Core Scientific Firm to Pay Debt Through Bitcoin Mining

[Ayebabara]

Core Scientific is a bitcoin mining firm in Austin Texas at United States of America. On the 21 of December, 2022, they have filed for bankruptcy protection for the down fall of the industry. There have been stories that bitcoin exchange platforms or firms all over the world have went into bankruptcy and could not meet up the demands of their customers so the firm (s) collapsed, some of them even
Sacked their workers because of the bankruptcy which they could not pay their workers again. Core scientific took a very good step to protect the firm from the bankruptcy.
Bitcoin miner Core Scientific files for bankruptcy

[franky1]

https://www.prnewswire.com/news-releases/core-scientific-announces-comprehensive-restructuring-transaction-301708021.html

"failure by certain of its hosting customers to honor their payment obligations."

in short. they were not 100% inhouse mining.
sound like they were acting as a cloudminging scam where they hoped customers theat contracted into a monthly payment would continue to pay in a monthly fee even when customers were not getting out the quoted value at start of contract.
(no one is dumb to deposit 0.X and get 0.00X and still willingly pay 0.X)
or
the company were purchasing "cloudmining" from other people and those cloudminers didnt pay them the rewards

ha ha. everyone knows cloud mining is a scam

During this process and upon emergence, the Company will continue to operate its existing self-mining and hosting operations, which remain significantly cash flow positive on a debt-free basis.

their smaller self mining structure has pre-paid electric contracts into 2023 so they can continue to self mine inhouse and are currently debt free not owing any bills.

[avikz]

The main reason why the bitcoin miners are failing is the electricity price all over the world. Especially the European and US miners are hit by this constant surge in energy price. But it's good to know that their bitcoin mining business is still cash flow positive. I am not sure how long it will remain the same.

It's always unfortunate when a company has to file a bankruptcy. But here the only silver lining is that the bitcoin mining is still profitable. Hopefully they will be able to pay back their debt through mining. The chances are slim but worth a try!

[franky1]

The main reason why the bitcoin miners are failing is the electricity price all over the world. Especially the European and US miners are hit by this constant surge in energy price. But it's good to know that their bitcoin mining business is still cash flow positive. I am not sure how long it will remain the same.

industrial self-mining asic farms have pre-bought electric on 2 year contracts. meaning they have yet to be hit by any electric increases from a 2021 contract
though this will change in 2023

the main miners that got hit by electric are more of the small hobby miners that purchase by monthly residential electric bill

looking at the network hashrate i would say 200exa is industrial miners mining efficiently at a good rate unaffected yet by 2022 changes
where the rest of the 30exa-80exa is the hobby miners that come and go depending on speculative market and underlying bill cost changes

[OgNasty]

I don't really see them having too many other options.  Their mining gear is likely worth pennies on the dollar compared to what they paid, and they would have to pay more costs to even sell it.  With their infrastructure likely already in place, the logical thing would be to continue mining to pay what they can to their creditors.  However, this is much pretty the end of their business, as not being able to stack during the downtimes makes it difficult to compete when things get good.  I'm guessing when you hit bankruptcy that is less of a concern though.

[avikz]

The main reason why the bitcoin miners are failing is the electricity price all over the world. Especially the European and US miners are hit by this constant surge in energy price. But it's good to know that their bitcoin mining business is still cash flow positive. I am not sure how long it will remain the same.

industrial self-mining asic farms have pre-bought electric on 2 year contracts. meaning they have yet to be hit by any electric increases from a 2021 contract
though this will change in 2023

Wow! Futures contract in electricity then! But if things will change in 2023, the situation may become even worse it seems. Energy price is constantly showing an upward trend so in 2023, if the miners need to renew their contract, that will be much higher than the existing price.

So the industrial miners will then have to face further issues with their cash flow. From what you know Franky, do you think 2023 is going to be bumpy for crypto market?

[franky1]

I don't really see them having too many other options.  Their mining gear is likely worth pennies on the dollar compared to what they paid,

altcoins(the place old gen hardware go to retire) buy the s9 at $100

thats 15thash at 1.4kwh

so lets assume 2020's s19 of 105thash for 3.25kwh
which is a 45thash per 1.4kwh

which is a 3x efficiency.
thus the resale value would be $300 IF s19 if it was 45exa
or more precisely $700 for like for like efficiency of 105thash

the most they will get back is $700, but this value is soon dropping due to new 2022 generation asics

[Hispo]

-snip-

I never fully understood the point of "cloud mining", even if it was a legitimate business, for it to be profitable the owners of the hardware would need to "rent" their hash power to competitive rates for them, so they could pay electricity, maintenance, their own salary, etc. So whoever pays for a contract to "cloud mine" an specific algorithm or coin does it hoping for that coin to increase in value, basically getting coins at discount, otherwise they get overpaid coins.

Would not be easier for anyone who wished to speculate just to move onto a reputable exchange and play with future contracts? 

[franky1]

-snip-

I never fully understood the point of "cloud mining", even if it was a legitimate business, for it to be profitable the owners of the hardware would need to "rent" their hash power to competitive rates for them, so they could pay electricity, maintenance, their own salary, etc. So whoever pays for a contract to "cloud mine" an specific algorithm or coin does it hoping for that coin to increase in value, basically getting coins at discount, otherwise they get overpaid coins.

Would not be easier for anyone who wished to speculate just to move onto a reputable exchange and play with future contracts?  

ok lets run a non scam scenario of cloud mining..
but include some factual economics to show some flaws even in a legit cloud mining system

usually industrial size asic farms have efficient mining costs.
take this year. its about $15k a coin mining cost(hardware+electric) in the most cost efficient farms of wholesale bought asics and lowest electric regions

however users living in say hawaii if they were to personally mine on their residential rate would have a $90k per coin cost to mine
so they dont want to locally mine from home

they are then advertised into 'if you pay us $24k" we will get you 1btc in the summer (it sounds like a good deal compared to self mining at home in hawaii, right)

the cloud mining company mine for $15k and sell for $24k so its good business

however when the bitcoin price drops to $17k the cloud service can still sell coin for $2k profit to other people. but wants the customer of their cloud to continue to pay the agreed $24k/btc rate.

but the customer would be stupid to still be locked into a $24k contract for 1btc

[Hydrogen]

Crypto mining ventures in austin texas, may have been powered by new wind farms constructed in the area.

Bankruptcies of crypto mining ops in state, could place strain on wind farms seeking energy consumers to sell renewable power to.

One of the positive aspects of crypto mining is it being very mobile and able to locate anywhere on the globe with an internet connection. This made it well suited to target surplus forms of renewable power. Which in turn helped fund the expansion of renewables around the globe.

This issue is much bigger than crypto mining. And carries a potential to negatively affect many separate industries.