another interesting Piece Mike! what is your background, were you a financial analyst before getting into the new cool thing called crypto? Specifically concerning these miners, I don't have an opinion because I would need to look into this space. The reason I have not done so (look into the miner space) is because fundamentally I still don't understand the logic behind the business except for the assumption that price appreciation of BTC continues for many years to come. I personally think that is probable, however I would be very hesitant to found a company and take on a lot of debt based purely on that assumption. especially when you consider about 94% of all btc have already been mined and hashing power has already increased exponentially of the last 5 years. you need to believe energy will always be cheap (I agree with that assumption, energy off the grid can be very cheap) and fees will go up a lot (maybe, we will see). So basically if you were to start a mining biz, you need to think you will amortize your debt quickly in the face of declining revenus. Doesn't sound like a good biz plan to me. If ever you wrote an article on why it would make sense to invest in the mining industry in general. I would be interested.
I worked in ad sales as a media analyst. No real financial background whatsoever, I just had to be able to use spreadsheets and/or a calculator to prove ad spend ROI. I think you pretty much nailed it on why mining is a bad investment. I don’t disagree at all and actually have serious doubt about the long term incentive model. Proof of work is a terrific model if anyone can participate but what we have today with ASICs is just a more complex form of proof of stake in my view. Rather that staking coin, validators are staking machines.
another interesting Piece Mike! what is your background, were you a financial analyst before getting into the new cool thing called crypto? Specifically concerning these miners, I don't have an opinion because I would need to look into this space. The reason I have not done so (look into the miner space) is because fundamentally I still don't understand the logic behind the business except for the assumption that price appreciation of BTC continues for many years to come. I personally think that is probable, however I would be very hesitant to found a company and take on a lot of debt based purely on that assumption. especially when you consider about 94% of all btc have already been mined and hashing power has already increased exponentially of the last 5 years. you need to believe energy will always be cheap (I agree with that assumption, energy off the grid can be very cheap) and fees will go up a lot (maybe, we will see). So basically if you were to start a mining biz, you need to think you will amortize your debt quickly in the face of declining revenus. Doesn't sound like a good biz plan to me. If ever you wrote an article on why it would make sense to invest in the mining industry in general. I would be interested.
I worked in ad sales as a media analyst. No real financial background whatsoever, I just had to be able to use spreadsheets and/or a calculator to prove ad spend ROI. I think you pretty much nailed it on why mining is a bad investment. I don’t disagree at all and actually have serious doubt about the long term incentive model. Proof of work is a terrific model if anyone can participate but what we have today with ASICs is just a more complex form of proof of stake in my view. Rather that staking coin, validators are staking machines.
I think this piece predates your subscription, so you probably haven’t seen it. But I think it touches on some points you might find interesting regarding miners: https://faybomb.substack.com/p/kiss-marry-kill-bitcoins-sell-the?utm_source=publication-search
great thanks. I will have a look at your article. I asked your background because you seem to reason like analyst.