These companies have been ridiculously lousy investments. Borderline scams, when you look at executive compensation.
the author gives the oil analogy. the oil wells themselves have very similar economics to mining. it's the relationship between these similar operations and the investors which sets them apart more than the activity they're involved in.
How do you figure? Much of the (featured) article is centered around hashrate to bitcoin production ratios over time. Literally one the central features of bitcoin.
are they thought? What's untethered from reality is the understanding of how bitcoin work. Everyone wants to throw in 100$ and wake up to millions in 5 years. That just does not work anymore.
One can model all costs involved when it comes to mining and can make a decision based on cost vs expected profit. Bitcoin (and cryptocurrencies) are not vending machines. The math to model this is harder and there is a lot more uncertainty. Can it be done? Probably. Will we have winners and losers in the mining game? of course.
Economics is a social activity, not an abstract property of an asset or instrument. If the body of people using or interacting with bitcoin are fundamentally misguided about its economic properties, then the economics of bitcoin itself are fundamentally misguided ("unreal").
As I read it, the article's point was this: the economics behind large mining initiatives are bunk (it would be more profitable to simply buy bitcoin at current prices using the same capital). Simultaneously, it is true that bitcoin's mining activity is a supporting factor in its valuation. In other words, bitcoin is doing the economic equivalent of the toothpick trick: two supposedly supporting factors are actually mutually vulnerable to the same outside pressure (the availability of gullible investors, or lack thereof).
It dropped to $25k for like... what feels like a split second and people are still FOMOing into it, running it up to $30k (unless it's some kind of manipulation by whales to trap people's money... who really knows?)