US BTC mining farm buys 17,600 miners

[hugeblack]

TLDR;

 - Core Scientific has bought 17,595 Bitcoin miners from Bitmain.
 - Max Keiser believes a global hash war is imminent due to bitcoin's game-theory.
 - PayPal and Venmo entering the space bolsters

Core Scientific, owned by the American Bitcoin mining company, has announced that it has purchased 17,595 of Bitmain S19 miners, which is the largest number of miners bought in one go.

Kevin Turner, president & CEO of Core Scientific said:

“with market-beating long-term power contracts in place and the most powerful miners ready to be deployed at a moment’s notice, Core Scientific is well-positioned to facilitate our clients’ digital mining needs at a considerably faster pace than the competition."

The new miners are set to be distributed among Core Scientific 655,000 square foot network of data centers >


Read more and source ---> https://chrisoncrypto.com/blog/f/btc-mining-farm-buys-17600-miners-as-global-hash-war-looms

[Upgrade00]

- Max Keiser believes a global hash war is imminent due to bitcoin's game-theory.

I agree with this, lots competitors are entering the field. Bitcoin hash rate is now very decentralized across the various mining pools and we're likely going to see a shift in that over the next few months as more big players come in.
This is a big bet for core scientific as they are not only purchasing the largest number of miners bought in one go, but they're are also scaling up the amount of power they can utilize.

So; huge investments in;
• equipment
• locations to house them and,
• safe sources of power.
This is a huge bet on Bitcoin in the next months especially as some of their competitors gets cheaper electricity.

[btc_angela]

Right, this could trigger a mining war, but I guess the one that going to benefit is us, bitcoin enthusiast. And perhaps mining companies now are gearing towards the next four years of bitcoin mining and then wait for the imminent bull run. It might take longer than expected though, but at least they are going to be prepared, making bitcoin mining business a billion dollar business. And for sure competition are going to be tough as well.

[traderethereum]

I can not imagine how much money to be used to buy that miner.
They want to be the next giant company that mining bitcoin with large equipment.
It will become a never-ending story from the war of mining bitcoin, and the other big company will do the same thing while bitcoin price does not yet increase so high.
They think that it is the opportunity to mine bitcoin with big miners which not many big companies can do.
They need to think about the electricity cost that will be too high, and I am sure that they will use renewable electricity.

[boyptc]

Very interesting.

If they will continue doing this, then there will be a setting that the most hash coming from China will be a balance as there's now coming from the US.

As a normal person and holder, I think we'll benefit from it.

[djcaoile1205]

They are sure that these miners will pay off?

[Lucius]

And there are so many conclusions that after halving crypto mining has become unprofitable, so then one can ask why someone buys such a large amount of mining equipment outside of China? It is more than obvious that the buyer thinks that the investment will pay off regardless of the reduced reward, electricity prices, taxes, labor costs and so on.

While I welcome the decentralization of crypto miners, I still don't think it's a good idea for most to start moving from one country to another and for the USA to be what China once was in terms of hash power. Last year we had a chance to read the news that Bitmain plans to build a 300MW mining farm in Texas, which means things are changing after all, and of course with the blessing of the US government.

As for PayPal and Bitcoin, this is a story that has been around for years, but does it make any sense for PP to be involved with BTC in any way? I only see the escrow option here - but that would only make the whole transaction more expensive in the end...

[Febo]

And there are so many conclusions that after halving crypto mining has become unprofitable, so then one can ask why someone buys such a large amount of mining equipment outside of China? It is more than obvious that the buyer thinks that the investment will pay off regardless of the reduced reward, electricity prices, taxes, labor costs and so on.

If you go to mining section of this forum and read posts from 2011 you will see that miners keep complaining how unprofitable mining is. But they keep mining. I think they just want to avoid more competition and simply try to convince new possible miners to start mining.

[stompix]

I can not imagine how much money to be used to buy that miner.

Pretty simple
Assuming they are S19Pro, as I doubt they bought normal s19s with no discount it's around ~ 42 million but I assume they spend way less since they probably got a hefty discount. Nevertheless, as high as it might seem currently the whole farm will make for around 1.5% of the hashrate.

And there are so many conclusions that after halving crypto mining has become unprofitable, so then one can ask why someone buys such a large amount of mining equipment outside of China?

Well, it's investors money   so those are easier to spend. They raised 100m$ and then another 20m$, they have money to burn.

Last year we had a chance to read the news that Bitmain plans to build a 300MW mining farm in Texas, which means things are changing after all, and of course with the blessing of the US government.

That project got canceled in January.

[dothebeats]

They are sure that these miners will pay off?

I'm pretty sure that they have already completed the necessary cost-accounting and risk assessments before pulling off the trigger for the miners. Also, for bitcoin miners to actually be profitable, more miners are needed for exerting more hashrate and in turn, returning more profits. For a farm that accounts over 1% of the whole network hashrate, I doubt that it wouldn't breakeven fast enough to make profits sooner.

--

I don't see this as something of a 'war' but rather redistributing the powers that the Chinese miners have over the hash rate. This is actually good since the scene is developing and that we might see miners being produced that will be more efficient and that could level the playing field pretty hard. While that may not affect us, the bystanders and the users, it helps shape the scene to be more alive and to be more 'secure' from centralization.

[wozzek23]

I have always remembered the term "the people that made the most money during gold rush is the shovel manufacturers" in times like these. If bitmain has sold 17.6k amount of miners to some other company, think about how much they actually have and how much they are making with it.

At the end of the day this company wouldn't have sold this many products to someone else if they believed they could have made more profits with it themselves, sure it could be a long term deal and it could be because they rather get less money now rather than make more money in 5 years but its still profitable for them, no company would like to make a loss right? So this means this is a bigger deal for Bitmain than it is for the scientific core group, they might have manage to buy 17.6k machines but that means Bitmain managed to sell 17.6k machines and god knows with that money how many machines they will create.

[Kakmakr]

It is not really a fair fight...right. The Chinese will simply develop and manufacture better and faster ASICs and then sell the old ASICs to the USA and then they will once again have more hashing power.

The USA have brilliant facilities in Silicon Valley to develop their own technology, but they could care less. Now the USA wants to sit back and blame the Chinese for having the majority of the total Bitcoin hashing power.  

[The Sceptical Chymist]

I'm not sure how I feel about mining being this political, though I suppose it's always been that way.  Seems like everything these days is political, especially when it comes to China and the US.

That project got canceled in January.

Ah, that was the first thing that came to mind when I read this and I wasn't aware that they'd scrapped the project.  I'll have to take a look at that article to see why. 

They are sure that these miners will pay off?

I'm sure they've done some math beforehand and are as sure as they can be.  I bet that taxes are a big disincentive for creating mining farms in the US, though I couldn't say for sure.  Anyway, it'll be interesting to see what comes of this.

[bits4books]

I would like to see how these "cool and rich" will finally recognize crypto and start to stack sats / building farm. Such a case can provoke a trend of new construction of large farms and push btc up....

[stompix]

It is not really a fair fight...right. The Chinese will simply develop and manufacture better and faster ASICs and then sell the old ASICs to the USA and then they will once again have more hashing power.
The USA have brilliant facilities in Silicon Valley to develop their own technology, but they could care less. Now the USA wants to sit back and blame the Chinese for having the majority of the total Bitcoin hashing power.  

Stop making this an issue between countries, it's not!
Before this article, everyone was saying 99.9% of the hashrate was in China, that means bitmain was selling only to chinese companies, which means ..the chinese were screwing the chinese? 

It's an American company buying mining gear from a Chinese company that buys its chips from a Taiwanese company.
There is no US, China, Taiwan here, those are private companies that do whatever they want if a company from Bulgaria opens a mining farm it doesn't mean the European Union turns to bitcoin mining.

And there will be no sudden jump in ASICs performance soon,
The S3 was launched in 2014 , at 0.77 J/GH.
The S9 was launched in 2016 , at 0.1J/GHs
The S19 was launched this year,  at 0.03J/GHs

Efficiency gain dropped from 8x in two years to 3x in 4, when it will hit gains of only 30-50% those machines will take years to ROI and they will not make older gear obsolete as easy as we were used to.

Such a case can provoke a trend of new construction of large farms and push btc up....

Mining and hash rate have nothing to do with price.

[TheGreatPython]

I think it’s very good that more big players from around the world goes into this mining with more computing power, so that the bitcoin network will get more has power to transact in more secured way and there wouldn’t be just one organization having more power than the others. There should be many of them and the rate of power they have should be similar to each other.

So they really did a good thing here and 17.6k of S19 miners is no joke, that’s a really huge equipment they bought there. I’m also hoping to see some big changes in the market. After halving, it is highly expected old equipment need to be plugged out and new hardware should be added so that mining will be profitable. It seems lots of continuous maintenance works need to be done for making a mining company competitive to sustain on their business.

[20kevin20]

I guess it's all good unless it becomes an issue for Bitcoin's decentralization.

"Hash wars" sounds interesting, but when we have multiple very large farms doesn't that mean that smaller miners (I mean those mining in a pool with few GPUs from home, for example) might have no chance against them and therefore would be needed to abandon the mining? And even if they don't, the more farms there are, the least smaller miners' influence would be.

I'm not very sure if having large farms competing with each other is better or worse for Bitcoin's future and decentralization.

Stop making this an issue between countries, it's not!

No subject is fun without a China vs USA theory, right?

[exstasie]

Mining and hash rate have nothing to do with price.

Isn't it possible that traders could react to changes in hash rate, or lack thereof?

Miners are also investors too. When more efficient farms come online and squeeze out weaker miners, isn't it possible some of those former miners represent new buying demand, as a replacement for their mining investments?

Just playing devil's advocate.

[stompix]

Isn't it possible that traders could react to changes in hash rate, or lack thereof?

It would be a pretty bad indicator.
An increase in hash rate doesn't always mean more mining gear or that miners are betting on the price increase.
A miner could increase his own farm hashrate by x2 and at the same time decrease his costs and his exposure, new s19pro are 3 times more efficient so you could interpret also as miners trying to protect themselves from future swings and surviving rather than being bullish and expanding. And margins are already slim, hash rate really can't go up like it once could, every 1% gets more costly, from 2000 miners worth 1500$ 3 years ago, it has become 10 000 at 2500$/piece, just like the amount of money needed to raise the price by x percentage.

If I could trade the hashrate I would definitely use the pice as an indicator, the other way around...nope!

Miners are also investors too. When more efficient farms come online and squeeze out weaker miners, isn't it possible some of those former miners represent new buying demand, as a replacement for their mining investments?

Hmm, I pondered a bit what answer on this, and this is the best I can do: "God knows!" 

"Hash wars" sounds interesting, but when we have multiple very large farms doesn't that mean that smaller miners (I mean those mining in a pool with few GPUs from home, for example) might have no chance against them and therefore would be needed to abandon the mining? And even if they don't, the more farms there are, the least smaller miners' influence would be.

Home mining with 1-2 gear is dead, the manufactures have gone the way of putting more and more boards and increasing hash per machine, increasing power consumption per miner, when the gear that would not lose money at usual electric prices is averaging 1500kwh per month per machine, about 2/3 of what somebody in your country  is burning in a year...that's no longer home mining.

No subject is fun without a China vs USA theory, right?

I wish people would just switch to something else, India vs Nigeria or Feroe vs the Vatican, it's not even annoying anymore, it's boring.

[Zackgeno96]

Right, this could trigger a mining war, but I guess the one that going to benefit is us, bitcoin enthusiast. And perhaps mining companies now are gearing towards the next four years of bitcoin mining and then wait for the imminent bull run. It might take longer than expected though, but at least they are going to be prepared, making bitcoin mining business a billion dollar business. And for sure competition are going to be tough as well.

A few years back this used to be a business for all and anyone could have profited with it with a decent computer. But now this is only the business for big boys club and other small players are also exiting the market because of the unprofitable market for them. The number of huge data farms is also rising in remote areas with a lot of hash power just for the purpose of mining Bitcoins. I guess for other people who own small rigs they should now move to other coins and hope to make a living with it.