What happens to miner profitability in 10 years
Quote of the day "We all must make decisions with imperfect knowledge. If you wait until you know everything you will always be too late"
I recently attended the “Surfin Bitcoin” conference in Biarritz. It was a great conference with a lot of cutting edge people. I had the chance to sit next to a miner and we struck up a conversation. He has been in bitcoin since 2011 and had been mining for many years. I learned several things. For one, he was smart and knew the mining landscape well. He loves using small amounts of his hashing power to disrupt altcoin blockchains and extract value from the people behind those blockchains. He confirmed that it is impossible to do this
on bitcoin. The total hash rate on the bitcoin blockchain is way out of the reach of any miner or even mining pool in his opinion. I asked him what he thought would happen to bitcoin blockchain stability after two more halving of the block reward. He had the intellectual honesty to respond immediately that he had no idea. I tend to take seriously people who admit that right away, especially considering he seemed to have decent capital behind him and had been in the business for years. He did however point out that in the current environment, mining fees were between 5-10% of total revenue per block for a miner, and no miner could afford to brush aside the fees. He therefore thinks that the probability of a miner constructing empty blocks is almost zero. Empty blocks was the only real danger he saw from miners.
In any event, everything he said to me confirmed that bitcoin mining is a very competitive business, that miners seek out the cheapest energy in out of the way places and finally that miners will atomize, more and more, i.e small mining rigs in out of the way locations, that are highly mobile.
That is also what Adam Wright of Vespene Energy thinks. Listen to the podcast of Adam, here
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