Crypto Miners Podcast. Episode 13 – Bitcoin Halving and Flowing

Welcome back to episode 13 where we are going to be discussing about digital asset & blockchain daily news. I’m Thomas Xero and I’ve got Matt Justin with me and in this week’s episode we discuss the hash rate increase in volatility block streams entry into Bitcoin mining supplier delays on new minors, the upcoming happening and the secondary market bat. Take it away with the hash update.

Hey Tommy, [00:01:00] good to speak with you again. I know it’s been awhile in our absence. Few things have happened. One, the price, you know, went up to about a, I think close to 14,000 and then came back down. It seems to be settling over the summer around 10,000 we’ve been crossing down a few times. Uh, right now we’re sitting around 9,500. Again, we’ve had a big drop today and yesterday that surprised everybody but no who used the day trading indicators for their forecast. If you’re building a stock portfolio check out he best investing websites. This can depend on the type of investor you are, the features you need and how much you’re willing to pay for top notch trading technology.

[00:01:30] But, uh, we’re entering, you know, the end of the third quarter and, and the fourth quarter. So who knows how that’s gonna go. As far as the hash rates concern, we’ve been on a tear. Uh, we’ve been increasing hash rate, you know, every two weeks by by heavy percentages. We’ve reached almost a hundred X a hash. I think we were at like 91 and then last night or yesterday it, depending on where you are, [00:02:00] we saw some kind of a flash crash that multiple news outlets and Twitter, the Twitter world is reporting that we dropped down to 75 X a hash and then back up to about 80. So this is definitely an anomaly. We don’t know what’s going on. What have you heard Tommy, about this hash rate drop? does it affect your marketing strategy? look for one in localviking.com/gmb-rank-tracker. If you are interested in reselling White Label Search Engine Optimization, you don’t need to spend hours learning advanced SEO concepts and theories, constantly testing and developing your own effective SEO process, or work 16 hour days in order to provide a high-quality search engine optimization at Web 2.0 Ranker service for your clients. We do it for you. Use our private SEO process and start reselling a proven SEO system designed to rank websites on the first page of Google quickly and efficiently.

Well, I mean, I don’t know if I’ve necessarily heard many things. I think the tinfoil hat definitely gets [00:02:30] dawned on a, something like this where the being, it’s such a dramatic drop. Uh, so, you know, the couple, couple of kind of, uh, competing theories I’ve seen out there, and I’m sure you might have a probably a more rational take than me would be a, you’ve got a number of mining manufacturers who have done presales who have had expected, expected shipments delayed. Uh, so that leads some to believe that there’s a lot pre mining going on [00:03:00] between the three manufacturers or four manufacturers. Um, and they’ve taken them offline that may or may not work. Uh, I heard someone talk about this new Google super computer thing, which is, I, that’s just not true. Uh, it’s not made to do this and it’s a lot of fun. Um, and uh, you know, secondly, just, um, yeah, I dunno, I, I think that there’s, I wish there was more robust, robust reporting on stuff like this. Um, and maybe there could be some more, [00:03:30] I guess like either analysis or insight. Maybe we’ll hear about it in the next couple of days. What are your initial thoughts?

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Well, one, I thought it was fun at first you saw my comment too, so I was taken by surprise. You know, we’ve increased since July. We’ve gone up 14% we had a small dip back and then as a, I’m hearing, you know, batch is being delivered for certain manufacturers. We’ve increased 10% you know, 1% 5% and then the last adjustment was about 10% [00:04:00] on nine 13 which brought us to 85. And then we saw, you know, the, the difficulty adjustment, which is going to be set to happen in the next couple of days. It looks like it almost hit 91 and a half. So that led me to believe we were going to be breaking through a hundred X a hash. But now, uh, you know, I’m seeing on the graph, you know, once you said that to me and showed me the news reports this morning, I just did a double take.

[00:04:30] I started looking at different sites and, and yeah, I find it intriguing that we don’t have much reliable information as far as hash rate. We had this cycle, Bitcoin wisdom, which was in my mind, very good. It had a nice graph to it. And, um, and also they showed like the, the difficulty adjusting, uh, up below and above half, uh, based on the hash rate and so forthcoming on that. That site’s dead. It has an updated, it looks like since [00:05:00] March or April. And, uh, I’ve been relying on btc.com which is not correct because they’re not showing this drop. I even learned a lot about fx carry trade strategy and maximized my profits and reduced my loss. I went to coin Wars and looked at that site a little bit. They show the drop. Um, I saw the article that was published by, uh, it was CoinDesk, uh, published the order,

well, I think it might’ve been coin, Telegraph, coin,

Telegraph. There’s multiple reports of this happening. I do not think it’s anything to do with Google in that quantum computer they announced the other day [00:05:30] or that one, it can only do a 50 something, uh, you know, the cycles, whatever it is they’re doing. Um, in terms of quantum computing and they said it would, it would have to Forex it to be able to break two 56 encryption. But that’s for another conversation. I actually reached out to a couple of my Chinese friends and people in the manufacturing [00:06:00] world of, of, of minors and they were like, what? Drop. So if they were all surprised as well, I had to show them the news. So it’s not like someone, uh, you know, was planning this that someone knew about because it could be, uh, someone dropped off a lot of power. In my mind, the only person, people that could do this as someone in China where they lost a whole bunch of power for some reason, I do see it coming back a little bit. Not where it [00:06:30] was a the other day, like two days ago.

I mean, I mean this like it’s this like almost hundreds of megawatts.

Yeah. I mean like, so from 91 down to 75, that’s a big drop but if you feel you have been played by your broker check out the investor fraud attorney in illinois, IL called Braganca Law. But I’ve, I’ve heard some, you know, theories that it’s, it’s someone lost power or is swapping out their farm. I don’t think as swapping out the farm so much because why would they just drop the entire farm at one shot or you know, they’re not going to sell the boxes in one shot unless they had a buyer wall. And, [00:07:00] and we haven’t seen any like increase in like retail, like on these sites. Like, uh, our friend Scott offered, nobody’s reported an influx of, of like minors coming through and the used market. So I find that strange, uh, to say that it might be just a sale like that, like, like taking down. So it very well could be pre mining. I don’t know. Uh, it would be a lot of pre mining too. And to just shut it down and remove [00:07:30] it all at once didn’t, doesn’t really make sense either. It’s kind of noticeable. Totally. So I’m leading to someone losing a lot of power or a huge outage in China and that it most likely will return, but, uh, definitely intriguing. Right? I mean we haven’t seen like a flash crash and in hashing, I don’t know, since I’ve been in Bitcoin, Washington watching the hash rate, I haven’t seen a flash crash of you . Here is the useful source for the best family law attorney in Arizona.

not, [00:08:00] not like that. Well, and the funny part is a how it coincided with kind of this slight drop in price too. So, uh, yeah, it’s interesting and you know, it’s never a boring time in, uh, in, in mining land, that’s for sure.

Yeah. I mean the, this hash rate I really thought was going to crush through 100 by, by a, you know, like maybe even September and the September how it was looking, you know, 91 and then going back. Keep on going. [00:08:30] But, uh, I’m sure we’ll hear some more information as like the news settles and maybe some people speak in China. I have to think this, this drop is in China because there’s not too many farms that are pulling offline. Uh, you know, unless there was a sudden like outage or, or something could, uh, catastrophic that could happen. And we heard any news of that.

Right. I think, yeah, I remember I saw an article [00:09:00] the other day talking about there’s some task force and I dunno, somewhere in the, uh, like the Tibet region of trying to go and, you know, find some of these illegal miners. Uh, but I mean, the size of the hashing power that went offline is pretty substantial. So, you know, I couldn’t imagine them finding somebody that’s, you know, consuming 200 megawatts, but you never know.

Right. But according to these sites, some of them, you know, the, [00:09:30] it went down to 75 and then went back up to 80 now and it could be increasing. So that kind of leads me to believe that something blew out and that, you know, they’re restoring it gradually as it comes. I know, I couldn’t imagine a manufacturer really pre mining this much equipment. It just doesn’t seem logical. [inaudible] yeah, I get your point. And I know I’ve heard of the delays and we’re going to touch that a little later on, but it doesn’t seem plausible [00:10:00] like that. They would just shut them off all quickly like that. And you know, like if they would just, they couldn’t ship that many yet, you know, so it takes time to ship everything and packet and you know, so it would be more logical to turn down 20,000 and then move on.

Right. Not just shut down the entire operation. So it seems more like in line with like a grid going down in China or something like that that feeds a bunch of farms [00:10:30] and that we’ll hear about it down the road here. Absolutely. Most likely we’ll see a comeback. Uh, I don’t think it’s gone for good. I think it’s just temporary. And as far as the price drop, uh, you know, it’s been fluctuating back and forth. You know, it’s been crossing below 10,000. It hit like 94, 9,300 a few weeks ago and then it came roaring back. All of a sudden cross bright back into 10,000, 200 or higher. So these price fluctuations [00:11:00] are normal for Bitcoin. And, uh, I thought maybe it was stabling a little bit, but now we’re seeing some more volatility.

Well, let’s jump into our second subject, which would be something that’s near and dear to your heart, which is a block stream. You love Blockstream as a company and I’m being a being a tad good sarcastic there. But uh, they, they made this announcement. It’s, it’s actually a little late or a little older news, but you’re talking almost three weeks where they announced an enterprise [00:11:30] mining play in, in, in reality. I, uh, there’s a lot of skepticism around the announcement. It kinda came off extremely, uh, kind of like PR related. There wasn’t a lot of meat behind the articles or the information on it. They, uh, announced that they were partnering with fidelity. So of course people got all excited about it when you actually dug down into it. Um, there wasn’t a lot of substance. It talked about their capacity to have like 300 [00:12:00] megawatts, but it didn’t actually tell you how much their money with today. Right now, Matt, so you go ahead and, and, and get your rant on.

Okay. Why, why do you think it’s going to be a rent?

Well, I think we both agree on this. I think actually most real miners who are plugged in would probably be very, uh, in agreement with like kind of our takes on it.

Well, I mean at first block stream has come across to me as a company [00:12:30] looking to enter different markets by using, you know, dr Bax notoriety in the white paper and Samson Mau just shows up at different meetings and just unannounced and uninvited. I have heard that from several people in China as well. And now, uh, there’s a lot of talk from, you know, the people in Montreal that are saying, Hey, we have hosting available, but now blog streams coming in and they’re trying to wheel the big stick and uh, and, and [00:13:00] say, Hey, we’ve got all this horsepower. And even to the point where I, I heard that the picture was fake and that some people in Montreal were saying that it was a bit farms picture of their facility. I don’t know that for true, just heard from different people in Montreal that they were upset and that they thought it was, you know, flood as well.

It was a big PR stance. And they do have some kind of relationship with fidelity, but fidelity, I’ve heard his boss, miners from multiple manufacturers [00:13:30] has done business with big bane and Watts minor and you know, silicone. This is evident in their friendliness at that show I went to in may, everybody was invited through, you know, we all seem to, you know, have a lot of good discussions together. The one, one person that was absent from that was Blockstream. I didn’t see them or didn’t meet anybody from them, but it doesn’t surprise me that they’re, they’re trying to enter this after the whole dragon men fiasco. [00:14:00] I think it’s a little disappointing to see them, you know, trying to convince people in the space that they have some kind of uh, expertise in mining because in my mind they don’t, they don’t have really any advantage over anybody in Montreal or setting up your own mind with your own advantage of power. I hear it as a little, you know, PR stunt and just to try to get some clients to come with them so that they could presale some, some posting. [00:14:30] I’m sure they have a lot of miners and I’m sure they’d made a bunch of money on different things in the past. But to me it seems kind of weird to see them entering in, uh, the hosting arena and making this big announcement using some fake pictures possibly. And, uh, causing a little stir.

Yeah, I, yeah. I don’t know. But I, I know that those pictures looked very similar to the bit farm setup. I did. Uh, I did on Twitter actually reach out to bid farms and they confirmed that it was [00:15:00] not their facility or the pictures of their facility. Um, however, there really isn’t any, uh, verification on any of their, their, uh, facilities they, they in, in the press release, which will post in the, um, in the show notes, they did mention multiple facilities, one of them being in the Montreal area. Uh, and then secondly, there was an area in Georgia outside of Atlanta. And just recently there’s been some pictures of some, uh, [00:15:30] construction taking place. But that’s really it. So, uh, to me it sounds like they’ve partnered, they, they’re kind of the marketing end to, uh, either fidelity or some other larger institutional players, kind of, uh, angle to bring in institutional, uh, kind of enterprise miners and Blockstream is kind of like the marketing partner behind it. So, you know, we’ll, we’ll see where it goes. I’ve got my doubts. Uh, they don’t have any, like you said, there’s nothing from an operational expertise [00:16:00] side of things. Like they’re not their own manufacturer, they’re not their own power generator. So in reality, if someone is using the mind with them, it’s going to be for a premium for us miners out there. It’ll be interesting to see how things kind of transpire over the next year or two with them.

Yeah. I also think it’s, it’s, it’s unfortunate that they use some of their, you know, notoriety from their CEO to push into the hosting arena and all these different, they backed the dragon [00:16:30] man. I found it very questionable. It was, I know it wasn’t Blockstream themselves, but everybody knows and seems to think that they have some higher power in Bitcoin or they’re, you know, they’re involved in software, they’re now involved, said something about pools. So they’re, they’re trying to be an every facet of Bitcoin and, and try to show that they’re the super company in this, in this arena, when in reality they haven’t done much. If you look at from, [00:17:00] I mean, from the standpoint of, of, of like what have they contributed to Bitcoin? Um, I don’t know if I see much contribution. Bitcoin Loophole Dragons Den, also known as the bitcoin loophole scam, only makes a reference to the original software in order to take advantage of its popularity and success to con innocent traders into investing in a bait-and-switch scam. The official Bitcoin Loophole was not featured on Shark Tank, on the Dragon’s Den show, endorsed by Peter Jones a fact that did not prevent the people behind Bitcoin Loophole Dragons Den trading platforms scam to fraudulently use celebrities’ false statements to promote their dubious product.

to be fair. I think

maybe I’m wrong.

Yeah. Yeah. I think there’s elements, well, I think there’s elements of Blockstream that are kind of contradictory, right? Like you’ve got their development of the green address, uh, which is a really slick on this was an acquisition that took place. Uh, so like the green address wallet, they’ve [00:17:30] repackaged it, they made a very slick multisig type setup that they’ve done really well with. The liquid side chain has definitely proven to be, I would say, a success. Uh, and, but that was from like kind of their internal dev team side, their lightning network, um, dev work so far has been really good. But then you’ve got, you know, like this other side of the company, which is like this marketing side with Samson and dr back, which I feel like is almost, [00:18:00] it almost takes away from some of the legitimacy, um, in term, uh, in terms of some of the engineering stuff that’s going on. So for sure there’s room for, I think criticism, but, you know, it’s, I think it’s just a little bit more complicated with, you know, just some of like how they do things on a marketing side and, uh, represent themselves.

What I find a little disturbing is that, you know, they’re trying to do pools, they’re involved in lightning network, you know, they have their mind [00:18:30] on fees. It’s very clear.

Well, let, let’s, let’s talk about that pool. Like w why some dig into that. Cause I think you and I have the same view on this pool. Why, why? It’s kind of a, it’s kind of a, not a big story.

Well, I mean, you gotta, you gotta have customers to be on the pool and you’ve got to convince them that your pool was better than the others. I also don’t like the, the, the, the closeness that some of the core developers like Matt Corralo has with Blockstream. This [00:19:00] kind of like, to me, a facet of collusion involved. Uh, I, I’m not gonna say anything cause I have no proof of anything, but I’m just from an outsider looking in, I see them as trying to get involved as much as they can to make sure that they’re involved in fees, mining pools, hosting lightning network while it’s, and then they also have their Explorer and you know, there’s just [00:19:30] different stuff that seems like it’s all interconnected. Yes. And I agree it’s for Bitcoin, but it seems like it’s meant to promote this company. I have questions on the founders and their backgrounds of what makes them so great in Bitcoin other than the footnote in the white paper.

There’s just more to it. It’s, I see. It seems like this is part of their agenda. They’re trying to influence and I don’t know if they’re going [00:20:00] to win. You know, Bitcoin seems to shun things like this and move towards like individuals, like setting up their own farms and not going with this big person. But you know, clearly fidelity found some safe Haven with the name block street. It seems like it holds weight for them. If they say, Hey, who are the big companies in this space? Well there are not really, I mean it’s a public company was, is to enter the space, [00:20:30] you know, and you’d say, who would you partner with on a manufacturing side? Well they fury was, came to mind, you know, you’re like, that’s why [inaudible] it seemed like a logical choice for them and they were able to lock up North America, uh, flock stream has no, no agreement with any manufacturer at the moment that I hear about. Their facilities are just going to be there and be another hosting option. I guess. I just hope that these big corporations that want to get into Bitcoin down [00:21:00] the road don’t fall through this PR stunt. That block stream is the option that’s going to be the safe Haven for them.

Yeah. So my take on the pool side of things is you mentioned Matt Corralo. Yes, he was an early member of Blockstream, but he, but he left and it, he’s actually had a public spat with Samson. I’m on Twitter or like a number of months ago. And so there was actually some kind of bad blood between those two or at least a certain portion [00:21:30] of block stream in him, which w what I find really fascinating is that they essentially, they forked better hash. So, uh, because better hash, which is a, a protocol, uh, open source software developed by Matt Corralo, it’s completely open source. And so all Blockstream said was, Hey, this looks like a great platform to build on. We’re going to take it. And so, uh, it’s almost like a shot across the bow to that. Uh, you know, that kind [00:22:00] of ongoing TIFF that some of those people at Blockstream seemed to have with Matt. And they’ve essentially used repackaged software, um, to provide this for their pool pool, which, uh, anybody who’s into open source software understands that, that that’s part of the, the deal when you make your software available to anyone to freely distribute, even your competitors can use it. Uh, so it will be, it’ll be fun to kind of see how that kind of continues. [00:22:30] Cause I know Matt’s working on a project as well too.

Yeah. I didn’t even know about that little spot. I don’t really follow Twitter these days much as you, but um, that leads to my argument. You know, there, there is something more about this. They’re looking to maybe monopolize certain aspects of the Bitcoin community to corner certain markets. That’s not good for Bitcoin, but it, I’m sure Bitcoin and its uses will shake itself out and uh, bring to life whatever [00:23:00] is, is behind this. But yeah, I don’t know much about the macro beef with Sampson, but, uh, I know I’m blocked from Samson on Twitter.

You travel, you, well, let’s jump into our next subject, which, you know, we’ve, we both have some experience in, in, in a, in different ways is the supplier delays on new miners. You’ve got what’s minor Mark OBT obviously, um, bit Maine and a in a Silicon all [00:23:30] releasing miners doing pre-sale batches all the way through the summer. And obviously I think that’s uh, responsible for the uptick in hash rate, but there has been some delays with a number of these manufacturers.

So why don’t we kind of get, get up to speed on that, Matt? Yeah, so basically what I’m hearing is that there’s only two manufacturers who make the chips is Taiwan semiconductor and it’s Samsung. Samsung’s been [00:24:00] under extreme delays because of trade war with Japan, which is going unnoticed in the news. But when I Googled it, it’s true that supplies for the silicone are from uh, Japan are being delayed or were being delayed to South Korea, which then you know, obviously delays the chip manufacturing for something like this. I’ve also heard five G [00:24:30] is playing a role in it, that that technology is being rushed out and that Samsung is trying to get ahead of the curve and so they’re dedicating more of their internal to 5g than in crypto mining. And the same with Taiwan semiconductor. They’re, they’re focusing on apples, new chips and all that, that stuff for the phones and that the crypto mining is just not taking priority for them as far as chipsets.

Now as far as the presales being delayed, [00:25:00] I think could be two different things. They could be what I’ve just described as the supply chain problem as well as maybe the manufacturers being a little over aggressive taking presales. Now there’s really no way to tell how many and uh, minors you know, are, are sold in these markets. There’s no like a real tickers of, of how much miners are sold on presales and batches. But there was an article [00:25:30] that was published, I believe in one of the publications mentioned about micro BT selling 200,000 miners, which was announced at a conference, which happens I think over the weekend in China. And the CEO, Dr. Young was at the conference, I think it was on CoinDesk here. This a micro BT expects 400 million in Q three is Bitcoin miners sales search. They said they sold [00:26:00] about 200,000 by the end of this month that they are going to be delivered.

There you go. Um, you know, maybe they delay it is true about the manufacturing. If they say they’re gonna deliver it by the end of the month, there’s definitely been a delay in delivery. I’ve heard across the board, I’ve heard from, from inner silicone Watson liner, and I heard that August batch was delayed for Bitmain because some people in China that had ordered them, the [inaudible] did not get their batch. [00:26:30] What this all means, I don’t know, is it coinciding with this hash drop? I, I think that’s a little conspiracy, but, uh, we don’t really know. We’re on the other side of the world. Right. Yeah, definitely seems

like from the manufacturer side of things, they’re pretty in unison in terms of blaming the chip manufacturers, you know, one just has to take them at their word. It’s not like there aren’t any, uh, boxes going out. They definitely are moving. It’s just [00:27:00] a little bit slow, which would definitely lend credence to do that take. But the Chinese are not exactly known for their transparency. And so because they’ve had somewhat shady ways of doing things in the past, specifically bit main, kind of leading the way with rampant, uh, pre mining in the past. Uh, I think it’s just kind of the default, you know, mindset of all of us who were in, uh, this game. Do you automatically assume [00:27:30] that that’s what’s happening again, because that’s what these companies have done in the past. So we’ll probably never know. But, you know, I think if the delays continue much longer, you’ll start to see a lot more pressure, uh, into stuff. But it’ll be really interesting going into 2020 to see how much hashing power is on the network. I’m, I’m, I’m actually thinking it’ll be close to 150. Um, by the end of the year

we were, we were all thinking of at least 120. Now [00:28:00] we’ve met over the summer. Yeah. I mean, this flash crash could be just, just something that just happened and we’ll never know why according to this article, what they’ve announced then, you know, there’s, that would be worth about $350 million in hell or $400 million in gross sales. It’s good for Bitcoin. It’s good for mining, you know, and uh, you know, and I’m sure they’re going to deliver the miners as scheduled. Agreed to leave. We [00:28:30] will see how it goes.

When you say it’s good for Bitcoin, you’re saying that because it’s very good that we have a competitive landscape among mining manufacturers again, that as well as the hash rate going up

makes it more secure.

Well, that leads us into our second to last topic, which is the upcoming happening. So, uh, you know, there’s been a lot of speculation in terms of, uh, some competing theories that there’s this whole stock to flow ratio [00:29:00] that she’s taken Twitter by storm and stock to flow has been pioneered by this anonymous Twitter account apparently is, you know, some type of hedge fund quant guy, uh, in Europe named plan B. And he has essentially come out with this model that tracks, um, Bitcoin supply to have earnings and price and it’s modeled out almost perfectly to other assets like gold, S [00:29:30] et cetera. And a is he’s essentially saying that the price is going to jump up into the 100,000 range, um, very soon, uh, in 2020, either near the happening or right after the happening. So, uh, you know, obviously a lot of bulls are excited about that, but it does tie into the mining kind of landscape and why you’re seeing such maybe uh, Exubera ism with, um, people buying machines, people trying to get scalable [00:30:00] mining operations up and going as well. Where do you think, Matt?

I’ve really seen that Twitter account. I have to get up to speed when Tommy posts it as well. But I mean the havening I we’re baked in right now. That’s the feeling I’ve been getting the last few weeks that the price action that we’ve seen in the run up until 14,000 of the pullback, the hash rate increasing all this excitement back in the, uh, in the minor market for the last six to eight [00:30:30] months leads me to believe that this is the happening run up and that we are in it. And where we go to really depends on where we are. You know, closer to the end of the year. I know a lot of people placed their bets by securing presales and if they really did sell 200,000 miners of micro BT, how many did you think, you know, silicone sold, how many of you think bit main sold [00:31:00] and Canon and there is definitely excitement and I see that as positive push towards what you’ve just described as these numbers.

I don’t know, 100,000, 50,000. I don’t even think those are attainable at the moment given the volatility and the push that I’ve been tracking, you know, on the, on the price side, we have a very hard time breaking through some of these resistance levels lately. Unless something changes fast [inaudible] we get some new [00:31:30] blood. This doesn’t seem like new new people and new blood coming into the market. This seems like all the old people coming back for some more and we’re driving this market, the old miners and the new miners and people who’ve been waiting on the sidelines since the last run up who didn’t get their chance and, and place their bets. So, I don’t know. I don’t know if we’re going to be a little disappointed running into the have any closer and that we’re not going to see what you’re talking about or, or we’re going to see [00:32:00] this exuberance and uh, uh, skyrocket. I, I’m leaning towards, you know, seeing most of the price action this year and running into the beginning early beginning of, of next year. If we don’t see it by then, I don’t think we see it I think because then who’s buying these version of miners at these ROI? If like you said, it goes to 150 or like I said 120 and the price doesn’t go [00:32:30] and go to 15 1617 and stay there. What is the outlook for an S nine or I’ve done some number crunching. What’s the outlook for an S nine if we do

a C a run up and then have hard pull back back like to say a 7,500 with a one 50 hash rate, the [inaudible] nine doesn’t look like it is survives that anymore except for in really like extreme third world countries.

The Ester [00:33:00] nine survives everything I know.

Seems like it’s resilient. I I’ve predicted death several times and it doesn’t want to die on me. I know all those people who bought them cheap are cursing me and say that’s my baby. But if you run some numbers, I did on Scott’s little tool there and some other tools and I tried to, you know, play around with the hash rate and the predictive of the have any, like he has it and so forth. The ass nine doesn’t look too good after havening if we dropped down [00:33:30] below 10,000, like two 7,500, let me just tell you that. Yeah. But it looks, it looks very good still if we’re, if we’re 16,000, the have funding doesn’t affect it as much.

Yeah. That’s a bit of a contrarion take. Cause I think right now the prevailing sentiment is that, Hey, where’s its rocket ship time buckle in? We’re, we’re in accumulation zone. Like similar to, uh, I would say the, uh, the hard fork with, uh, with Bitcoin cash [00:34:00] back in, uh, you know, summer of 2017. You know, people just had this expectation that Bitcoin was going to rocket, uh, back when it was like around two grand or so, but it did, it did for a second wallet. It pulled back the 1800. Yeah, yeah, yeah. But I met, I met like, right. Yeah. Right after that fork though. But people had a pretty good indication, like once the, you know, the U S a F soft fork was a kind of, you know, mitigated all [00:34:30] that stuff and they had the split. It was like rocket ship time after that.

And I feel like people have a similar mindset to this, but I also feel like at the end of 2017 I’m going, of course we were like moon, moon phase. People were thinking 2018 was going to be like just pure. We’re going to the like, you know, outer stratosphere as far as we could go because we’re going to have all these forks that we’re going to come and people are [00:35:00] going to make money off of all these Bitcoin for, and it was going to be, people were just going to rack it up and in, if anything, it was probably one people got wrecked more than anything in 2018. So either way, I’m not, I’m not gonna commit because you know, a lot of this is emotion based. Like Ooh, it feels like it could be like this. We have no idea. Uh, so

we have to push it. I mean, we have wished, Oh, we definitely do. And 15, 16 for these other people, for the sideline people, for the people who are speculators [00:35:30] to come back in to get it to hire again because we don’t touch those numbers again. There’s no for anybody on the street, the bar tenders, all those people that, that shouldn’t have been in Bitcoin in the first place so early and then came in in 2017 they have to come back or a new version of them has to come back. And my mind, I don’t see that happening unless we hit the price like higher, like, like we’ve got to hit the 1516 and start turning more heads. Like we [00:36:00] turned a lot of heads hitting 12, 13, 14, you know, thousands just running up.

Well, you’re talking about a very taboo subject right now because you know, in theory you and I are competitors with each other, right? We, we, because we mine separately and we want other miners to go out of business. Uh, just out of like a pure, a selfish standpoint in terms of like why, where our incentives are, are aligned and we both know that in order to make money in mining, [00:36:30] it’s that it’s a very, very small window where people make the most margins in mining. So the name of the game is just to be able to essentially be in the game. You don’t, you’re not gonna make a ton of money through a majority of the year or through a majority of like, let’s, let’s not even put it in a year perspective that the blocks that are, that are like being continually to be mined. Uh, you’re, you’re trying to get to a scenario where the difficulty gets adjusted [00:37:00] a little bit and you catch that sweet spot of a difficulty adjustment in your favor and a pricing action while others are turning, you know, there’s off. And so it’s really setting up, at least I’m talking about a larger scale kind of operation, is really setting things up where you can be at least break even when we’re in the worst of the worst or even during like, you know, kind of like a middle period, but be in position to capitalize when we have those couple months [00:37:30] of an upswing that you make, you know, hundreds of percent on, on your investment. So I don’t know. We’ll see.

Yeah. But I, I don’t know. I, I, um, I’m leaning towards big disappointment unfortunately. I see a lot of people have made a lot of bets and buying miners and it feels like fall of 2017 where people bet a lot into mining and then got whooped, including me. This run up that we’ve been seeing [00:38:00] over the summer, this excitement in mining about new boxes. It just feels like we’re in the habiting run up and I don’t know where it stops, 1516 and we settled there and then things, they very brisk in the mining Mark. So you and I have a lot to talk about.

Yeah, absolutely. Well, I mean, I think that that’s a perfect segue to our last and final topic for today, which is the secondary market. And as you and I were discussing before the show, there’s two elements to the secondary market, right? You’ve got [00:38:30] your secondary market for pre-sale orders that took place and months ago for new minors and then you’ve got your use secondary market. So obviously I pay pretty close attention to it and uh, it’s really interesting how flat it’s been on the presale secondary market side of things. We were expecting kind of a premium potentially on some of these new boxes that were coming out. And initially there was some interest back like mid summer, like beginning of August, end [00:39:00] of July, you know, there was, there was some interest in, you know, people acquiring them at a premium, but really that interest is died way down. And I would look at that as a indicator that people are like,

I want a mind. I don’t want, I don’t want to do whatever I can

to mind right now. So there’s definitely a interesting gamble taking place with those things. What do you think, Matt,

you’re saying that they are not releasing them or two for sale or are you saying [00:39:30] that the there’s no market for it, nobody’s paying it?

Uh, I think that the, the, if there was a market there for people who were willing to buy them at double the price of what they were like, you know, look at some of these prices, you’re talking anywhere from total 2000 to $2,500 probably right in that ballpark of people who pre-ordered a lot of these boxes for, you know, in 20 S’s or seventeens, whatever that number is. I would expect to see people [00:40:00] being able to get between 4,500 to $5,000 all day long and some of these kind of secondary market channels and none of them are moving that people have them listed. I’ve checked with a lot of the brokers [inaudible]

it’s very dead.

I think it’s the delays from the manufacturers on the delivery. I don’t think it’s the market right now. Interesting. Honest with you. I think that people have thought that they were going to get the miners right away. And if they’re going to be jerked around then, then they’re going to play the game [00:40:30] and, and see what the market has to bear. I don’t, I also think that not a lot of people that originally fill out the, about flipping them or flipping them, they’re actually finding power. You know, they’re, they’re getting hosting and they’re wanna take delivery. From my outlook, I’ve seen a lot of people, uh, very eager to take delivery and not looking to resell them.

W well, I think that the, the market for them

not being there to buy [00:41:00] is probably, if it’s all about timing, for example, people are really excited about that. When we had that initial jump from like six to 10, in fact, I think at one point to get up to like 14, uh, so of course you had this initial kind of like, Hey, we want to get into the secondary market. And there was, you know, a period of like a month or two that, that was kind of hot. Now that I think price has settled back down and kind of reached this equilibrium, uh, that interest isn’t there [00:41:30] from the people who are following. So I would expect maybe there would be more interest if the price spiked here in the next couple of weeks. But, uh, it doesn’t look like that’s going to happen. But I could be wrong. I mean,

to me, I was expecting another pullback. I mean the graph, I, I do a little like playing and trading as you know, and graphing and thinking that I know something about that stuff. And uh, uh, my indications look like it’s hitting down [00:42:00] before it comes turning back around. But Bitcoin usually does a big red candle down and then turns around and does a huge green candle up. So it’s hard to tell. But I think because price settled a little bit, like you said, people are not moving forward with some of the purchases, maybe that, that, that they were going through. They will seeing if the price continues to go up. Uh, they’re also contemplating overpaying [00:42:30] for a box that ensures that you might not ROI. Right. I don’t know. You know, I’ve heard of people like looking for test boxes, five, six, 10, you know, high prices, but hundreds and hundreds of them overpaying to X.

I don’t know if anybody’s out there doing that. Right. Excellent point. I think that if you, if you said, Hey Matt, I got five miners to sell, uh, can you sell them from me? Uh, you know, $500 more maybe. Or maybe Scott cat, you know, [00:43:00] but taking on a big bundle of somebody’s miners at a double price, that what they probably paid that’s, that’s gonna be a little hard to handle because you’re basically insuring never our hope on I. yeah, but I think that may, maybe that’s what we’re saying and we’re also seeing this flatness that that kinda stagnates sales a little bit. We’re definitely seeing my under sales following price and that when the presales are selling out, people [00:43:30] are betting more, but how much do they bet into the future of next year? That’s my question too. They go into January, February, March. Is there a new boxes that come out?

I think that might be new boxes coming out before the habits. Like announced, not delivered because it just makes sense that they’re going to push a fast shut box and then you know the, they’re going to say this is going to get you through the heavens. Now who knows? I mean it really, [00:44:00] it really has to do with price doesn’t it? The hash rate can go up as much as it wants, but the price is gonna really help us or really hurt us. Just because you got less Bitcoin. If you had double price it would negate it, wouldn’t it?

Yeah. I mean I look at what happened here in 2018 as a better indicator. Right? Like from the time we peeked at the end of 2017 pretty much all of 2018 hash rate continued to go up over what we, you know, we were at the peak of 2017 right. [00:44:30] People, a lot of folks us got involved and yet price did not correlate with hash rate in that instance. People got, right.

Correct. Well, we made our bets back in December, so we were buying, we were buying minors in presales. My minors back in December of 2017 when the price was running and I was going to get delivered in March. By the time March it, I was done. I already, I already knew that I couldn’t put him in the place that I already had specked out [00:45:00] because eight and a half cents was going to kill me. I was looking, scrambling, looking for other places. I don’t know. I don’t know if we have the same environment right now. I think that maybe we do. Maybe we’ll see a run up. The price will run again. Everybody will come and then all the presales, we’ll start again even further into the new year and, and then we’ll run into the havening. But the happening to me, we all knew it was coming and we’ve been anticipating, I don’t think that we see [00:45:30] price spiking when the havening occurs. Yeah. It’s either, it’s either before or way after. I do, you know, historically it doesn’t show that happenings have had spikes and price. Correct. Absolutely. That’s why I’m leaning towards, we’re kind of baking in the havening now this summer, run up this mining, uh, this new 200,000 that Watts minors sold all these different numbers that we’re hearing, you know, people buying miners and farms coming up. All [00:46:00] this is due to that. People thinking that they’re going to miss out and they, a lot of people placed their bets already. I agree.

Well Matt, it was fantastic to be able to catch up. We know it’s been a little while. Uh, but we are dedicated now that summer is over, kind of were on more consistent schedules. We’re looking for, we’ve got some good interviews lined up, lots of stuff happening in the container world. Uh, lots of stuff happening in the custom PDU [00:46:30] kind of innovation side of things, uh, to keep up with these powerful boxes. So we’re going to be touching base and talking to folks in, in those markets. And we’re looking to tap into kind of, especially here in the United States and Canada, the kind of growing natural gas or trap gas kind of movement. Uh, we’re going to be talking to some folks who are playing in those realms as well. So we want to thank you. Um, anything else from your end, Matt?

No, let’s hopefully a price [00:47:00] goes up and the, the flash crash stays down. We’d like to see the hash rate decrease. Right? A little bit. Not, not for a long time. Just to know so we can make some money. Great. What was nice talking with you Tommy. Thanks. All right, thank you listeners.

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