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I think they are claiming they can mine something like 10k bitcoin/year (https://twitter.com/ThePrivatier/status/1547613977231798272 https://twitter.com/ThePriv

by gkapur 4y ago

I think they are claiming they can mine something like 10k bitcoin/year (https://twitter.com/ThePrivatier/status/1547613977231798272 https://twitter.com/ThePrivatier/status/1547613977231798272) going forward but I have no idea what the COGS/cost between labor/maintenance and electricity is to mine that. If it's say 50%, then those "mining assets" will pay back in 7 years. Seems like people are going to take a large haircut on whatever they deposited and then maybe get back some incremental cash over time.

oneoff786 4y ago
You think there’s a 50% gross margin on mining Bitcoin, after the price has fallen heavily, and we’ve entered a global energy crisis?
- loeg 4y ago
  Global energy crisis?
  - thematrixturtle 4y ago
    Checked your electricity bill lately? https://www.bloomberg.com/news/articles/2022-03-07/electric-bills-double-for-u-s-families-with-fuel-costs-surging https://www.bloomberg.com/news/articles/2022-03-07/electric-...
    - loeg 4y ago
      > Checked your electricity bill lately? My rates are 11-13 cents per kWh, the same as they’ve been for years. Our power is mostly hydro, with smaller amounts coming from nuclear and wind. So no, that pithy question isn't particularly useful.
      - secretsatan 4y ago
        Yeah, and that energy is infinite, so if we move all the miners to where you are that price will def stay the same
      - oneoff786 4y ago
        Maybe your local area isn’t representative of the general global market?
        remram 4y ago
        That's true of GP as well. This article is titled "... for US families".
- silentsea90 4y ago
  Difficulty adjustment takes care of reducing mining difficulty every 2 weeks based on hash power, so this should self correct
  - SahAssar 4y ago
    If the margins were that high then wouldn't it be reasonable to assume that no miners will stop mining but the margins will decrease? The miners will mine as long as it is profitable since they need to recoup the costs of specialized hardware somehow.
replygirl 4y ago
i remember struggling to do 50% in 2017 lol
bigiain 4y ago
1) The block rewards are going to halve twice during those 7 years 2) the hardware is going to become obsolete well b4fore 7 years (although I wonder how the semiconductor shortage is holding back custom mining hardware design and manufacturing? Maybe in 2029 people will still be using today's hardware? I seriously doubt that.) 3) I'm reasonably sure arbitrage pushes the cost of mining asymptotically close to the price of electricity to run it, so the margins are almost all whatever temporary, fraudulent, or criminal steps you can take to reduce your cost (or outright steal) the electricity.
- FabHK 4y ago
  In 3) s/arbitrage/competition, and apparently it is not only the electricity, but also the capital cost of the mining gear that you have to take into account.

by gkapur 4y ago

oneoff786 4y ago

You think there’s a 50% gross margin on mining Bitcoin, after the price has fallen heavily, and we’ve entered a global energy crisis?

loeg 4y ago
Global energy crisis?
- thematrixturtle 4y ago
  Checked your electricity bill lately? https://www.bloomberg.com/news/articles/2022-03-07/electric-bills-double-for-u-s-families-with-fuel-costs-surging https://www.bloomberg.com/news/articles/2022-03-07/electric-...
  - loeg 4y ago
    > Checked your electricity bill lately? My rates are 11-13 cents per kWh, the same as they’ve been for years. Our power is mostly hydro, with smaller amounts coming from nuclear and wind. So no, that pithy question isn't particularly useful.
    - secretsatan 4y ago
      Yeah, and that energy is infinite, so if we move all the miners to where you are that price will def stay the same
    - oneoff786 4y ago
      Maybe your local area isn’t representative of the general global market?
      - remram 4y ago
        That's true of GP as well. This article is titled "... for US families".
silentsea90 4y ago
Difficulty adjustment takes care of reducing mining difficulty every 2 weeks based on hash power, so this should self correct
- SahAssar 4y ago
  If the margins were that high then wouldn't it be reasonable to assume that no miners will stop mining but the margins will decrease? The miners will mine as long as it is profitable since they need to recoup the costs of specialized hardware somehow.

replygirl 4y ago

i remember struggling to do 50% in 2017 lol

bigiain 4y ago

1) The block rewards are going to halve twice during those 7 years 2) the hardware is going to become obsolete well b4fore 7 years (although I wonder how the semiconductor shortage is holding back custom mining hardware design and manufacturing? Maybe in 2029 people will still be using today's hardware? I seriously doubt that.) 3) I'm reasonably sure arbitrage pushes the cost of mining asymptotically close to the price of electricity to run it, so the margins are almost all whatever temporary, fraudulent, or criminal steps you can take to reduce your cost (or outright steal) the electricity.

FabHK 4y ago
In 3) s/arbitrage/competition, and apparently it is not only the electricity, but also the capital cost of the mining gear that you have to take into account.