That just adds to costs, profitability would go somewhere other than mining, like to the datacenter owners that service the increased demand or hold co's that lease out mining equipment
If the subsidy drops to 10 million sats today so many institutional miners will go bust due to their reliance on that subsidy to pay op ex.
Yes and that would be a good thing, when they ultimately have to liquidate their equipment it decentralizes it closer to people who'd do it for other reasons rather than pure arbitrage
On a fiat standard sure but is it crazy to think electricity priced in sats (that should go down per kilowatt/hr) can’t make mining purely profitable from a sat flow perspective?
Same economics apply, whatever the profitability is denominated in gets arbed.
I think mining could end up being a lucrative business
Picks and shovels, the purely arb-based system institutional mining is based on is unsustainable over time. I think AI is already showing some ways its more adjacent to other businesses like storage and datacenters, but those also highlight how it can be unprofitable in and of itself while offsetting other costs that incentivizes operation.
Waste heat as offsetting heating cost is just one example of how mining at a loss can still be better than not mining at all. Datacenters and energy producers may use it to offset under-load during off-peak times, the security use-case, off-setting depreciation, and so on.
That just adds to costs, profitability would go somewhere other than mining, like to the datacenter owners that service the increased demand or hold co's that lease out mining equipment
Yes and that would be a good thing, when they ultimately have to liquidate their equipment it decentralizes it closer to people who'd do it for other reasons rather than pure arbitrage
Same economics apply, whatever the profitability is denominated in gets arbed.
Picks and shovels, the purely arb-based system institutional mining is based on is unsustainable over time. I think AI is already showing some ways its more adjacent to other businesses like storage and datacenters, but those also highlight how it can be unprofitable in and of itself while offsetting other costs that incentivizes operation.
Waste heat as offsetting heating cost is just one example of how mining at a loss can still be better than not mining at all. Datacenters and energy producers may use it to offset under-load during off-peak times, the security use-case, off-setting depreciation, and so on.