Bitcoin Miners are the new Horse Traders
Miners are modern-day stockyard dealers as they scramble for the best ASICs.
Volatility in the Bitcoin ecosystem is common knowledge. Network hashrate, miner’s fees, and value vs fiat currencies may fluctuate wildly in short periods of time from news, changes in regulation, or simple random chance. Investors are attracted in-part because mining reduces exposure to Bitcoin’s price volatility, but they still must face one fundamental risk: they must actually get the ASICs to mine with.
That’s where the neo-horsetraders comes in.
ASIC purchases look quite a bit like old fashioned horse-trading. There’s a stockyard to meet at to see what’s available; most ASIC deals are done on social media app Telegram and through 3rd-party brokers. A miner’s ability to get good “stock” largely depends on who they’re connected to on Telegram, how quickly they respond, and how much confidence the seller has in their ability to move cash quickly. Like all business, these purchases are ultimately relational.
What’s there to buy depends on the day and time you show up. Telegram may be flush with new S19s under warranty and for delivery tomorrow or there might only be some bad S17s left over. Deal volume can shift intra-day and quantities can vary between a few machines to several megawatts. Some sellers allow a deal to split and others require full volume purchase.
Prices for a particular ASIC may move 20% inside of a week and delivery times may shift from days to half a year with little notice
As with livestock, each deal is somewhat unique as the condition. Many purchases come from abroad and a seller may not disclose whether shipping, tariffs, or sales taxes are included. This is especially true for the secondary ASIC market.
Just as with livestock, the way to navigate the goofy world of ASIC procurement is to have an expert. Reputations and relationships built up over time sometimes even allow for deals to be held while cash comes in. Long-time Bitcoiners are a must-have for a company to have confidence in getting the right machine at the right price in a reasonable amount of time.
-Kyle Drew (Operations) & Charlie Spears (Strategy)
The crypto market heats back up —
NFT trading skyrockets this week, rest of crypto to follow?
Crypto Craziness in Congress.
Capital inflows to mining —
Marathon Digital purchases 30,000 S19j Pros
Stronghold going for IPO & 100MW mining.