Bitcoin Forum

https://fortune.com/2020/08/27/bitcoin-mining-dcg-foundry-north-america-btc/

Barry Silbert made an announcement of an announcement yesterday. Guess this is it.

From reading this I didn't realise Bitmain's plans to mine in Texas had gone up in smoke. Hope this lot have done their sums.

An interesting article, not only because of the mining farm itself, but also because of the context in which the article was written. Silbert looks at this endeavor not only from a profit perspective, but from a geopolitical and economic perspective that goes in the direction of relocating mining power and creating new jobs in the US

crypto mining is a notoriously opaque industry

crypto-mining remains a highly opaque sector

https://fortune.com/2020/08/27/bitcoin-mining-dcg-foundry-north-america-btc/

Barry Silbert made an announcement of an announcement yesterday. Guess this is it.

“Chinese miners are generally more leveraged than North American,” Ethan Vera, a pool operator at North American Luxor Mining Pool, told Decrypt. “It's clear that they are highly levered because during the fall in crypto prices in March, almost all of them margin called.”

Matrix Port, the newest venture from Bitmain co-founder Jihan Wu, also makes loans to many of China’s biggest miners, Vera confirmed. These miners may have access to the cheapest electricity in the world, but that won’t matter if all of their revenue goes toward paying off their debt.

As these operations implode, mining firms in North America (especially when they finally rig up new machines) will fill the gaps in hashrate.

Denis Rusinovich, who operates an 80-megawatt mining operation in Kazakhstan, expects that, once many more new generation ASICs come on line, this “will [have a] major impact [on] hashrate redistribution for the next 12 months.” He elaborated that, if the Bitcoin price is high after the halving (around or above $8,000), then inefficient miners will have a reprieve, but if Bitcoin is trending towards $4,000, then he expects we could see “price wars” wherein larger farms come out on top over smaller ones, something that could risk centralizing mining in China further.

Even with Bitcoin at $9,000, it’s likely that this halving will hurt North America “pretty bad in the near-term,” Vera  told Decrypt, “but it will be good in the mid-term.”

Samson Mow, the Chief Strategy Officer of Blockstream, agreed, adding that “[w]e’re already seeing a large segment of Bitcoin mining move to North America.” These include Blockstream’s operations, a 300 MW joint-operation between its Quebec and Georgia facilities. Munich-based Data AG (formerly, Northern Bitcoin AG) has established its own 300MW facility in Rockdale, Texas. With 300 MW total capacity, these are some of the largest Bitcoin mining facilities in the world.

Other examples of North America’s burgeoning mining sector are not too hard to find. One firm, Upstream Data, is selling mining rigs to oil drillers to help them make better use of flare or vented gas. Another company, VBit, is establishing a 200 MW facility in Alberta, Canada.

Mow expects this wealth to run over into the ASIC’s chip manufacturing business, as well, saying “it’s inevitable” that “major ASIC companies setup manufacturing facilities in North America in the coming years.”

That struck me too. No one lasted very long pursuing anything other than ruthless profit so I dunno how he's framed this with his board or whatever.

relocating mining power away from china is good for DGC's and frankly all of our interests.

i'm not surprised. hashpower has been quietly moving from china to north america for the last couple years, and mining industry insiders have been speculating this would continue post-halving---especially if prices remain high, as they have.

Decentralization of that power is certainly desirable for Bitcoin, this would definitely give it more credibility in the eyes of investors who, to put it simply, do not want to invest too much in something that is in some way controlled by China.

From reading this I didn't realise Bitmain's plans to mine in Texas had gone up in smoke. Hope this lot have done their sums.

While cheap power has long been the primary consideration for crypto miners, Colyer says that other factors are becoming increasingly important. In the case of Foundry, he believes that access to a new generation of energy-efficient mining equipment, as well as its transparent business culture—crypto mining is a notoriously opaque industry—will help it succeed.<>While China may be a strategic competitor in the cryptocurrency industry, Foundry is nonetheless relying on Bitmain and other Chinese companies to supply mining equipment.

Hope this lot have done their sums.

It is interesting that an article on this topic was published in February this year, and the author of the current article obviously used it as a source because some sentences are very similar.

Example :



No matter how the article is intoned, there is no doubt that someone will invest $ 100 million and will not expect a profit - for that reason maybe the whole thing should be viewed from another angle. From the second article (or rather the first), Silbert, who is of course the founder of Grayscale, thinks that one of the obstacles that repels big investors is precisely that the Chinese have too much power in their hands when it comes to Bitcoin. If the situation were to change in a way that mining power and mining equipment production is moved to the US, then confidence in Bitcoin as an investment would likely increase.

In other words, investing in Bitcoin mining should have a positive impact on the business of other companies within the DCG group, and it is possible that mining will be profitable as well. I think the whole thing is doable, but only if politicians can be persuaded to support the idea - and if lobbyists get to the right people, few would resist the fact that it's an industry worth over $10 billion a year (mining + equipment manufacturing).

An interesting article, not only because of the mining farm itself, but also because of the context in which the article was written. Silbert looks at this endeavor not only from a profit perspective, but from a geopolitical and economic perspective that goes in the direction of relocating mining power and creating new jobs in the US, with of course taking advantage of electricity surpluses where they exist.

The article also mentions "lawmakers and policy groups in Washington, DC" who are becoming concerned about China's influence in the industry - and in light of the trade war between the two countries, it would be realistic to expect the US to take the initiative - there is only one small problem, Trump attitude towards Bitcoin, and we all know that is negative.
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Trump, or rather his advisors(because I bet Trump himself doesn't know a damn thing about Bitcoin mining), should change their attitude as soon as possible, if they want to be the winners in the war. BTC mining should be subsided by government because only a few private entrepreneurs can tolerate the occasional price dumps. Like any relatively new forward-looking business, it should be supported by government to thrive.

Trump, or rather his advisors(because I bet Trump himself doesn't know a damn thing about Bitcoin mining), should change their attitude as soon as possible, if they want to be the winners in the war. BTC mining should be subsided by government because only a few private entrepreneurs can tolerate the occasional price dumps. Like any relatively new forward-looking business, it should be supported by government to thrive.

Hell no. Let it live and die on its own virtues. No taxpayer is going to be delighted at paying some miner to make money. If they can't cut it then it's their problem and they have to make way for someone who can and that's how it should be.

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Here we go again, every day we clap how good decentralization is, how resilient Bitcoin is, and how the evil gubbermint can't stop it, and then, the same government should subsidize mining or we're in trouble. How the hell is this any different from the government bailing out banks? If the network can't stand for itself it means we have a serious problem, and patching it with cash will only solve the problem temporarily, and when there is no more cash left to do it, then what?
How are you going to explain to a guy that pays 20c/kWh that his bill will double in order to protect Silbert's billions?

If there would be a real war which obviously is not the case, is it that hard to see how it will end?
No country will want to deal with something that can be attacked by a foreign nation and spend billions to defend it when they could simply go centralized, that's the harsh reality, no central authority will step in to save it for the sake of just a few investors, they will all wash their hand and let it be taken over.

Hell no. Let it live and die on its own virtues. No taxpayer is going to be delighted at paying some miner to make money. If they can't cut it then it's their problem and they have to make way for someone who can and that's how it should be.

it's an interesting question, actually.

consider states like australia, whose economy is based heavily on mineral and fossil fuel extraction. both federal and state governments subsidize miners extremely heavily---their effective tax rate is a fraction of all other sectors.

if bitcoin mining were to become significant in terms of GDP and the labor market, i reckon they would become increasingly subsidized for the same reasons. local governments, particularly in economically blighted regions, have even more incentive to subsidize miners for the sake of local job creation.

Here we go again, every day we clap how good decentralization is, how resilient Bitcoin is, and how the evil gubbermint can't stop it, and then, the same government should subsidize mining or we're in trouble. How the hell is this any different from the government bailing out banks? If the network can't stand for itself it means we have a serious problem, and patching it with cash will only solve the problem temporarily, and when there is no more cash left to do it, then what?