Some Anon Pleb

Our 2.1 MW Bitcoin mining facility is currently shut down, and getting questions on why that is. It has to do with the cyclical Bitcoin mining philosophy I developed since beginning with a single Antminer S-7 in 2016. The best time to make money in Bitcoin mining is when the price is going up faster than the mining machines can be brought online. This capability gap usually lasts for 6-12 months, and is when the most profits are made. The trick is, you have to have miners running to take advantage of it, because it takes about a year to bring a facility online. In 2019, we bought used Antminer S9 and L3+ from brokers for between $50 and $100 each. We caught the Litecoin then the Bitcoin price rise, quickly paid back the purchase price, then kept on mining until 2022 when the profitability finally went negative on those machines. Want to do the same thing on the next cycle, but there is a problem. The problem is that the numbers are not working for me right now. I can fit about 600 S19's at our facility. That's $600,000 of machines. Right now each machine grosses about $7 revenue with $5 electric cost per machine, for a net of $2 per day. That's $36,000 per month net profit. At current conditions of BTC price and hash rate, that is a 17 months payback. But the block reward gets cut in half in 8 months. Everything else being equal, after the halving that's a $2 per miner loss per day. That's right, spend $600k now, and next year lose $36k per month. Unless Bitcoin doubles in price, and hash rate stays the same, in which case it is still $2 per day per machine. If everything else stayed the same, would earn back that initial $600k in profits in 34 months, or 3 years. But hash rate is going to keep going up. If hash rate doubles in the next 3 years, to keep the same $2 per day, Bitcoin needs to 4x in price. If Bitcoin is going to 4x in price, I am better off spending $600k on Bitcoin right now! If the Bitcoin price goes down, in the next 12 months will be able to buy used S19's for less than $200 each. Will be able to fill the facility for $120k, get them paid back in 6 months, and run them at a profit until the next halving. If Bitcoin goes up in price significantly, miner price will go up, will be priced out of buying used machines, but will get a lot of calls from people that will want to buy the facility to plug in their pallets of mining machines. Should be able to sell the facility at a good price. If Bitcoin stays around $30k, the bottom half of the Bitcoin mining facilities from a profit standpoint will run out of reserves after mining at a loss for 6-12 months. Again, will be able to buy used machines for less than $200 each. That's why we're not in a hurry to either fill or sell the facility. Going to wait and let the Bitcoin price and hashrate markets provide the direction.