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Comment by mpoteat | Hacker News Reader

Bitmain makes huge margins on selling equipment, not mining. They make shovels in the gold rush.

From what I understand, and, correct me if I'm wrong, but Bitmain _does_ make money by mining, but they do it by using their own next-generation hardware to mine before making it available for sale, which spikes the difficulty and then they sell it off when the profitability drops.

Manufacturing mining ASICs and running your own mining operations seems like it has these big inherent conflicts of interest to me.

which looks like the most efficient way. China will likely make it the State miner initiative in the middle of all those legal changes.

China is a bit less than half of their sales, the rest is global sales, so it will hit them still pretty hard.

Source, their IPO documents: https://techcrunch.com/2018/09/26/bitmain-hong-kong-ipo/

Yeah but if California banned mining in the state during the gold rush, not many shovels or picks would be sold.

I mean, China is not the only place you can mine Bitcoin...

Correct, just as California isn't the only place you could mine gold. But you were making a correlation between Bitmain and the goldrush tool vendors. The goldrush happened for a larger part in California and there is pretty much zero dispute who bitmain/china is in that analogy. Why are you backpedaling?

I'm not backpedaling. You're desperately trying to mold the 1849 Gold Rush analogy onto Bitcoin, which can be mined from anywhere there's electricity...so basically anywhere within range of civilization. This is an absurd argument. Gold is only found within certain mineral deposits. BTC can be mined in Russia, USA, Mexico, Iceland, Britain, or Outer Space.

They are definitely mining. Just announced they are going to be deploying another $80 million worth of equipment [0].

Best part is that they are well known to take an order and payment from a customer and then ship out machines they've been using themselves for the last few months. I've gotten machines from them that were definitely used equipment. They say that they do 'testing' with them first as an excuse.

[0] https://www.coindesk.com/bitmain-bitcoin-mining-farms-antmin...

That isn’t true. They do a lot of mining themselves. Their trouble toward end of 2018 was in part because they had so much bitcoin cash on their balance sheet made from mining on their own rigs.

That's simply not true, they have large mining operations.

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