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Thanks Hexam, yes would make sense to either take depreciation out, or adjust the figure to the same timeline. Probably more useful to the likes of blonity and others.
Electricity is the biggest cost, so they must be getting a good rate.
Mara also gives lesser BTC per EH than the likes of Bitfarms on the monthly updates, so there's another thing about them that puts me off.
I don't have the same issues with the other miners, most are decent.
Hi AB - I agree that to compare profitability like-for-like, costs should be treated the same way - including the number of years used for depreciation of machines. I haven't done a full comparison of MARA v ARB though (too much work, wouldn't be perfect regardless and I'm not interested in investing in MARA anyway for much the same reasons as you). All I'm saying is that because there are so many differences you (not you personally, but general you) can't just take headline profit figures and make bold statements on the back of them without understanding the big ticket items they do and do not include.
As to 'mining margin' though it is clear ARB don't include the cost of machine purchases (via depreciation) in their reported margin so I just took out depreciation for MARA as their cost of revenue figures do include it. So comparing MARA 'mining margin' using the same basis that ARB do then MARA have a better margin. As you say though, ARB's 'mining margin' should improve with the new machines and immersion (and could easily end up better than MARAs).
Small metaverse crypto
https://youtu.be/CJllpv52_Pk
BTW watch out for high Gas fees. Best time is to do it 1-3AM if possible, when network traffic is lower, otherwise will get screwed with massive fees during the transfer via ETH network (from Kucoin to Metamask).
Well if you own enough Flame you can get entered into the lucky dip for DIO :-)
Confident that flame is gonna pop over the coming months. Loading up (and staking) whilst it's cheap, when the game launches should see a nice upflift - providing the game doesn't flop lol - but i've done my research and it's an awesome project with a lot of backing and interest.
Even if it doesn't, the free Flame is a nice side-earner.
Thanks. Yeah metamask - I'm on step 2 for now. Hoping that flame jumps when that decimated imo starts.
@ArgoBul - I see. Which wallet are you using?
I have Metamask so sent the FLAME and the USDC to that.
Then connected Metamask to the Firestarter staking page.
Then used Quickswap to create the FLAME/USDC LP token.
Finally, staked those tokens.
What I like about it is it's 24x7x365 interest so quickly adds up.
Hexam - to close this out - MARA used to depreciate over 2 years but changed it to 5 years - presumably to make their numbers look better.
"Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Subsequent to December 31, 2020, management has determined that the expected useful life of transaction verification servers would be five years. Prior to December 31, 2020, management depreciated these servers over two years"
https://ir.marathondh.com/sec-filings/annual-reports/content/0001493152-21-006139/0001493152-21-006139.pdf
Hexam - this is Argo's depreciation method:
"Depreciation is recognised so as to write off the cost or valuation of assets less their residual values over their
estimated useful lives of 3 years in the case of mining and computer equipment and 5 years in the case of the data
centre improvements, on a straight line basis. Depreciation is recorded in the Statement of Comprehensive Income
within direct costs.
Management assesses the useful lives based on historical experience with similar assets as well as anticipation of
future events which may impact their useful life, such as changes in technology."
https://argoblockchain.com/wp-content/uploads/2021/05/Argo-Blockchain-PLC-2020-Report-Accounts.pdf
I did buy some FLAME on Kucoin but still going through KYC checks for Firestarter!
Argobull - did you end up getting any FLAME?
I’ve been bought a bag and got it staked earning 385% interest
Happy to run over it with you if interested
Hexam, I'd add that depreciation can be done in multiple ways so if you want a like for like comparison you'd need to ensure that the depreciation method is the same.
Eg. Argo's Q3 depreciation was 3.25mil (on 1 EH), while MARA's was 4.3mil (on 2.7 EH). Not convinced those numbers are like for like depreciation methods.
I think Argo does 3 year straight line but not sure if I'm remembering correctly or not.
https://polaris.brighterir.com/public/argo_blockchain/news/rns/story/xj340kw
https://ir.marathondh.com/sec-filings/all-sec-filings/content/0001493152-21-028278/0001493152-21-028278.pdf
Forensic accounting eh ?
Mara included all costs, if Mara Did the same accounting standards as arb, Mara is more efficient.
Lower costs coming to all f the industry not just arb, Mara have expanded and bought machines with cash they have ad many more to come.
The best part is pretty much all year it’s correlated very well to btc .
I actually agree K3 in terms of MARA. I wouldn't touch them for many of the reasons argobull gave. On depreciation though I disagree that it is about forensic accounting - which makes it sound like fine detail. This relates to the cost of machines and is by far the biggest cost for ARB going forward (or for any miner) so I just think any measure of profitability that excludes it is just bonkers.
Hexam, I know you look into depreciation etc and if I was a smarter guy, I would follow you in there, but fir the effort it would require, I don’t think there would be enough in the numbers to sway me away from Argo towards MARA. All the other stuff posted by ArgoBull interests me more than the forensic accounting and I am intrigued about the “extra” 125 btc from October. Can’t wait to see if we get extras again in November.
Hexam agree it's hard to compare with different reporting styles etc - and you can interpret both in a positive or negative light.
However Argo is a clear winner for me as their margins will soon be improving two step - much cheaper electricity costs and immersion.
I wouldn't invest in MARA for many reasons, including coal usage, over valued market cap, over compensated execs, SEC and litigation, buying most of their hodl, etc.
K3 - Interestingly MARA have stopped reporting EBITDA and instead have their own metric "Non-GAAP net-income" which (surprise, surprise) doesn't come out as a big loss but a huge profit! Understandably all companies like to present their numbers in the best light and neither ARB nor MARA are any different which is why it usually pays to dig a little deeper.
Must admit I don't like EBITDA as a measure for crypto mining as it excludes the cost of machines - the very thing that is key to miners and that causes so much aggravation and uncertainty in terms of funding.
@Trelawny
I liked the blonity interview, I don't question PW drive to make the company succeed.
I personally don't think the company cares about retail but more needs retail until it can stand without them.
The blonity interview actually made me sell more argo because my interpretation was that a 'potential' source of funds for the next raise will be a share issue again but giving an option to retail... Basically in my mind us PI will get hammered again on the next raise all under the guise of PW wanting to give the discount option to retail. I took it as quite a big red flag as I was hoping we would go down the debt route first to raise the price and then issue shares.
I also wasn't keen on not leasing out Helios capacity as a primary option, it wasn't a 'no' but not much of a yes either.
Of course we wouldn't have infrastructure anyways to host 600mw I think he said the transformers on site can currently be squeazed to 250 mw which is still a good chunk of power and as of yet the machines for it are unfunded.
The blonity interview was good, honest and I think shown Argo in a good light. I'm just not keen on holding the bags again.
Better to turn him off than turn him on i guess kev3
No other miners for me either, this is more than enough stress to cope with.
Cant face any more dilution, late rigs or btc drops. Only surprises i want now is on Christmas day!
Hexam, I was pointing out the H1 2021 ebitda loss for MARA, but I agree with you that they may compute on different bases.
flowerpot999
Did that presenter just multiply the number of machines by their rank, in terms of hash/watt?
I turned him off after that, because that makes no sense in my head. I prefer Blonity’s calculations.
Anyway, I’m never going to invest in MARA. I’m happy here.
K3,
As just replied to argobull I was answering in terms of mining margin. On slide 18 of what you linked it actually shows MARA on 85% and ARB on 81% for H1.
In terms of overall profitability I think it is too much a case of apples and oranges for the reasons I gave to say either way. All I know is that ARB is very profitable and that'll do me for now.
Argo 10th in efficiency, mara 2nd
Next year argo up to 3rd
AB
It's always tricky to compare companies as they present things differently and there can be oddities and one-offs. It also depends on what is meant by 'efficiency'.
I assumed here that it referred to the high mining margin that ARB has.
In Q3 ARB mining revenues were $25.27m and 'direct costs' were $3.76m giving a margin of 85%.
It looks like the comparable figures for MARA were revenue of $51.71m and direct costs of $10.26m i.e. 80% margin BUT MARA include depreciation on machines in their direct costs and ARB do not. Once you strip this out to be on a comparable basis then MARA comes out on top.
If you are looking at all-in costs then the other comp you refer to includes $95m of stock compensation (exercising of options or similar). These should not be included in comparing numbers as clearly not recurring - at least to anywhere near that extent each year!
Also MARA in their total revenue do not include all the gains on BTC whereas as ARB do. MARA only include the gains on the BTC they have bought. On the mined coins they actually take the lowest value the coins mined reach after they are mined which can lead to impairments ($6.73m in Q3 on the link you gave).
So yes, MARA made a thumping loss for Q3 but I'd be wary of drawing any conclusions from this because of the above.
Don't get me wrong I think ARB is very efficient on whatever measure is chosen and it is clear that they are better than most - but MARA may at least give them a run for their money and in terms of mining efficiency they certainly look better from what I can see unless I'm missing something.
Most efficient miners
https://youtu.be/4u-iSdNNwWA