Bitcoin Mining — The New Gold Rush
For the last three weeks JP and I have been researching setting up a Bitcoin mining operation, “Axes & Eggs”. The premise being that in the original gold rush of the 1800s the people who made all the real money where the guys selling pick axes, eggs and other mining supplies. The great thing about business, isn’t about what business is sexist but which one is most profitable. So, at the end of the day with bitcoin mining, the question is “Is it profitable?” This question is affected by two big variables:
1. The value of bitcoin and
2. The cost of electricity to run the mining equipment. Checkout JP’s cost/profitability breakdown here
In the time we’ve been discussing this idea, the price of bitcoin has swung from a low of $1.8k a coin to a high of ~$2.8k. The real question now is “How do we get electricity cost down?” That question gives us pause, as the value and market presence of bitcoin is clearly here to stay. The technology underplaying bitcoin, Blockchain, will only grow in uses and adoption. Hence long term, mining at scale (1k+ units) appears to be a lucrative and sustainable enterprise.
So, you’re probably asking yourself, “WTF is bitcoin mining?” Checkout this video by Anari Sengbe to get more details. In short bitcoin “mining” is a transaction fee. Every time you send bitcoin to another person, you pay a small transaction fee to a “miner”. Mining is done on a first come, first serve basis. So, there is no central bank or mining company. Rather individual miners waiting to settle your transaction and charge a small fee to do so. Brilliant stuff really. Banks fucking hate it! Cause the fees are exponentially cheaper than they would charge and the banks have no way to monopolize mining operations.
In the end, bitcoin mining operations make financial sense. The next step to overcome is the cost per kilowatt hour for electricity. We’re going to go tackle that, as we have some great ideas and ideas so bad, they may be great. In the meantime, if you have a potential idea or question about blockchain, cryptocurrencies, bitcoin, ethereum or owocoin, don’t hesitate to ask.
My name is Samson. This has been a production of Blockchain for Dummies by a Dummy. I’m a human and an anthropologist. Feel free to hit me up on Twitter or Instagram @HustleFundBaby. JP can be contacted at firstname.lastname@example.org
I would say thoughts are my own…but I probably stole them from a woman.