The latest episode of the Hashr8 Podcast features three guests very well known in the community — Matt D’Souza, CEO of Blockware Solutions, Christopher Bendiksen, Head of Research of CoinShares and Wolfie Zhao, Asia Editor at CoinDesk.
This is a wide ranging discussion on the state of Bitcoin mining both now and what’s to come in the next 6–12 months.
The content is rather dense with valuable information, and as such it doesn’t lend itself well to brief excerpts. However here are a few of highly-informative moments from the episode:
“Christopher Bendiksen: [18:17]: I also think Matt touches on a really important point here when he says that the supply doesn’t hit the market evenly, and that is exactly what we saw on March 12th when every single Bitcoin-collateralized loan got blown up at the same time and all of a sudden all that supply which has kind of been pent up. So for audiences who may not know how this works: so if you’re a miner, say that you post 100 Bitcoin as collateral at $10,000, that works out to be a million dollars, so if you post a 100 Bitcoin worth a million dollars to these lenders you can borrow, call it, $6 million in cash or stablecoin, immediately, and so long as the value of that collateral doesn’t fall below 100%, ever, you don’t get liquidated and you pay back your cash later or you let the loan roll over. …
The next 5 years are critical and the next 12 years are defining.
Everything hangs on the next 4 and a half years, or more specifically, the next two halvings. Within 12 years, we will know if Bitcoin is a failed experiment or a thriving parallel economy ecosystem. There is no real in-between.
Originally, Bitcoin was designed as a carefully balanced incentive system between three groups of people:
Users provide two wildly different use cases:
Store of Value (SOV) — or HODLers. Users who believe in the long term value proposition compared to traditional investment vehicles, or even dislike the fiat currency supply growth and/or price inflation.
Medium of Exchange (MOE) — or people who transact in Bitcoin. This could be many individual use cases, ranging from product purchase to exchange speculation. …
This article attempts to translate my understanding of the macroeconomics of cryptoasset mining into a deductive, simple, but quantifiable model with clear feedback loops.
There is currently no united framework, which could describe the economics of cryptoasset mining. Mining economics can get hard to conceptualize due to hidden variables, which become backbreaking if ignored.
I believe there are four main variables in play, which influence each other in a direct, circular fashion. There are indirect or weaker interactions between the variables in on-circular fashion, which we can explore later, however, the base model is sufficient without their consideration.
BlockTower has recently announced an analyst contest, announcing that they will be giving out 3.5 BTC to top three investment theses they receive. They will also interview some of the contestants as they’re looking to expand their team.
There is only one issue with the contest — it’s limited to US citizens, due to regulation bullshit.
We’ve had quite enough of that lately, so I decided to have some fun with the contest instead.
Investment Thesis Summary
Almost a month ago, we published a guide to installing and running an Edgeware full node on their testnet.
Since 100Towers will be participating in the Edgeware lockdrop, we decided to make a guide on how to join us.
As a quick refresher — Edgeware (EDG) is a smart-contract WASM based platform in the Polkadot ecosystem. A lockdrop is a modification of an airdrop, where users are be able to lock their Ethereum for a predetermined time (3 months, 6 months, 1 year) and based upon the amount and lockup time they receive EDG tokens. …
The company fullnodeTECH (rebranded to 100Towers), which I’m working with, will be publishing educative and guidance articles in an effort to popularize new experimental blockchain protocols.
One of the first official victims of our testing is Edgeware.
The testing was done based on a request by ZeePrime Capital to run a full node for them.
Edgeware (EDG) is a smart-contract WASM based platform in the Polkadot ecosystem. The participants in the Edgeware network will be able to vote and finance each other to change and upgrade it. The founders will give away 90% of the network to the direct participants upon the launch of the main-net. This will be in the form of a lockdrop, a modification of an airdrop, where users will be able to lock their Ethereum for a predetermined time (3 months, 6 months, 1 year) and based upon the amount and time they will receive EDG tokens. …
The bull market of 2017 and the subsequent gold rush in mining hardware has created a surplus of equipment, which has become unaffordable to run for many prospective speculators/investors/miners.
This has in turn led to some notable outcomes:
I mostly see 51% attacks and double-spending attacks as interchangeable terms, because they usually describe the same thing. In reality, a 51% attack is only a subset of possible double spend attacks. Despite this, I will continue to refer to double spend and 51% attack as interchangeable terms throughout the article. …
VeriBlock (VBK) has made waves not only within the altcoin speculator / investor communities — it has also made waves within the Bitcoin community through its specific use case for the Bitcoin block space and OP_RETURN functionality.
So far we have not seen many deep analyses of the implications the new cryptocurrency poses.
The 2017 surge within the crypto asset scene facilitated major growth in the hardware infrastructure behind the projects that have their own Proof of Work blockchains. The subsequent price drop in 2018 weakened the networks, as it stopped being economically viable to secure them using own hardware.
This has caused several…
Let’s take a step back from the articles I’ve written previously about Litecoin, Bitcoin and DASH. As an ongoing effort to educate both the readers and myself, you’ll have to forgive the ongoing and iterative process of writing these ramblings.
The feedback I’ve received so far has been two-pronged:
I dove directly into talking about hashrate without even mentioning what it is. In retrospect, expecting the reader to be an expert in Proof of Work (POW) was a mistake.
Let’s remedy this. I’m an engineer, not a mathematician, so apologies if I butcher anything by simplifying. …
In my last article about the current situation in the miner market, we took a deep dive into the correlation between hashrate and price. We compared the current market conditions to the situation in 2014/2015. We also speculated on where Litecoin and Bitcoin will be in 2019 and beyond.
In the second part, we will discuss DASH. In the third part, we will cover Ethereum (ETH).
We will skip Bitcoin Cash (BCH) for two reasons: first, due to the shared algorithm with Bitcoin, which was addressed in the previous part. …