Bitcoin mining is a complex process that involves many moving parts. Miners are already faced with unexpected costs such as capital and operational expenses, product shipping delays, and unexpected regulations that can vary from one country to the next. They also had to deal with Bitcoin’s sudden drop from $69,000 down to $17,000.
Although BTC is now 65% lower than its peak, miners agree to just keep calm and continue stacking sats. However, that doesn’t necessarily mean the market is at its bottom.
Luxor CEO Nick Hansen stated that there will be a capital crunch among publicly-listed companies, or at least not just those listed publicly, in an exclusive panel of Bitcoin miners hosted by Cointelegraph. The cost of ASICs is likely to exceed $4 billion. This capital is not available.
Hansen elaborated on:
Hedge funds explode very quickly. It will take miners 3 to 6 months for them to collapse. We’ll find out who has good operations and can survive in this low-margin environment.
Magdalena Gronowska, PRTI Inc. advisor, said that one of the greatest challenges in the transition to a low carbon economy and reducing GHG emission was the underinvestment by both the public and private sector in technology and infrastructure. The best thing about Bitcoin mining is the fact that it presents a novel way to finance or subsidize the development of energy and waste management infrastructure. This is an alternative to traditional electricity ratepayer or taxpayer pathways. It’s based on a simple system of economic incentives.
Is Bitcoin a threat to the environment?
The panel discussion moved to the environmental impacts of BTC mining, and the widely held belief that Bitcoin’s energy use is a threat for the planet. Joe Burnett, Blockware Solutions analyst said:
“I believe Bitcoin mining is not harmful to the environment. I think it actually incentivizes energy production and grid reliability. I also think it will likely lower retail electricity prices in the long-term.”
Burnett says that “Bitcoin mining offers a bounty to generate cheap energy, which is good news for all of mankind.”
Related: Texas is a Bitcoin hot spot despite heat waves that affect crypto miners
Is industrial Bitcoin mining going to catalyze long-awaited “mass adoption” of crypto?
Hashworks CEO Todd Esse stated that Bitcoin mining dominance and the future of the industry are important issues. He also discussed whether industrial mining will eventually make crypto more mainstream. It all depends on how much they can cut off. This really depends on the availability of power and the price of power.
Although it would be easy to believe that Bitcoin mining and big energy companies will increase their mutual support, Hansen disagreed.
“No, it’s not. But it will be the thing that changes everyone’s lives, regardless of whether they realize it. Being the buyer of last resort and the buyer of first resort when it comes to energy. It will transform the energy market, the energy production and consumption in America. It should also significantly improve the human condition.
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