Bitcoin Mining: does it have legs?

Afternoon all

I was looking at one of the new IPOs that kicked off yesterday, Ebang International Holdings Inc (EBON), opening at $5 per share and ended the day slightly under.

Couldn’t find much on the company (financials via Stockopedia and Morningstar aren’t the greatest, and even their website doesn’t seem well-maintained (although they are a Chinese company and perhaps have a better-updated site in their local domicile, don’t know)) but what I did find of interest was their business, as they specialise in the manufacture of of high performance Bitcoin mining machines.

Bitcoin mining has to be an area to put a pin in surely. At this point in time the rumour mill is rife with suggestion that several large financial firms might delve into the crypto currency market, with many potentially developing their own.

Admittedly I’ve steered well clear of Bitcoin as it is a world I do not understand in the slightest, but surely with institutions growing ever closer to this market (widely reknowned as the future by its supporters), surely the need for Ebang’s (and similar companies) hardware will hit top gear, no?

Would love to hear from others better versed in crypto on the above ideas. Would the BlackRocks and Baillie Giffords of the world need to invest in mining hardware if they were to release their own currency or are these two seperate sub-areas?

Also if anyone here is already invested (or thinking thereof) in similar companies that are available via 212, I’d love to know. Did a quick hunt for a few of the industry leaders but none were on the platform that I could see.

Food for thought I hope. Opinions and advice always welcome.

Cheers

JOE.

Not invested in, or even interested in crypto, but here is what I have gathered:

  • Crypto might as well be an index tracker for the S&P500, as they rise and fall in direct correlation to the markets. I still don’t understand why some call it a hedge, as it performs the same as an ETF index tracker in my eyes but has bigger and more volatile swings.

  • The Bitcoin world just experienced a “halving”, whereby essentially new bitcoins being added into circulation is reduced. So by my eyes, this just makes companies like this have a harder time getting their hands on bitcoin by mining. (I could be wrong, but this is what I gathered).

  • Cost of mining rigs is expensive and essentially a zero sum game if this is the only source of income for the business. Cost of device failure + elec costs seem to make this market super hard.

So, in my eyes, if the cost of bitcoin or cryptos are essentially tethered in recent years to the global stock markets, add in the cost of hardware, cost of hardware failures due to excessive use and the cost of electricity, I can only see this working if luck is on their side. Many of these companies make their money from the smaller Alt coins, but that just presents a huge amount of added risk for a business too. Talking of Alt coins, who knows when the next new big Alt coin is going to take over the market - lol FedReserveCoin ? who knows.

That’s my take on it all, I have side stepped crypto but It may be a good fit for some.

Knew I stopped typing too soon. Yes I knew of this last month and then there’s another in 4 years time. And I think after that, that’s it, bit could be wrong. But yes that was another concern, being if coins are diminishing, at what point does mining become redundant?

Or, does it just ramp up if the big institutions get into the game?

Not sure I follow the connection between this and the practical side of building and selling mining hardware, but your point about the alt coins is a good one and echoes my thoughts on there always being a market for them, particularly if crypto comes to the fore the way many think it will.

These devices aren’t Ebang’s only production line, they’re also in chip tech but as I say, the financials aren’t great so could be your summation is spot on. Still, makes me wonder if there are better boys and girls out there doing the same thing.

Bloody knew this one would come back to bite me in the arse one day! :smile:

On regards of “mining”, I think that Ethereum network is more promising on that, they network are about to release a big update including a sort of interest rating as well, and all the big Corps coming to Crypto, might use their network for their solutions, besides of Bitcoin as store of value.

The thing with Ebang - and the thing I should’ve uncovered back around IPO time when I was thinking about this - is that, over and above the mining machines, they are predominantly working to expand their business by establishing a crypto exchange and mining farms. As well as expanding the possibilities of crypto into financial services, education and healthcare.

Very ambitious but the jump today was due to establishing a subsidiary in Singapore in preparation for setting up the exchange. Big step and one that proves they aren’t mucking about.

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I’ve read a lot about crypto market manipulation, not one for me. If you’d rather put your money somewhere other than stocks or bonds I’d put it in physical commodities.

Coffee would be good if T212 put it on…

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It’s much smaller than stock market manipulation.

No, it’s really not.

The problem I have with Crypto (at least the Broker I use), seems to be that you can’t buy fractional Alt coins for some but you can on others? Pretty ridiculous if that is the case. And staking required an X amount to be put away? Usually in the 1000s unless it is the top 5?

Bitcoins $ value is about 1,000% of what it was at the previous halving, which itself was about 10,000% of its value during the halving previous to that.

If you get half the amount of BTC, but the $ value of BTC has increased 10-100x, then the halving isn’t going to put you off.

Once there are no more unreleased BTC, all the computers will just be processing transactions. They already do this, and get a small cut on every transaction.

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Today… I’m upset.

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