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$10 Billion is New High for Crypto Mining Revenue

We have just released the Fifth biannual CryptoSuper list of Top 50 mining pools. As of the end of October, when we took a snapshot of the top 6 coins and top 50 pools, the crypto mining production annual run rate had reached a new high of over $9 billion. In the past two and a half weeks, the Bitcoin price has continued to rise significantly. If we were to adjust to today’s Bitcoin price, the gross annual revenue run-rate for the top 6 mined coins would exceed $10 billion.

Bitcoin has reached over $17,000 per coin. If Bitcoin were a company (it is not, no CEO can go before Congress), it would have the 19th (last minute edit: 16th!) largest market capitalization in the world. A single Bitcoin is worth more than 9 ounces of gold and more than 400 barrels of oil. There is some 18.5 million Bitcoin that has already been mined out of the ultimate 21 million. …


There are only two Monetary SoVs Today: Gold and Bitcoin

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This is not investment advice. Bitcoin is highly volatile. Past performance of back-tested models is no assurance of future performance. Only invest what you can afford to lose. You must decide how much of your investment capital you are willing to risk with Bitcoin. No warranties are expressed or implied.

Wealth of a Certain Type

Money is a universal intermediate good used as a form of wealth. People use it as the connector between other goods and services, and as a way to resolve debts. The first well-documented money was accounted for in Babylonian temples in the form of barley. …


Two to three kilograms by end of the decade?

Check out our new platform: https://thecapital.io/

This is not investment advice. Bitcoin is highly volatile. Past performance of back-tested models is no assurance of future performance. Only invest what you can afford to lose. You must decide how much of your investment capital you are willing to risk with Bitcoin. No warranties are expressed or implied.

Bitcoin as Digital Gold

Bitcoin is often referred to as a sort of digital gold. It is a monetary asset, but unlike gold, it is not mined and minted into physical coins or bars. Instead, it is mined by supercomputing farms of specialized cryptographic solver rigs, and imprinted onto a permanent ledger, the time chain (or blockchain). The winning rig for a particular block receives a block reward composed of a subsidy and transaction fees. …


By Stephen Perrenod on The Capital

This is not investment advice. Bitcoin is highly volatile. Past performance of back-tested models is no assurance of future performance. Only invest what you can afford to lose. You must decide how much of your investment capital you are willing to risk with Bitcoin. No warranties are expressed or implied.

Look for Positive Skew: Taleb

In his “Bleed or Blowup” article for the Journal of Behavioral Finance, Nicholas Nassim Taleb notes that many investors seem to prefer repeated small positive payouts but thereby assume the risk of large negative drawdowns or blowups. One should seek positive convexity, positive skew instead, to maximize long-term returns. …


By Stephen Perrenod on The Capital

“Antifragility is beyond resilience or robustness. The resilient resists shocks and stays the same; the antifragile gets better.” — Nassim Nicholas Taleb

Bitcoin Improves as it Faces Uncertainty

This article is inspired by Nassim Nicholas Taleb’s Antifragile: Things that Gain from Disorder. The term that he created, Antifragile, means beyond resiliency, beyond robustness. It conveys something that improves in response to shocks and errors, as happens in the evolution of living organisms with errors and mutations. The most adaptable survive and prosper. This also happens for humans individually when they exercise; moderate stresses on the body confer benefits overall. …


Bitcoin is on a Block calendar

Witness at crums.io: 0515d51a66480ff94b4bb274e1214e5419c3181af7d970b39ee66f096b7022ce

“The portion of the integral calculus, which properly belongs to any portion of the differential calculus, increases its power a hundred-fold” — Augustus De Morgan

(This is not investment advice. Bitcoin is highly volatile, as demonstrated below.)

Abstract

In a previous article, I introduced the Future Supply model, using quarterly data (https://link.medium.com/bvWOCqrXr6 ) spanning nine and a half Block years of data on quarterly intervals. For this article I have refined the analysis by using a full ten Block years of data on Block monthly intervals (of 4375 blocks each). …


By Stephen Perrenod on The Capital

This is not investment advice. Bitcoin and other cryptocurrencies are a new and highly volatile asset class. Consult your investment advisor; do your own due diligence.

To Mine or to just Buy and HODL?

I recently took a look at a long-term Bitcoin mining contract based on state of the art hardware, with all costs including electricity and systems management bundled. Fortunately, I have been tracking the top mining pools and difficulty and hashrate trends over the past few years, as well as energy consumption in the industry. I also have some personal experience in purchasing cloud mining contracts.

A prior article covers the production of the largest proof-of-work crypto mining pools as of late last year: https://link.medium.com/5LXTFKkg85. And this article, https://link.medium.com/9tK14mog85 looks at energy usage in Bitcoin mining. And in this article https://medium.com/the-capital/modeling-bitcoin-value-three-methods-fb4093b2de71, I noted that over the prior six years the mining difficulty was growing more steeply than the 10th power of the Block height (Block years of 52,500 blocks, a little less than a calendar year, were used in the analysis). …


By Stephen Perrenod on The Capital

Since Libra’s introduction in 2019, I have written five articles here on Medium about Libra (1.0), and how it compares to Bitcoin and CBDCs:

https://link.medium.com/8vlOVpvEP5 — Libra: Corporate Money in furtherance of surveillance capitalism

https://link.medium.com/YjjVPuyEP5 — Libra, Facebook’s Corporate Money

https://link.medium.com/shyvpMAEP5 — Libra Leverage

https://link.medium.com/z69uvkbIP5 — Bitcoin Crosses the Chasm: Libra pushes it over

https://link.medium.com/QZHIzciIP5 — Currency Wars: Libra accelerates the Battle of the Central Banks

Now the Libra Association led by Facebook, has rolled out its second version of its white paper. https://libra.org/en-US/white-paper/#an-open-and-competitive-network

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Statue of Justice, Old Bailey, CC BY 2.0 Charles D. P. Miller

Corporate Stablecoin

Libra is corporate money, just as fiat is government money, and Bitcoin is private money, and it is in the stablecoin category. The stated focus for the Libra Association and Libra cryptocurrency is on making efficient payments available widely, at low cost, including to the billions of people who are unbanked and underbanked. …


Standard cosmological models assume an isotropic and homogeneous universe. This means one with bulk cosmological properties the same in all directions.

The homogeneity can only be true on the largest scales, since obviously we have planets, galaxies, and groups of galaxies, and clusters of galaxies that all exhibit much higher density at discrete locations. But rich clusters of galaxies of around 1000 members are the largest gravitationally bound structures and they are rather compact compared to the 94 billion light-year diameter of the universe within our horizon.

So are they uniformly distributed overall?

CMB isotropy

Both homogeneity and isotropy are clearly observed in the cosmic microwave background, down to the level of only a part per hundred thousand variation (18 microKelvins for a 2.73 Kelvins average) in the cosmic microwave background (CMB) temperature from one location to another. …


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A Non-Divergent, Long-term, Residual Supply-driven Bitcoin Forecast

Abstract

I introduce a two-parameter, convergent, residual supply-driven Bitcoin long-term forecasting model that is an alternative to PlanB’s popular but mathematically divergent two-parameter scarcity-driven Stock-to-Flow model. Over a 50-year time span, the models differ by 12 orders of magnitude in their Bitcoin price forecast. The Future Supply model is a linear correlation of the log of market capitalization with the remaining Bitcoin supply yet to be produced (future supply) at any epoch.

The mathematical form of the model is inherently convergent, whereas the Stock-to-Flow model is a power law of an exponential (since stock-to-flow is exponential in block height), and thus is inherently divergent.

About

Stephen Perrenod

supercomputing expert, astrophysicist, cryptocurrency analyst, orionx.net, author of DarkMatter, DarkEnergy, DarkGravity

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