
Cryptocurrency Collapse - yarapavan
https://blog.dshr.org/2018/11/cryptocurrency-collapse.html
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yarapavan
The price peak was December 2017 — but the hash rate was six times that by
August 2018, at one-third of the price.

Mining 1 BTC cost way less than 1 BTC during the bubble. So, to compete,
miners built out big.

The hash rate changes approximately every two weeks. But capital expenditure —
building and deploying single-purpose mining hardware — has a rather longer
lead time.

The price just crashed, and the hash rate is now dropping off sharply. So
everyone’s getting squeezed — the cost of mining 1 BTC is circling 1 BTC, like
it was in the doldrums of 2014-2015.

F2Pool founder Mao Shixing estimates 600,000 Bitcoin mining machines shut down
in the last two weeks — mostly older, less efficient machines. ... The
interview with Mao Shixing gives us numbers for how cheap Chinese power
actually is. Summer prices are around 2.9 cents per kilowatt-hour. We’re
coming into winter, and it’s more like 4.3 c/kWh.

The current worldwide hash rate is 45×1018 hashes per second. If everyone is
running an Ebang E-10 (which they’re not — most mining is less efficient), at
0.092 joules per gigahash — then in summer, that’s about $2750 a bitcoin for
the electricity alone.

Around now, it’s getting to … around $4000 to mine a bitcoin.

~~~
bethly
It's fun to watch a market that's actually nearly perfect: no barriers to
entry or regulation to capture means that lead time is about the only source
of surplus and profit consistently trends to zero.

~~~
nostrademons
Would be nice if that applied to general computing. Margins on AWS are ~90%;
that's pure rent that Amazon is capturing because they're the market leader in
a small oligopoly.

There are startups like Golem [1] that are working on tackling this market,
but it seems like they're starting with a small set of verticals, none of
which are applicable to anything I need.

[1] [https://golem.network/](https://golem.network/)

