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> You're assuming miners are sellers. Actually, I’m not. If a Bitcoin is worth $60,000, then in an efficient market miners will spend just under $60,000 to ge
by graeme 5y ago
> You're assuming miners are sellers.
Actually, I’m not. If a Bitcoin is worth $60,000, then in an efficient market miners will spend just under $60,000 to get it.
Will some choose to keep the Bitcoin? Certainly. But, they still have to pay the bills. To do so they have a few options:
* Raise money from private investors or on the public markets. RIOT and MARA have done this. They pay their bills by selling shares.
* Loans. There are many ways for miners to put the Bitcoin up as collateral and get a loan, keeping the bitcoin
It turns out it doesn’t matter if the miners sell or not: both methods above involve getting an influx of money, either from equity or from lenders. All that matters for the analysis above is whether the market is efficient.
If the market isn’t efficient, and Bitcoin costs $20,000-$30,000 to mine, then my analysis falls apart. And you and I should start bitcoin mining companies to boot.
> They could very well be HODLErs buying at a huge discount.
See comment about efficient market above. There’s no discount. You could work a job, earn $60,000 and buy 1 bitcoin.
Or, you could take the $60,000, buy $60,000 worth of ASIC and coal and burn through it to mine 1 Bitcoin on average.
It works out the same, if market efficient
- deleted 5y ago[deleted]
- NickNaraghi 5y agoIt's actually way below efficient: a Bitcoin only costs $7-11k to mine at scale. [0] https://minerdaily.com/2021/how-much-does-it-cost-to-mine-a-bitcoin-update-may-2021/ https://minerdaily.com/2021/how-much-does-it-cost-to-mine-a-...
- graeme 5y agoThat’s very interesting. But those figures are from May, and once you include ASIC price the average is $19,000 at 5.5 cents per kwh. Is that the average electricity price paid today, after the China ban? If either electric rates or hardware costs have risen, then the cost rises. The article also ignores other costs: staff, accounting, real estate, all the other costs involved in running a company. It’s just looking at an ASIC magically teleported to a generator, and magically protected from the elements. Useful calculation but not 100% of costs. Would be very interested if someone did that calc. Probably can find it for RIOT or MARA by digging through their books. May do it for fun later.
- ur-whale 5y ago> But, they still have to pay the bills. Not if they have money in the first place and see spending said money as investing in Bitcoin on the cheap. As to whether mining gets you a Bitcoin at, above or below market price is an interesting question. Seeing the hashrate leads me to believe that the answer is "below". Lastly: if you can point to a way to get BTC-collateralized loans without taking a massive risk because of volatility, I'd love to hear about it.