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Comment by Jasper_ | Hacker News Reader

They haven't been making money for a year or two now -- they can't sell their coins without crashing the market, so they're getting loans with their coins and mining equipment as collateral [0] [1] [2]. Those loans are failing now.

[0] https://www.coindesk.com/business/2022/04/26/bitcoin-miner-c...

[1] https://www.coindesk.com/business/2021/12/31/miner-bitfarms-...

[2] https://www.coindesk.com/business/2022/04/28/battered-bitcoi...

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I had always wondered if mining had been profitable at all, ever, except for the very beginning. I feel like being a late entrant into this required huge fixed costs, and this was back in 2014 or so. Only through joining a huge mining pool or staking pool would the numbers make some sense.

I would guess the profitability would be linked to the cost of electricity. Many counties have subsidised power (1c/kWh), some are naturally cheap (iceland), and some people steal electricity (some weed farms)

Sure you won’t make money if you are lying 35c/kWh, but bitcoin could be seen as a way of exporting abundant renewable electricity from isolated areas.

Bitcoin should be seen as a way of exporting cheap low quality dirty sulfuric coal and massive amounts of CO2 and carcinogens from remote unregulated regions through the atmosphere to the rest of the world.

Heavy industry does the same kind of thing, so it's not just bitcoin.

For example: heavy industry that's located in Mexico instead of U.S for environmental regulation reasons.

At least the heavy industry is fxkcing doing something.

As you already know quite well, heavy industry produces useful products and jobs, and is not a get-rich-quick pyramid scheme.

Take a step back and look at what you're doing: lamely attempting to justify and carry the water for Bitcoin's horrible energy waste and pollution, when you already know quite well what the counterarguments to your ridiculous shilling and apologetic whataboutism arguments are.

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

Your arguments have been thoroughly and widely debunked already, in glorious detail, and claiming you don't have enough time in your busy online shilling and gambling schedule to educate yourself by watching a factually accurate video about reality is a cop-out that shows you're afraid to look at the facts because you know you're wrong.

https://www.youtube.com/watch?v=YQ_xWvX1n9g

Surely you don't actually believe what you're saying, that factories are as useless as bitcoin, and already know why that is an invalid argument, so I should not have to remind you.

Or do you really not give a flying fuck about the environment or public health? Then say so.

I'm bending over backwards trying to give you the benefit of the doubt that you're not that dumb to believe your own argument that heavy industry justifies bitcoin, so if you've simply lost a lot of money gambling on cryptocurrencies and you're just trying to trick other suckers into covering for your unforced mistakes, then just admit it and stop pretending.

> Take a step back and look at what you're doing: lamely attempting to justify and carry the water for Bitcoin's horrible energy waste and pollution

I think I'm not doing that. I'm just part of a conversation and my goal is not to make excuses for Bitcoin. Broadening the view and mentioning other facts doesn't mean that I make excuses for something else. I just don't want to argue pointlessly about this. I'm already in the "ban bitcoin" camp, so anything you try to say to convince me is also time wasted :)

I would advise, do more conversation and less argumentation on the forums

Then why do you think factories are as useless as bitcoin, if you think bitcoin should be banned, and why are you using whataboutism as an argument? Do you also want to ban heavy industry?

You're the one who is throwing whataboutism arguments around. So don't say you don't want to have an argument, after you started with an invalid whataboutism argument and an inconsistent position, in defense of another invalid argument that bitcoin is "a way of exporting abundant renewable electricity from isolated areas".

In case you haven't been paying attention for the past few years, of if you're only pretending to be incredulous, your argument and the argument you're defending are regularly made by bitcoin shills, and always shot down by the facts because they make no sense.

If you'd watch Line Goes Up or read any other comprehensive analysis critical of cryptocurrencies, you'd already know quit well how terribly bad and insincere your whataboutsim argument and the "exporting abundant renewable electricity" arguments you're defending are, and how thoroughly they have already been debunked, and how tired the HN community is of hearing them mindlessly parroted again and again.

You're not the first person to think of using whataboutism to justify bitcoin.

I think two different industries can be corrupt and environmentally damaging at the same time. It's not about picking sides. Maybe use common viewpoint to attack both problems.

You're just very rude in your first reply. That's one thing.

The second thing is that I don't care to argue so much about bitcoin, so I just want to not be in your path, you seem to really be angry about this. That's fine, but I don't want to be in the way. Let me leave thanks.

Heavy industry factories make such toxic waste comparing them to bitcoin is like comparing water to oil. The toxic waste created making credit cards or printing money is very toxic and not something you want to live beside.

Bitcoin uses electric power. So does electric cars, your iphone, lights that businesses leave on overnight. If you are against bitcoin because it uses power.. you really need to lobby for a law that would ban businesses polluting the night sky with lights that aren't needed.

"but bitcoin could be seen as a way of exporting abundant renewable electricity from isolated areas."

The electricity is simply wasted, not exported. It cannot be used to do work anymore.

No, and generating green hydrogen would be far more useful, but the only thing I can contort out of the argument would be it would encourage capital investment in more renewable generation which would then mean the price per kWh would reduce once the cancer of Bitcoin mining ends.

> they can't sell their coins without crashing the market

They should be able to, with the yearly supply of mined coins at just over 1% of the circulating supply.

Most of so called circulating supply is not circulating. 25% are in addresses that have been dormant for more than 5 years. Several percent are locked in "DeFi" or long term contracts. When Bitcoiners say "circulating supply" they really just means "all coins ever mined" and you shouldn't actually use that number for any practical purpose (doesn't stop people from using it for calculating the "market cap")

Non sequitur. The ability to sell without crashing the price depends on whether there is sufficient demand.

Indeed. Remember the first rule of finance: in order for someone to sell an asset at a price, someone else must want to buy that asset at that same price. If you're selling 15,000 BTC, maybe only 200 people want to buy them for $22,000, and 10,000 people want to buy them for $20,000. And the remaining only want to spend $19,000. The market depth (the number of people willing to buy/sell for a given price) on crypto tends to be surprisingly shallow.

Selling off large amounts will push the price down, simply because you're going to run out of people buying for the high price. Then people realize you're dumping coins, and then realize since you need to get rid of them, they can buy for cheaper since you need to unload them, so why spend more? And also the psychological aspects of dumping coins (why are miners dumping unless they thought they would go down).

> mining equipment as collateral

So the same hardware that becomes useless when the btc price falls?

Good for the miners, the equipment and the coins are worthless, worst case, and thr money is gone. The bank will hold the bag so.

If you think the bank is losing out here, I have a bridge to sell you.

Depending on the bank in question that bag will be passed on rather quickly. Doesn't mean a bank cannot be bitten, in 2008 most banks held CDOs only for a short period of time, it was tue volume they held thatvwas the problem for those banks.

I guess it depends if they are custom ASICS or just GPUs. GPUs can be useful elsewhere, custom ASICS not so much.

They're ASICs. GPUs haven't been used for BTC mining in a long time.

But people are always blaming crypto miners for the shortage of GPUs.

ASIC are used for major cryptos like Bitcoin that can justify the design and fabrication costs. For random shitcoins, you need GPUs.

There're cryptocoins other than BTC. Ethereum and Monero are two that are popular and GPU profitable.

Aren't all their prices pretty correlated though? When Bitcoin falls like this, the altcoins do too.

Even if there were a fixed peg between cryptocurrencies, that still wouldn't imply that GPU-mining BTC is just as good as GPU-mining other cryptocurrencies.

>GPUs haven't been used for BTC mining in a long time.

False. For westerners who have to pay market price on electricity that's true, but GPUs have still been used in geographic areas where dirty energy is super cheap of even free for the right connected people (China, Iran, Russia and former Soviet republics, disputed conflict zones in former Yugoslav states, etc.)

That's also where most of the mining is still happening.

GPUs are being used to mine ETH, not BTC. Hashrate by GPU cards on BTC is tiny compared to ASIC. It takes literally 1000x more power and 1000x the cost at the same hashrate.

This is just not true

Other coins are minable with GPUs (because their algorithm was purposely designed to be ASIC resistant)

But bitcoin has been exclusively ASIC mined since probably 2013 at least

Even with free electricity and stolen GPUs you cannot profitably mine bitcoin (you'd get a fraction of a penny a month, less than the cost of simply storing a gpu)

>> Even with free electricity and stolen GPUs you cannot profitably mine bitcoin (you'd get a fraction of a penny a month, less than the cost of simply storing a gpu)

And even if you could mine it profitably, you would be better off mining the worst shitcoin instead, much less a reasonable alternative like ETH or RVN.

No one smart enough to mine BTC is dumb enough to use GPUs for it, regardless of the price of electricity. If electricity is so cheap that there's profit to be made from GPU mining, the profit would be astronomically higher with ASIC mining.

>No one smart enough to mine BTC is dumb enough to use GPUs for it

How much intelligence is required to mine bitcoins?

> That's also where most of the mining is still happening.

Not true. Almost 40% of the hashrate is being generated from the US. https://ccaf.io/cbeci/mining_map

Interesting discussion whether GPUs are used or not. i don't know the answer and obviously many others don't.

So instead of being dependent on central banks, crypto is dependent on inside knowledge held by plain criminals or at least very shady businessmen. That much about the openness and transparency in real life.

> Interesting discussion whether GPUs are used or not. i don't know the answer and obviously many others don't.

The discussion is not interesting. It is well-known GPUs are not used for mining BTC. Mining other cryptocurrency? Sure. BTC? No.

False. If your electricity is free and you can earn $1 mining Bitcoin, or $10 mining Etherium, then you would mine Etherium. You would only mine Bitcoin if you had another reason to want to mint blocks apart from the expected return for minting a Bitcoin. https://whattomine.com/coins?aq_2080Ti=1&a_2080Ti=true (edit: improved wording).

None of what you said is accurate. GPU mining is very popular... just not for BTC. Even at discount/free electricity, it's not worth it given the alternatives of mining ETH, XMR, RVN, etc.

For BTC I think ASICS have been required (to make money) for a long time, and you needed to be able to get them early - buying them and finding that there were other people using newer more efficient chips meant your money was wasted because you would not discover any coins.

Why not sell the coins? The market is big enough. I can't see why someone would mine coins without selling them as they are mined, otherwise you don't realize your profits. When there is enough cheap dollar in the market, there would be someone else who believes the coin price would rise at a later point and buy BTC for profit.

Miners have started to sell. One just sold 1,500 BTC, which was part of what broke the $20k buy wall. [0]

[0] https://www.coindesk.com/business/2022/06/17/bitfarms-looks-...

"boost liquidity" what a wonderful euphemism

If miners sell, it means more money has to enter the system in order to keep the price from falling. And conversely, in the absence of more money entering the system, miners can't sell their bitcoins without crashing the price.

The thing is you have to sell it sooner or later or you won't make a profit. If you sell it to such a price that it's significantly lower than people expect it to be, someone will buy it so they can be sold at a higher price later. It's extremely easy to open both short and long positions on BTC market, so the current price should remain close to its expected price.

Is the collateral denominated as N bitcoin or $N worth of bitcoin?

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