There is very little investment that could negatively impact infrastructure style with a bullish trend towards venture capital. This can be achieved by combining energy balancing with a Bitcoin (BTC) budget accumulation. This is why we are seeing an influx of companies that are pouring into Bitcoin mining and starting to build giant factories.
Securing Next Generation Devices
At its peak in 2018, Bitmain was able to produce over 95,000 platforms per week. However, since then, production has declined, in part as a result of ongoing litigation. On the other hand, MicroBT will introduce 1.3 million machines this year, adding 25,000 pallets per week.
The West only gets limited shares of these new machines, and with 17 listed mining companies funding ASICs and major syndicated websites announcing weekly purchases, you can see this new stock of equipment dwindling rapidly. Building relationships with manufacturers is now essential to ensure widespread adoption of new machines. How did you get on this waiting list? Take a large checkbook.
Economies of scale are in contrast to decentralization. However, as with most other industries, the mining area matches the size. Large miners get discounts on ASIC prices. With an average payback period for new generation equipment of about 300 days, the discount can reduce it by more than a month. Senior miners also have to pay a lower down payment, in some cases around 20% versus over 50% for retail. This allows miners to get more machines and build faster.
In terms of infrastructure, in most cases a 30 MW farm can be built at a much lower cost per megawatt than a 3 MW power plant.
Increase operating profit
If you need cheap energy, you will need a lot of capital for things like buying land, building large infrastructure, purchasing generators and other equipment, financing warranties, etc. While there are miners who make money from small, cheap energy sources. in general, they are the most profitable miners, the big ones. They can invest the capital they need to protect the best sites. As we know, the cost of electricity is an important success factor.
In addition to offering cheap energy, older miners can negotiate lower fees, firmware development fees, and ASIC software development fees. They can reduce the amount of work required by one megawatt, improve their processing efficiency and improve energy efficiency.
Relatives: Profitability of mining cryptocurrency in 2020: is it possible?
Access to excellent funding mechanisms
Mining is a capital intensive business. Regular hardware upgrades and new purchases are required. A 10MW farm with next generation equipment can cost nearly $ 10 trillion, depending on the purchase price.
Access to various forms of finance such as debt capital, equity, equipment financing, and ASIC financing is critical for mining to be large and enjoying the benefits described above.
From 2018 to 2019, most of these mining operations were financed through a combination of conventional debt and equity. In 2020, we are seeing an explosive growth in ASIC funding. Large and reputable mines can now collect money from financiers, and the acquired ASICs are used as collateral. The number of such financiers is still limited, so they prefer better and less risky operators to lend them money.
Manufacturers bet a draw
One of the first questions that question boards ask when there is a chance of breaking is about equipment: “Where is the equipment? Who is the manufacturer? Is there a guarantee? What’s the price? Why does the price change every day? When are the cars dispatched? ”
Manufacturers like Bitmian are the pioneers of mining in the Wild West. In 2016, an arms race began to find out who would get the most vehicles on the market. This left the company with instructions, delivery details, prices, warranties, viable repair centers, and transparency.
When companies entered the industry, the manufacturer’s mindset first began to change. Manufacturers now have to arrange weekly negotiations with large customers, discuss manufacturing transparency and ensure more transparency in operations. Most manufacturers now offer car warranties, have opened repair centers and are trying to be more transparent in terms of delivery and prices, although this is still a long way off.
This professional trend is likely to continue with MicroBT, Bitmain, and everyone else who wants to compete in the West.
Mining is in line
“How do we get paid already?” This is another typical question the foundation will ask. The answer is through mining. Mining is retail buyers. Therefore, questions arise about who this counterparty is and what is the risk associated with its participation.