The situation in a nutshell
Comments
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Reminds me a bit of the dot.com boom and then bust, but at least some of those websites provided a valuable service.
I’ll admit crypto is not in my wheelhouse, but from the outside it seems like a house of cards with little real world applications.
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I'm still not seeing crypto as being any more useful than as an alternative form of a stock. Wake me up when I can buy my groceries with crypto. The government will never allow that to happen.
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Pretty good Zerohedge discussion on Bitcoin. The Bitcoin supply hasn't been cut in half. What has doubled is the cost to produce NEW Bitcoin which will cut into new production. New production as I posted previously is will end up around $46k per Bitcoin.
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So who makes Bitcoin and how much does it cost them to make it, what's the limit on how much they make and how do they profit? Who holds all the money to pay off all the people holding Bitcoin if they all decide to cash in?
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Bitcoin miners use large scale computer applications to solve algorithmic computer problems. Once the task is complete they receive a Bitcoin from someone.
It's projected that computer and electrical costs to solve a Bitcoin problem will cost $46k. Again someone decides when they will double the cost of producing a Bitcoin to keep supply down.
There is no money just Bitcoins. Just like there is no money mining gold. Just gold that is sold on the open market. If there are more buyers than sellers the price goes up to clear the market. If there are more sellers than buyers the price per Bitcoin goes down.
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The Bitcoin “farms” use an extraordinary amount of electricity. I’m surprised the Gretas haven’t gone that route yet to shut it down. Greenie Globalists must be heavily invested in it. I’d expect EPA regulations in the USA after the upcoming sell off.
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It will be AI versus Bitcoin. China already outlaws Bitcoin mining in China as they don't like Bitcoin and they are power short, not that they give a sh*t about CO2 emissions. The comment that Bitcoin is using green renewable energy is a canard. There is just fungible electricity. As I mentioned there are several Bitcoin mining operations in The Dalles using the local PUDs cheap electrical energy from the Columbia River dams. The miner's use of the renewable hydropower just means someone else isn't.
And how will governments intervene.
Well we have already seen some hints, with claims that crypto-mining is sucking the grid dry, killing the climate, and leaving us all cold and starving (ok some hyperbole offered there, but it's coming). Michael Saylor has an answer for that canard too as he sees some of the heat coming off of Bitcoin when it comes to environmental concerns in the future, if not already.
He argued that as Bitcoin has become increasingly energy-efficient, politicians and environmental lobbyists are starting to shift their attention to AI’s energy demands.
“If you look at AI, a lot of these hyper scalers are looking to scale up 60 gigawatts this year, and they’re wanting to go to 600 gigawatts within a decade, so what’s going to happen is they’re going to inherit all of the energy FUD [fear, uncertainty and doubt] that we used to have.”
“So they will actually throw all their lobbyists at that.”
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Bitcoin mining simply adds more strain to the power grid. People like the guy making that comment must think each farm somehow creates their own energy source out of thin air. It all pollutes the environment by using natural resources like water and mined fuels.
AI isn’t going anywhere. Bitcoin seems to be massively over leveraged unless you’re a multi-billionaire investing in it or a government looking to capture it. Do small investors even have easy ways to use their bitcoin in everyday life?
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If you are in a Bitcoin ETF with a brokerage account, just write a check on you brokerage account. No different than owing a gold ETF/mutual fund or shares of Berkshire Hathaway in your brokerage account.
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But good exists and is accepted to back money globally because it’s accepted as valuable, whether one agrees with it or not.
What is the tangible “value” of a bitcoin? Again, this is not my wheelhouse at all but I’ve lived long enough to see a lot of boom/bust in emerging marketplaces.
