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Crypto crash?

How to buy, profit and invest in crypto currencies or NFTs
Mike4
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Re: Crypto crash?

#508393

Postby Mike4 » June 19th, 2022, 11:48 pm

BungeeJumper wrote:I don't suppose anybody really knows, because this is uncharted territory. But if it's true that it currently costs $35,000 to mine a bitcoin, then the logical thing for a miner to do at $18,000 is to stop mining, no? What happens after that?

BJ


Hornblower wrote:That depends on the miners conviction about the future value of bitcoin. They may choose to continue mining even at a loss.


Why would they do that? I don't understand. Why would anyone continue mining them at a cost of $35k when they can buy them already mined for $18k?

XFool
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Re: Crypto crash?

#508395

Postby XFool » June 20th, 2022, 12:11 am

GrahamPlatt wrote:
XFool wrote:
GrahamPlatt wrote:
XFool wrote:If I need to do that, assuming I am not a drug dealer, international terrorist, or money launderer, what is stopping me doing so right now?

Have you tried dealing in Roubles recently?

No. Why would I want to?

Don’t be obtuse. If you did want to, you’d be hampered, by politics.

I insist: Right now - in particular - why would I want to deal in Roubles? I certainly do not need to.

Sounds to me as if Cryptos are a 'solution' still looking for a problem, as far as most people are concerned. Perhaps they are more about political ideology than money or finance?

Hornblower
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Re: Crypto crash?

#508408

Postby Hornblower » June 20th, 2022, 8:01 am

Mike4 wrote:
BungeeJumper wrote:I don't suppose anybody really knows, because this is uncharted territory. But if it's true that it currently costs $35,000 to mine a bitcoin, then the logical thing for a miner to do at $18,000 is to stop mining, no? What happens after that?

BJ


Hornblower wrote:That depends on the miners conviction about the future value of bitcoin. They may choose to continue mining even at a loss.


Why would they do that? I don't understand. Why would anyone continue mining them at a cost of $35k when they can buy them already mined for $18k?



They observably DO keep mining though. Perhaps it's the sunk costs + a conviction that the price will bounce? In prolonged downturns, you'll see total hash rate start declining as miners with higher power prices switch off.

H

Hornblower
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Re: Crypto crash?

#508410

Postby Hornblower » June 20th, 2022, 8:07 am

XFool wrote:
GrahamPlatt wrote:
XFool wrote:
GrahamPlatt wrote:
XFool wrote:If I need to do that, assuming I am not a drug dealer, international terrorist, or money launderer, what is stopping me doing so right now?

Have you tried dealing in Roubles recently?

No. Why would I want to?

Don’t be obtuse. If you did want to, you’d be hampered, by politics.

I insist: Right now - in particular - why would I want to deal in Roubles? I certainly do not need to.

Sounds to me as if Cryptos are a 'solution' still looking for a problem, as far as most people are concerned. Perhaps they are more about political ideology than money or finance?



Perhaps you're simply speaking from a place of extreme financial privilege. If you think the money isn't broken, then of course you'll not understand a need to fix it. Just like insiders saw no need to separate church & state a few hundred years ago.


H

Mike4
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Re: Crypto crash?

#508415

Postby Mike4 » June 20th, 2022, 8:57 am

Hornblower wrote:
Mike4 wrote:
BungeeJumper wrote:I don't suppose anybody really knows, because this is uncharted territory. But if it's true that it currently costs $35,000 to mine a bitcoin, then the logical thing for a miner to do at $18,000 is to stop mining, no? What happens after that?

BJ


Hornblower wrote:That depends on the miners conviction about the future value of bitcoin. They may choose to continue mining even at a loss.


Why would they do that? I don't understand. Why would anyone continue mining them at a cost of $35k when they can buy them already mined for $18k?



They observably DO keep mining though. Perhaps it's the sunk costs + a conviction that the price will bounce? In prolonged downturns, you'll see total hash rate start declining as miners with higher power prices switch off.

H


I wasn't arguing that they don't, I was trying to understand why they DO.

There must be some really solid reason to, otherwise they wouldn't. But what is it?

Could it be that buying bitcoins still makes no sense because those who are continuing to mine are actually not shelling out $35k on each?

Perhaps they are getting their power at low or zero marginal cost from solar (or stealing it)? That would make more sense.

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Re: Crypto crash?

#508420

Postby JohnB » June 20th, 2022, 9:43 am

We argue that investors don't have a rational reason to buy bitcoin, so why expect the miners to be different? Consider farmers. They will sell milk below the cost of production, but above the retail cost, because their fixed costs are hard, cows need to be milked or slaughtered, and when slaughtered it takes time to rebuild a herd, and because its *just what a dairy farmer does*.
Bitcoin miners have similar issues, except wholesale and retail cost is much closer, but I suspect they are similarly irrational about turning the servers off.

Hornblower
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Re: Crypto crash?

#508453

Postby Hornblower » June 20th, 2022, 12:04 pm

Mike4 wrote:
Hornblower wrote:
Mike4 wrote:
BungeeJumper wrote:I don't suppose anybody really knows, because this is uncharted territory. But if it's true that it currently costs $35,000 to mine a bitcoin, then the logical thing for a miner to do at $18,000 is to stop mining, no? What happens after that?

BJ


Hornblower wrote:That depends on the miners conviction about the future value of bitcoin. They may choose to continue mining even at a loss.


Why would they do that? I don't understand. Why would anyone continue mining them at a cost of $35k when they can buy them already mined for $18k?



They observably DO keep mining though. Perhaps it's the sunk costs + a conviction that the price will bounce? In prolonged downturns, you'll see total hash rate start declining as miners with higher power prices switch off.

H


I wasn't arguing that they don't, I was trying to understand why they DO.

There must be some really solid reason to, otherwise they wouldn't. But what is it?

Could it be that buying bitcoins still makes no sense because those who are continuing to mine are actually not shelling out $35k on each?

Perhaps they are getting their power at low or zero marginal cost from solar (or stealing it)? That would make more sense.



Some are getting power at really low rates in ex-soviet countries, others are using things like the methane flare-gas from US oil-fields. Previously this was stranded energy and simply vented to the atmosphere, now they put miners on site & utilise the energy, this will be waaaay below market rates.

+ I suppose they have already invested in the equipment, so there's a lot of sunk costs.


H

GoSeigen
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Re: Crypto crash?

#508529

Postby GoSeigen » June 20th, 2022, 9:05 pm

Why does H remind me so much of JimSusan? I expect when Crypto is gone he will be too, just like JimSusan.


When the entire world revolves around your own clever little plan...

:-|

GS

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Re: Crypto crash?

#508598

Postby bungeejumper » June 21st, 2022, 9:00 am

GoSeigen wrote:Why does H remind me so much of JimSusan? I expect when Crypto is gone he will be too, just like JimSusan.

Ah, but dear old JimSusan had the knack of tempering his Lloyds fixation by telling us all those extended stories about life, human relationships and philosophy. All permeated with a humility that's fairly rare these days.

There isn't quite so much much room for those qualities when your preferred asset exists solely in cyberspace, doesn't have any fundamental value at all, and where you don't know who's producing it (or where), or who's regulating it, or who's playing games with the market, and why. And where your best response to a call for clarity is to say "cry harder". :|

But the last panicky five days have been instructive. For some reason, I'm reminded of Buffett's old line about how when the tide goes out, you find out who's been swimming naked. ;)

BJ

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Re: Crypto crash?

#508611

Postby GoSeigen » June 21st, 2022, 9:24 am

bungeejumper wrote:
GoSeigen wrote:Why does H remind me so much of JimSusan? I expect when Crypto is gone he will be too, just like JimSusan.

Ah, but dear old JimSusan had the knack of tempering his Lloyds fixation by telling us all those extended stories about life, human relationships and philosophy. All permeated with a humility that's fairly rare these days.


Aye, that's true, the Ercol armchairs :-) I believe he was a Yorkshireman...

GS

bruncher
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Re: Crypto crash?

#508935

Postby bruncher » June 23rd, 2022, 1:29 am

I caught part of a documentary on Aljazeera News Channel. There's a bitcoin mining company in Pennsylvania that uses coal to generate electricity. The coal they use is low grade waste scooped up from abandoned mines. The waste is more polluting to burn than regular coal, but they have managed to get a subsidy from the state because they have argued successfully that they are involved in environmental clean-up of the old mine works.

The whole thing seemed Faustian (bad alchemy for the industrial age) and I don't think I would be sorry to see this entire bitcoin crypto enterprise go to hell.

Urbandreamer
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Re: Crypto crash?

#508946

Postby Urbandreamer » June 23rd, 2022, 7:32 am

bruncher wrote:I caught part of a documentary on Aljazeera News Channel. There's a bitcoin mining company in Pennsylvania that uses coal to generate electricity. The coal they use is low grade waste scooped up from abandoned mines. The waste is more polluting to burn than regular coal, but they have managed to get a subsidy from the state because they have argued successfully that they are involved in environmental clean-up of the old mine works.

The whole thing seemed Faustian (bad alchemy for the industrial age) and I don't think I would be sorry to see this entire bitcoin crypto enterprise go to hell.


You mean that the coal waste should be allowed to spontaneously combust without any treatment of the combustion products or that any toxins in it be washed into the ground water? The waste of generations past doesn't just vanish.

It's difficult to read your final statement any other way. After all, were it economic to use that waste for other purposes, it would already have happened.
It might have been good of you to provide some links to what is happening, but I suppose you can leave that to Bitcoiners, who know about both coal, oil and waste gas being treated and used to mine bitcoin to use google for you.
Here is a Reuters article about Stronghold mining.

https://www.reuters.com/business/enviro ... 022-03-21/

Oh and here is what brucher apparently is in favor of. I'm sure his post must mean other than it read.

https://en.wikipedia.org/wiki/Coal_refuse

Lest we think that this is just a US issue can I mention such places as the Wigan alps and Aberfan. To save people the effort of following links or using a search engine, the first is a set of huge coal waste heaps and the second the site where a Junior school and its human contents were destroyed by one.

bruncher
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Re: Crypto crash?

#509014

Postby bruncher » June 23rd, 2022, 11:33 am

It should be possible to argue that I am misinformed, and that the bitcoin miners are doing useful things environmentally. without suggesting that I want children to die in avalanches of slag heaps.


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