just existing, and using all the infrastructure the public has funded to spin money out of thin air which will never help pay for that infrastructure or contribute to any of the economic activity which keeps a country going. Why we let people dealing in financial instruments acquire so much wealth and power continues to baffle me. [1]https://en.m.wikiquote.org/wiki/Talk:John_Maynard_Keynes#%22The_government_should_pay_people_to_dig_holes_in_the_ground_and_then_fill_them_up.%22 https://en.m.wikiquote.org/wiki/Talk:John_Maynard_Keynes#%22...
- DINKDINK 9y ago"using all the infrastructure the public has funded to spin money out of thin air" In what jurisdiction[1] is electric-grid transmission and distribution publicly funded? You're charged for the cost of your electric service. [1] other than maybe communist or socialist governments
- downrightmike 9y agoThis is also a good argument for the wealthy to pay their taxes. The roads people use to get to the store cost real money. But that doesn't really happen either.
- alexnewman 9y agoThis can simply be explained with the fact that there's no competition.
- forgingahead 9y agoWhat is the source for this claim of profits? I couldn't see any in the article?
- Cw67NTN8F 9y agoLet's just sit back and think... $4,000,000,000 in 4 years. or $50,000 for 80,000 families. On the other hand, how come they are making 65% net margins? Where's the competition?