Im guessing from your 'handle' that you have a vested interest in mining companies? Most companies do not sit on piles of cash, (Apple aside), they use it to make the company stronger or use it as collaterel to get loans for the same purpose.

As for taxation, most every listed company has to pay it. I don't know where you live but most of the developed countries have capital gains tax in one form or another, so the mining companies are not doing their investors any favours by holding onto large cash reserves, even if their share value is increasing. In some jurisdictions there are special schemes where investors can get their gains at zero percent, but there are lots of caveats.

Going back to Mr O'Leary and Ryanair, they didn't hold onto their cash but used it to build their airline. It's now the fifth largest airline in the world by passenger numbers.


As an aside, Mr O'Leary used to love winding up his passengers, and would give the press stories (totally untrue) about what he was going to do next with the airline. Two of his best ones were that he was going to charge passengers to use the aircraft toilets, and that he was going to weigh passengers during check in, and charge them extra if they were overweight. You can imagine how that went down. However, O'Leary gave his passengers what he originally promised - cheap fares - and passenger numbers kept on rising, as did his share price.

As far as I am aware, none of the publicly listed mining concerns have ever given a dividend. If you take any of them they'll boast about how many Bitcoins they have mined, I've always been under the assumption that:

- A listed company doing well will reward it's shareholders loyalty.

- If the company shares are doing well then many shareholders would rather have a higher share price than a (usually) smaller dividend


If I take a well known European Low Cost airline, namely Ryanair, their CEO Michael O'Leary was adamant that the share price was always going to trump an dividend, and he was right - for his shareholders.

The mining companies don't seem to want to share any of their booty, and all of their shares have taken a tanking since xmas. All of them made a fortune out of their IPOs and they are sitting on tons of cash along with their Bitcoins.

Anyone care to guess when they might want to do the right thing by their shareholders?

Admist all this talk, has anyone actually looked at the size of the BZ1 chip?

14.1 mm<sup>2 and only 137 GH? At 4000 per wafer each chip would cost a customer around $3 - it's got to be the worst mining deal for years,  $23 per TH versus a standard cell implementation of around $5 ?

I'm really disappointed in Intel, perhaps the second iteration will do much better.</sup>

[quote)And there is a new layer in the industry, initially, I thought there is a mistake from google but indeed the name is Rhodium Enterprises, and they don't mine Rhodium they mine bitcoin and they plan a 100 million IPO.
From the SEC filing:


And this:

That would be roughly 2.5 cents/kwh...damn!
[/quote]

They are not going to be the only new companies mining BTC, it's just too good a deal to ignore - if you have access to lots of other people's money, and an IPO is a sure way to get it. Look at the success of a relatively smaller player like HUT 8. (incidentally, I do have shares in them but it bugs me that they've never declared a dividend).

Has anyone on this forum ever tried to make some kind of community-based-funded organisation that could also do the same kind of thing?

Marathon is not the companies you should be watching:

Core Scientific has been planning a listing on Nasdaq which would (possibly) give them a windfall of $4.3 billion, about 3.3 times what Hut 8 got when it listed. This is a truly scary amount of capital - with half that amount of money they could easily buy themselves a world class design team, get access to TSMC's 3nm process and make a miner which would cost them less than 1/3 of what Bitmain would charge them for their latest machine, but with an added 30% hashing capabilty at the same power level. Think of another 100+ EH on the network in 18 months

As for Phoenix and their purchase of '$2 billion of asics' at the end of 2022, the scenario would be the same.

Don't mean to be the profit of doom, but this will happen if either or both of these companies get their finance.

OK, what's your guess?

Yeah, that's a sound scenario but in this case BM is the biggest shovel supplier in town. I don't have any idea of how many miners they have operating on their own behalf, and like I said I don't have the math to model the real life scenario. My gut tells me that holding onto the miners will make them a lot more money than selling them. If too many miners are sold then the hashrate goes higher and no one makes money.

I know this is all a bit irrelevant to mining speculation as such, but I think it would be interesting to see what strategy is best for the manufacturers.

Firstly, a happy and prosperous New Year to all. Promises to be very interesting indeed.

Don't know how many of you read the comics (Coindesk etc) but I saw an article the other day about Marathon Mining's purchase of 78,000 Bitmain S19 XP's for $879 million, or $11,270 per machine. Correct me if I'm wrong but isn't this the same price as paid for a single unit?

if it is then the probability is that everyone pays the same price - no discounts. I've often wondered why Bitmain bother selling miners rather than just using them. By my reckoning they can make a S19 XP for just over $2000 including their operational, manufacturing and amortised design costs in which case the machine could pay for itself in 4 months, even with BTC at $45k. Sure, they can get better cashflow by taking deposits and staggering deliveries, but is it worth making $9000 profit at the expense of adding more hashing capacity to the network?

My math isn't quite up to scratch so perhaps someone could do the calculations? Is BM's strategy the best one?

My apologies if my post is off topic.

Just noticed this post. If you read the patent it tells you all you need to know about what Intel is about, ie an optimized, energy efficient datapath. I suspect they gave this project to an intern or new employee who was interested in Bitcoin. If you don't have a well timed sha-256 design it will result in adders and other logic elements switching mutilple times to get a result instead of one. There are several other implementations that preceed Bitcoin, most notable from Professor Luigi Dadda, a true digital pioneer who sadly died in 2012; he didn't try to patent his optimisation and that says a lot about Intel's 'suits'.

Intel have much better uses (and profits) for their silicon than using it for bitcoin miners, and it's the same for Qualcomm and the other big hitters (even thought they don't have their own fabs). Believe me when I say that in the unlikely event that either of those corporations decided to build a mining chip, it would comprehensively outperform what currently exists.

You could build a home setup relatively easy, the Beeminer is nothing more than a steel box with a pump and a heat exchanger. It doesn't come with immersion fluid so you'd have to take account of the cost to fill the tub, the dielectric fluid comes in at around $180 per 20 litres.

Phil is right about using an auto radiator as a primary heat exchanger, even a relatively small radiator with 16" push-pull fans can 'exchange' over 50kW to the atmosphere at 35 C, just think for a moment about how many big SUV's there are that operate in hot coutries without a hitch. I've attached a link about a project to make a compact auto radiator that can 'sink' 70kW of heat : https://www.maplesoft.com/support/help/maple/view.aspx?path=applications/RadiatorDesign

It's a bit technical but it shows just how much energy a 18 x 18" radiator with fans can dissipate. It would have to be de-rated a bit to cope with the dielectric fluid though.

I'm sure there are plenty of guys on the forum that could help you build an immersion setup, I'm confident you could make a diy setup to host 20 S19 pros for less than $10k.

Anyone up for a project?

Like your attitude. I dislike mining companies as they have huge advantages over small miners, you might say that's the way capitalism works and you would be right. It's a classic case of the rich getting richer....I am a bit perplexed at the $2 billion for asics, that equates to around 100,000 300mm wafers worth!

Sorry to spoil the party:

https://www.coindesk.com/business/2021/11/09/uae-based-phoenix-technology-consultants-places-order-for-650m-worth-of-crypto-mining-rigs/

"Deliveries of the “new generation” machines will start in 2022. Phoenix will also place orders for over $2 billion worth of crypto mining application-specific integrated circuits (ASICs) in the third quarter of 2022."

Interesting times!

Two bits of information that maybe of interest, my apologies if this is old stuff:

1. blockchain.com estimates network hashing rate at 186 EH. Someone is adding a fair amount of hashing power

2. about 6 weeks ago Genesis Mining (owned by Coinbase) raised $431 for expansion; yesterday Coindesk reported that Genesis will be adding 9.4EH to the party in the
    next 12 months, and they are probably not the only ones. They are building a new 300MW facility in Texas, suggesting that it could hold up to roughly 85 - 90,000 s19
    pro's. I'm guessing they'll be building their own infrastructure, so taking away $31 million means that they would be getting their miners for around $4500, somewhat
    less than Bitmain's $11,440. As a business can they offset the 25% import duty added onto Miners against their Texas corporation tax?

At $4,500 small mining concerns are at a huge disadvantage as they don't get any discounts, and with global energy prices starting to rise things can only get worse. It's not
difficult to see that even with cheap hosting at 6c/kWH and a likely 200+ EH going into the new year, a current S19 pro will take well over 2 years to break even.

Meanwhile, as I was browsing through what mining companies say about new gear, this is from Bitfarms:


How the hell do they manage to get those prices?




[/quote]

In the press release they mentioned that "Bitfarms’ new production facility will be housed in four warehouse-style buildings inside the gates of a private power company. In light of reduced demand in the rural location where the power company is located, in April 2021 the parties signed a mutually beneficial eight-year, 210 MW power purchase agreement to power the facility."

Possibly a hydro project gone wrong. Given the timescales to build a hydro plant it may be that economic factors changed over the years, so 2 cents per kWh might look very attractive if you don't have much other custom. 210 MW at 2 cents equates to around $38.8 million a year, more or less guaranteed, plus the power company  mentioned will no doubt be charging Bitfarms ground rent for their facilty, plus they don't have to go to the expense of erecting pylons and wires to take the power to the customer.

Seems like a win-win for both parties, very smart thinking.

I always enjoy reading your posts Kano, and agree with much of what you say, but Samsung and the other foundries do not design hashing chips, all they do is make the silicon design rules and process the wafers. If you take some time to look at academic papers you'll find a whole universe of techniques to build relatively simple logic units, and some of them are highly innovative. Most asic designers have been schooled in mainstream techniques and don't usually need to go elsewhere to find solutions. That's no disrespect to them, productivity and research are two very different things.

Full custom asic design is a specialised area and there are few designers trained to do it, so I'd take you to task on your initial statement about 'claims'. Mining design is a very niche area and if you believe that every technique possible to increase efficiency has been explored, I'd say you were mistaken.

There's several different ways to construct logic gates at transistor level, especially if you want to trade off speed against power consumption, and design rules have to be observed. This is also true of the power hungry flipflops and adders used to construct the sha256 hashing block. The best designs I've seen were done by mixed signal guys, they have a much better understanding of the analogue nature of high speed logic.

I agree with you that most pure digital guys are a bit lazy and use standard cells to make their circuits, but in their defence, most of their designs are vastly more complex than the sha256 block.

Just need to get a bit cleverer with the hashing engine design. There's lot of ways to skin the proverbial silicon cat.

Your comments about media 'claims' is bang on, unfortunately we live in a society where you can't believe anything the media pumps out.

As for new miners, TSMC says that their 5nm process will give you either 30% less power or 15% performance (speed) versus 7nm, I'm guessing the balance for new chips might be somewhere in between. They also claim 1.8x logic density over 7nm but that doesn't really help if power advantage over 7nm is only 15%, especially if the wafer price for 5nm is supposedly 2x that of 7nm.

I believe you're right about the difficulty going up and up. Even if Bitmain and their chums are holding back rig supplies, one of them will break ranks or a new competitor might appear. Bitcoins ability to conjure money out of thin air is just too much to resist.

I know this might sound like a conspiracy, but has anyone thought that the mining companies and the rig manufacturers are actively colluding to keep the difficulty as low as possible? Such a scenario might suit all parties if the status quo is maintained, cartels are nothing new!

I'm a bit puzzled about what has happened to all the Chinese mining machines that disappeared off the network. From a peak of 180 Exxahash down to the current 130 is an awful lot of hardware, and from what I know about China (not a lot) it seems that getting them out of the country is reasonably easy - if you know the right people.

You would think that with the potential money at stake all of them should be rehoused in a friendly country by now? I know there's been problems with shipping containers for some time now, but even having to spend $20,000 to get a 40 footer load of machines is peanuts compared to whats at stake.

Lastly, what is the situation with Bitmain's orders taken earlier this year for October delivery - did everyone get what they paid for yet?