The negative impact of mining farms

[MrBig]

I'm talking about centralization of mining and this crook Sam Cole milking BTC for fiat. Meanwhile, you're talking about BTC becoming the dominant world currency and decentralizing the global economy? I think we're on totally different pages.

And I'm saying centralization of mining is not happening and miners in majority are not dumping BTC for fiat.

Well if the mining profit margins are so narrow, how are they staying in operation without dumping BTC for fiat to cover their costs? They must have endless reserves of cash to hold all that BTC until the price rebounds right?

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[brg444]

I'm talking about centralization of mining and this crook Sam Cole milking BTC for fiat. Meanwhile, you're talking about BTC becoming the dominant world currency and decentralizing the global economy? I think we're on totally different pages.

And I'm saying centralization of mining is not happening and miners in majority are not dumping BTC for fiat.

Well if the mining profit margins are so narrow, how are they staying in operation without dumping BTC for fiat to cover their costs? They must have endless reserves of cash to hold all that BTC until the price rebounds right?

1. They have millions of dollars from selling mining gears
2. They have millions of dollars from VC investement
3. They have millions of dollars in Bitcoin profit from mining in the early days

So yes they must be burning through quite a lot of cash right now but in the long run they will be fine and they know it. Of course I am not suggesting they are ALL holding 100% of the Bitcoin mined but my guess is they are holding a good majority of them.

Additionally, I don't see a problem for them to cover some costs by selling to fiat during a bear market. You can be certain though that they will not "dump" their BTC during a bull market.

[DaRude]

I think we're confusing few issues here. As someone else has pointed out there WILL BE around 3600btc mined each day, or around $1.2MM at current prices period. And the smaller the margin the more of the mined BTC will HAVE to be sold to cover expenses. Market has to find a price point at which there's enough demand to absorb around 3600 new btc daily regardless who mined those coins.

As far as ASIC manufacturers they're in it for the profit ( shocker i know) at certain point once the risks are more known and protocol is more stable and it's easier to raise capital, it's natural for someone at the board meeting to stand up and ask why are we selling these boxes that can generate $400 at a cost of ($400 - x) And business plan will naturally shift to most profitable stream and go after the biggest part of the $2B industry. The higher the profit margin the more of the pie you'll get. Naturally that will squeeze out your dorm room miners, and will be left with few ASIC manufacturers with their own mega farms (matrix comes to mind).  The cost of new entrants will be too high which would lead to monopolies/conglomerates and all the bad things that come with them, centralization regulations etc...

Hypothetical if BTC goes to $1MM Intel and AMD would probably squeeze KnC and the rest out.

But that's where halfing comes in so hopefully the risk of that will keep the REALLY big guys from entering.

[DaRude]

I'm talking about centralization of mining and this crook Sam Cole milking BTC for fiat. Meanwhile, you're talking about BTC becoming the dominant world currency and decentralizing the global economy? I think we're on totally different pages.

And I'm saying centralization of mining is not happening and miners in majority are not dumping BTC for fiat.

Well if the mining profit margins are so narrow, how are they staying in operation without dumping BTC for fiat to cover their costs? They must have endless reserves of cash to hold all that BTC until the price rebounds right?

1. They have millions of dollars from selling mining gears
2. They have millions of dollars from VC investement
3. They have millions of dollars in Bitcoin profit from mining in the early days

So yes they must be burning through quite a lot of cash right now but in the long run they will be fine and they know it. Of course I am not suggesting they are ALL holding 100% of the Bitcoin mined but my guess is they are holding a good majority of them.

Additionally, I don't see a problem for them to cover some costs by selling to fiat during a bear market. You can be certain though that they will not "dump" their BTC during a bull market.

They're trying to get the largest market share, and as stated their costs are bellow $400. By selling they're raising capital to expand, as long as it's above their costs they're at profit (and get the benefit of squeezing other guys out). It's a win/win sell at (some) profit and guarantee more profit. They're not wall street to play the risk game. Even if they were true believers VCs would force them to sell.

[MrBig]

I'm talking about centralization of mining and this crook Sam Cole milking BTC for fiat. Meanwhile, you're talking about BTC becoming the dominant world currency and decentralizing the global economy? I think we're on totally different pages.

And I'm saying centralization of mining is not happening and miners in majority are not dumping BTC for fiat.

Well if the mining profit margins are so narrow, how are they staying in operation without dumping BTC for fiat to cover their costs? They must have endless reserves of cash to hold all that BTC until the price rebounds right?

1. They have millions of dollars from selling mining gears
2. They have millions of dollars from VC investement
3. They have millions of dollars in Bitcoin profit from mining in the early days

So yes they must be burning through quite a lot of cash right now but in the long run they will be fine and they know it. Of course I am not suggesting they are ALL holding 100% of the Bitcoin mined but my guess is they are holding a good majority of them.

Additionally, I don't see a problem for them to cover some costs by selling to fiat during a bear market. You can be certain though that they will not "dump" their BTC during a bull market.

There's no guarantees that these miners will be fine in the long run. That's why they'd be selling their BTC for fiat trying to expand their hashrate asap and getting a bigger share of the pie and maximize their profit potential. The mining companies who are simply holding their BTC as you say will go the way of the dodo soon.

[brg444]

They're trying to get the largest market share, and as stated their costs are bellow $400. By selling they're raising capital to expand, as long as it's above their costs they're at profit (and get the benefit of squeezing other guys out). It's a win/win sell at (some) profit and guarantee more profit. They're not wall street to play the risk game. Even if they were true believers VCs would force them to sell.

They don't necessarily have to sell to raise capital. As previously stated, all of these major companies have millions from selling mining gears.

They're not wall street to play the risk game. Even if they were true believers VCs would force them to sell.

I'm sorry but this is not true. BitFury, probably the biggest venture backed mining company is not selling ANY of the coins they mine.

[brg444]

There's no guarantees that these miners will be fine in the long run. That's why they'd be selling their BTC for fiat trying to expand their hashrate asap and getting a bigger share of the pie and maximize their profit potential. The mining companies who are simply holding their BTC as you say will go the way of the dodo soon.

Miners are industry insiders at the top of the pyramid. I'm sure they are pretty confident about BTC's future.

BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres.

Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.

"We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price," Vavilov added.

[NotLambchop]

There's no guarantees that these miners will be fine in the long run. That's why they'd be selling their BTC for fiat trying to expand their hashrate asap and getting a bigger share of the pie and maximize their profit potential. The mining companies who are simply holding their BTC as you say will go the way of the dodo soon.

Miners are industry insiders at the top of the pyramid. I'm sure they are pretty confident about BTC's future.

BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres.

Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.

"We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price," Vavilov added.

Lol, a company whose worth is pegged to Bitcoin price is not going to announce "we're dumping these things as fast as we mine them, because don't believe in the future of Bitcoin."

[brg444]

There's no guarantees that these miners will be fine in the long run. That's why they'd be selling their BTC for fiat trying to expand their hashrate asap and getting a bigger share of the pie and maximize their profit potential. The mining companies who are simply holding their BTC as you say will go the way of the dodo soon.

Miners are industry insiders at the top of the pyramid. I'm sure they are pretty confident about BTC's future.

BitFury founder and CEO Valery Vavilov indicated that the new funding will allow the company to complete production of its 28nm ASIC chip without selling the reserve bitcoins it has mined from its three industrial-scale data centres.

Vavilov told CoinDesk that it decided not to tap its bitcoin reserves as it remains bullish on the long-term value of bitcoin.

"We believe in the long-term perspective [the price of bitcoin] will grow and we decided to not to sell [our bitcoin] at such a low price," Vavilov added.

Lol, a company whose worth is pegged to Bitcoin price is not going to announce "we're dumping these things as fast as we mine them, because don't believe in the future of Bitcoin."

They're hoping to be the first publicly traded Bitcoin company in the USA. You really think they "don't believe in the future of Bitcoin".

They are making MILLIONS in profit from the sale of mining rigs to other smaller mining farms. Their BTC mining is an extra curricular activity with little to no impact on their bottom line.

Try again, troll.

[NotLambchop]

...
They're hoping to be the first publicly traded Bitcoin company in the USA. You really think they "don't believe in the future of Bitcoin".
...

brg444, if you were planning to take your company public, would you announce that you don't believe in your own product?  Regardless of how you actually felt?

*And lrn to polite, faggot.

[brg444]

...
They're hoping to be the first publicly traded Bitcoin company in the USA. You really think they "don't believe in the future of Bitcoin".
...

brg444, if you were planning to take your company public, would you announce that you don't believe in your own product?  Regardless of how you actually felt?

*And lrn to polite, faggot.

The burden of proof is on you to demonstrate they don't believe in their product.

So far, every thing indicates they are extremely bullish about it.

Try harder, troll

[NotLambchop]

...
The burden of proof is on you to demonstrate they don't believe in their product.
...

I never made that claim.  You fail at reading just as badly you fail at basic etiquette

[brg444]

...
The burden of proof is on you to demonstrate they don't believe in their product.
...

I never made that claim.  You fail at reading just as badly you fail at basic etiquette

Where did you get the illusion that you deserve respect ?

[NotLambchop]

Stay rude and stupid.

[brg444]

not mad, this is how trolls deserve to be treated, as inferior posters.

stay disingenuous & dishonest

[NotLambchop]

Nah, I can spot butthurt when I see it.
I realize that constant loss of money due to stupidity is hard on you, but it doesn't excuse your abysmal manners

[brg444]

Nah, I can spot butthurt when I see it.
I realize that constant loss of money due to stupidity is hard on you, but it doesn't excuse your abysmal manners

Butthurt?

I'm just having fun here rebutting each and everyone of your childish claims and disingenous arguments 

Carry on, troll

[NotLambchop]

Nah, you're just shitting up a perfectly good thread with your rude faggotry.

[brg444]

Nah, you're just shitting up a perfectly good thread with your rude faggotry.

Thread was perfectly fine until you came along, troll.

[DaRude]

They're trying to get the largest market share, and as stated their costs are bellow $400. By selling they're raising capital to expand, as long as it's above their costs they're at profit (and get the benefit of squeezing other guys out). It's a win/win sell at (some) profit and guarantee more profit. They're not wall street to play the risk game. Even if they were true believers VCs would force them to sell.

They don't necessarily have to sell to raise capital. As previously stated, all of these major companies have millions from selling mining gears.

They're not wall street to play the risk game. Even if they were true believers VCs would force them to sell.

I'm sorry but this is not true. BitFury, probably the biggest venture backed mining company is not selling ANY of the coins they mine.

That's basic business. The bitcoins the ASICs manufacturers are sitting on is considered it's inventory. Company needs liquid cash to pay employees, taxes, cover their costs, and reinvest the remainder into expanding their business model. That would be EXTREMELY risky/suicidal for the CEO of a BIG ASIC company to try and raise more cash from the VCs (at i'm sure very unfavorable terms) instead of a logical thing, like selling your own inventory at profit. That's just not how businesses works. Sure small guys/solo miners in basement can risk it all, be visionaries and hodl until they make it big or run out of money, but not the big guys. Big guys need stability and to minimize their risks, and stick to their business model. What most likely is happening here is BTC are sold to VCs at a certain locked in rate and VCs are holding the burden of BTCs and the price fluctuation (after all risk management is what they do) and ASIC manufacturer can concentrate on their own business model.

VCs are not there to be nice. And because of their terms should be the last choice when raising capital, after your own capital, then loans from banks, then your last stop is VCs. They're not nice guys who give out free money, more like making a deal with the devil.