Bitcoin’s Halving: What It Means for Miners and Investors – 250

Crypto minor Reckoning is upon us no Fate but what we make it this is an Opinion piece from coindesk they say as Bitcoin ages into its teens it's time to Move Beyond tribalism so we can work Collectively with legislators and Innovate business models of the future Rights Samir tabar a bit digital Remember the days when Bitcoin mining Difficulty was still in the single digit Billions there were almost as many Bitcoins to be mined as there were in Circulation and you could run a Massively profitable Opera operation With a rig off of the Shelf Graphics Processing units and civilian power Outlet without so much as a yawn from Regulators yeah those days feel like Ancient history even though they were Less than a decade ago now this is a Thing that like I think we've everybody In the GPU mining industry has talked About for a long time And whether it's because you are a GPU Miner that feels kind of left out in the Cold that has supported all of these Networks up to this point or you're Genuinely concerned about the Decentralization and the ability to Actually have a robust network is kind Of moot because what we've shifted into At the end of the day is Hash rate Wars Between countries as we've just seen Demonstrated does that mean things can't

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Change well no things can always change We do have basically companies that are Coming out more competition within the Asic markets that is resulting in wider Availability of mining equipment that is Specialized to the general consumer and These are the types of things that we Need to support and look at because at The end of the day I think the ship has Definitely sailed on bitcoin as being Ever minable by a CPU or a GPU again and I do not see the same same basically Principles and fundamentals that Bitcoin Has of any around any other Cryptocurrency project primarily because All other projects have the one single Problem that is unsurmountable in my Humble opinion which is the people Problem right every other project has Developers that are still active that Obviously Bitcoin has developers that Are active but creators that are still Active they have a financial skin in the Game with early wallets still having Access to them and a lot of these moving Around it's very hard to trust new coins That are building up maybe something Comes in the future but as it sits right Now Bitcoin is very unique in that Manner so I don't believe that the Argument of for example we just need to Pick a GPU minable coin and prop that up Or a CPU minable coin and prop that up To be sufficient when we're talking

About basically hash rate Wars happening At a a larger level right at a Government level I think once we start Talking about that then we need to start Talking about Distributing distribution of hash rate And the ability for the general consumer To have access to essentially Specialized Hardware we're going to talk About that too today because we also Have of course the Jack Dorsey purchase Here of the Intel mining chips which is Really going in this direction Everything is harder about Bitcoin Mining today from overhead cost to Competition to looming scrutiny of Lawmakers in ire of climate activists But there are still good days ahead if The industry revolutionizing Finance can Adapt to a new environment these days Calls for different kind of Bitcoin Mining business and different kind of Business leader everyone in the industry Has a handful of months to decide if They're up for the challenges of binding In a very different reality and we all Have the role in future proofing Bitcoin Mining I mean a lot of this actually Also comes down to the fact that like Where this plays out I think on the the Front lines in the United States is Going to be proving out the fact that Bitcoin mining is the largest industry When it comes to utilizing renewable

Energy and utilizing that to say hey Look here's what Bitcoin mining can do Bitcoin mining at a large level can help Support energy companies in basically Generating Well energy in renewable Fashions right And this is what we see with anything From flare gas which the wef was talking About check that video out if you're Interested to you know helping snag lost Power from wind generation there's lots Of ways that this can be approached and So I think we'll see a lot of that I Think you'll see a lot more lobbying Pushed in that form in fashion but the Second side to this which is going to be Extremely important is going to be Location location And I think you'll see large companies Looking for favorable geographical Locations for cryptocurrency mining Specifically as it pertains to bitcoin And countries need to be essentially Friendly to this if those countries want To reap the rewards of those financial Benefits that come along with it Otherwise I think you'll see countries That are left behind and humbly stating Here at the end of the day what I think You'll end up seeing is countries that Used to be formally First World Countries dissolve into third world Countries as they refuse to move into The financial transformation and put a

Negative spin on cryptocurrency in General and that is something that I do Fear could be a really large driver in The economic success of individual Countries moving forward and as somebody That's participating within Bitcoin Mining it's also important that you pay Attention to this just mining in the United States when there could be a more Favorable location to move to may not be The best business decision for you to Make but then you also have to take into Consideration at what point do you make That a fundable fundamental principle Decision versus what's best for your Pocketbook and things get really Interesting things that are going to Change this of course coming up is the Happening is an endogenous challenge Having will cut the amount of Bitcoin That can be mined from roughly 900 per Day to 450 per day making the asset even Scarcer while providing a deflationary Measure to bolster it as a store of Value Bitcoin investors own Bitcoin Because they believe it will rise in Value and next year's having event if History is any indication may very well Deliver this in the past Bitcoin has Rallied the year ahead of havings Bitcoin Rose by 19 in the 12 months Leading up to its last having in May 11 Of 2020. while the having before that in 2016 saw a 142 percent increase even a

Year out Bitcoin seems to be pricing in This next quadrino event Rising roughly 25 since the beginning of March Bitcoin Hasn't completely decoupled from Traditional financial markets to the Extent many in this space have hoped and Its current rally could just mere Passing relief in the stock market as War and inflation remains risks still It's nice to have a reprieve from all The post FTX Carnage fueled by the U.S Federal reserves aggressively hiking Interest rates now a couple things that I did want to mention here as it Pertains to the having first of all Shameless self plug check out son of a for my crypto mining e-course We go heavily into identifying this Having and basically helping you get set Up with understanding what's coming and The timing surrounding it that's Something that I put a lot of work into So I hope you guys enjoy it but second To that when we're talking about this Having coming up I want to make it very Clear The decoupling and breaking into the Macro cycle needs one specific condition That has not happened yet and will not Happen for quite some time And that is the block reward Matching the fees per block well now let Me restate that once again it is the Block reward of Bitcoin matching the

Fees of the block so if you guys aren't Aware essentially Bitcoin has a block Reward that is paid out to miners for Every block they solve currently it's Around 6.25 and it will soon be like 3.17 something along those lines correct Me in the comments if I'm a little off I Could be I haven't checked in a second But when that happens the reward reduces Right this is on a cycle based on the Block height which happens on average Every three to four years and this is What basically Spurs on the next Bull Run Cycle of Bitcoin usually regardless Of what else is happening within the World right you still see this this Increase in the price of Bitcoin because Of this deflationary Behavior now what Ends up happening for a breakout into The macro cycle meaning what you'll see Is a stabilizing of the Bitcoin price Where the having doesn't affect Bitcoin Near to the extent that it does now and The volatility will calm down meaning Over a four year period we won't see the Same Cycles the point at which this Happens is all going to be based off of The amount of fees that Bitcoin miners Are getting in comparison to the block Reward so when we talk about macro Cycles it's important to understand that That really doesn't have a mathematical Conclusion for at least another three Cycles I think it's like 12 years and

Then maybe we'll start to see that we'll Be tracking on this channel and talking About it because it'll be very important It's going to change your mining Strategies the mining strategies will Change significantly when this happens Right This same having event that will likely Increase bitcoin's value will also dis Decrease the profitability of mining Fewer minable Bitcoin means less profit Rising costs of running operations Create a bottom line challenge squeezing Miners on both ends even sitting atop Considerable Bitcoin reserves with a Higher post rally price and new Underlying support levels for the asset Mining companies must prepare for lower Margin environment low a lower margin Environment with reduced cash flow this Will make the miners who have run good Lean businesses with clean balance Sheets and Brake miners who have only Optimized for short-term gains bitcoin's Price plummet in the second half of 2022 Caused the Cascade of bankruptcies of Companies that took on too much debt and Pursued high priced growth and a similar Dynamic is likely on the horizon miners Must prepare for a formulaic turbulence Ahead by acting cautiously keeping more Cash on hand in making their operations Leaner and this is where a weird balance Comes into play

Because cash on hand For a Bitcoin miner means a lot more Than than it does for somebody that's Purchasing and just holding the Cryptocurrency and that's because there Are external expenses that must be paid In Fiat at this time this will probably Shift and this also goes into uh making Strategies That benefit everybody that you're Working with that includes the power Companies that you work with that Includes the property owners that you're Renting from if you're renting and then If you can start to get those into a Position where you're actually operating Within cryptocurrency alone and finding Favorable situations you can put Yourself strategically as a Bitcoin Miner ahead of the rest of the pack and In addition to that then you only really Have the tax burden to really care or Worry about and that's actually going to Play in your favor because the tax Burden will be directly related to the Actual capital gains in the the Profitability and revenue of the mining Machines themselves which actually will Kind of even out at the end of the day So you can hold more in Bitcoin and be Less volatile right the volatility in Holding Bitcoin is a minor typically Comes into play because you have to make That Fiat payment right and the less

Fiat payments that you have to make the Less volatility there is in Bitcoin Itself so negotiating that will be Extremely important and become something I think that becomes Um really Standard in power purchasing agreements And so on moving forward The mining industry can also mitigate Our exogenous challenges the having will Cut the amount of Bitcoin that can be Mined from roughly 900 per day to 450 Per day making the asset even scarcer While providing a deflationary measure To bolster it as a store of value Bitcoin investors own Bitcoin because They believe it will rise in value and Next year's having event if history has Any indication we'll deliver this we Kind of talked about that even a year Out Bitcoin seems to be pricing in the Next quadrennial event Rising roughly 25 since the beginning of March Bitcoin hasn't completely Decoupled from traditional financial Markets and blah blah blah the same Having event that will likely increase Bitcoin's value will also decrease the Profitability of Mining and it really Just repeated everything it just said at The end though here's something Interesting Bitcoins prize plummet in The second half of 2022 caused a Cascade Of bankruptcies of companies that took

On too much debt and pursued high priced Growth and a similar Dynamic is likely On the horizon miners must prepare for The form for the formulate turbulence Ahead of acting cautiously keeping more Cash on hand and making their operations Leaner this is something I'd go into Depth on on the crypto mining e-course Because you are actually acting in Opposite of Traders right and that is Because as a miner what you are trying To do is kind of survive and have a cash Balance on hand to pay to come continue To mine through the bear Market this Means you should ideally be selling you Know equipment and of course Cryptocurrency during the bull run and Buying it During the bear market right it sounds Simple but this is Very different than what you see Traders Start to do running up because the Traders are usually the ones driving That that euphoric feeling in the Beginning and then they're going for an Even higher spot as a miner you're Looking at much more conservative cash Balances and this is going to be Extremely important when you want to Basically continue to mine through like I said the next three Cycles or so and Then the the strategy will change as That block reward starts to hit that That fee level of each block thanks for

Checking out this clip from the crypto Mining show you can check out the full Episode here or more crypto content down Here also I'd like you to check out my Locals page at son of a Where you can become a member for free Or choose to be a five dollar a month Supporter that unlocks additional Content

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