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my brain hurts
ROFL
You’ve obviously not read what I said and understood it properly John.
I’ll try and simplify further later.
Query, scotties maths is a little suspect, for ARB to maintain its percentage of mining it simply has to increase its hash rate equal to the increase in total hash rate. Ie if total hash rate was 1000 and ARB was 10 percentage is 1%, if total hash rate doubled to 2000 ARB would need to double its mining capacity increasing hash rate to 20.
Qwert, it’s relatively simple but more related to the growth in overall hashrate over a two year period.
A simple general example is imagine that you are starting up and have enough cash to buy X amount of hardware. The growth of overall hashrate is Y times per year. You buy these X machines at the start of the year. By the end of the year they are generating 1/Y times BTC they were generating at the start of the year. So to recover this you need to increase your machines by Y times. But by the end of the second year this will again reduce by 1/Y and you need to have Y^2 machines to recover this. If you didn’t invest Y^2 at the end of the first year your growth wouldn’t be sustainable to meet the growth in hash rate and you would eventually fail to keep abreast.
This can be eased by continually reinvesting. This if machine payback is every 4 months and this is immediately reinvested growth can be 8x per year.
Why the square? ARB has no chance in hell of doing that. It will be lucky to even double hashrate from now to a years time. Does that mean ARB is screwed in your opinion?
In order to maintain you share of the mining, you need to grow your mining rate at the square of the growth in the overall hashrate. Which is very difficult to do if the hashrate tripples in a year as it almost did in 2019.
Looking at how difficulty is rising relentlessly I’ve cut my expectations on the SP from 25p this year to 12-15. If it continues the way it’s going I suspect ARB will not be as profitable I as expected. I think a profit of around £8m this year is my revised expectation which would still be an excellent result. Probably is that would buy another 10,000 T17 machines only and I think we need to grow faster than that. If BTC suddenly explodes in a short space of time that would have a very positive impact on profits. Maybe ive been too conservative but time will tell
Reducing the shares in issue whilst the SP is low means it will fly much higher later on. We need a mix of new machines and share buyback. If the share price goes to where it should be then no need for a buyback as little value added for SH
Can’t understand why peeps want a share buyback. Might raise the sp slightly for a one off but doesn’t help the long term sp growth.
ARB should carry out a RRE type share buyback at 7p for those who want to sell out to clear the sellers.
If Bitcoin gets to 10k and the share price is still at 6.9p then this it’s starting to look like a Joke.
I've bought into BTC itself as if it follows the chart of the previous couple of halvings then it will fly, which should of course benefit ARB but like Tyrion has noted, holding BTC itself you don't have to worry about ARB internal company factors like potentially Mike selling some shares. I have though recently bought into ARB as well just in case BTC doesn't go up as I hope. Either way in a years time I believe both investments will be highly profitable.
Good luck all genuine long term investors.
We could buy more machines and have double the capacity, more machines = 6.9p.
I really wish I had invested directly into cryptocurrencys! I was thinking of doing this 2 months ago. With the amount of shares the original investors have and keep selling this seems destined to go nowhere. As discussed in previous posts the board need to address this and Shareholders will be asking questions come AGM time if the share price is still here.
A holding like his would surely be placed with institutional investors and not dripped into the open market so to speak. That’s if indeed he is selling...
I think Mike must be selling his shares, imagine we might have a few TR1`S soon showing this !
yes but we could buy more machines ;)
It would still be 6.9p
Wouldn’t bet on it ;)
BTC at $100k will get the SP moving.
I agree to an extent. Mining difficulty is rising rapidly but that is due to the rising BTC price. It also depends on power costs. There is no point bringing a 1 GW mining facility online if it loses money. I think ARB need to introduce a share buyback scheme of maybe £1m per quarter and use the rest of the cash to expand mining capability whilst also looking at ways to reduce costs. I would prefer a BTC price of around $12000 post halving which would crash the hash rate as mining would be loss making for many miners.
Hi John, that's good to know and certainly strengthens ARB's hand. Though personally I doubt it will be as long as 3 years before better rigs comes out. However ARB's models should see them through as least the next BTC bull run (fingers crossed) over the next couple of years which is the main thing.
Woody your research is a little flawed, for starters the new s17 models are set to be standard for the next 3-5 years. Also a lot of miners are using machines with the old 16 nM chips. ARB 9 nM
ARB are just about now at their peak of 600 petahash. This with current hash rate difficulty and current price of BTC equates to roughly $2.7m profit per month, or $33m per year (this is profit minus electricity costs - doesn't include ARB's over costs). Whilst this is fantastic, there are certain other factors to consider. 1/ Competition - there are a few really big new miners entering the arena - SBI/GMO for example are looking to open in Texas a 300 MW mine rising to 1 GW by end of year (there is another similar once also opening). They are investing $150m in the mining operation. ARB's total MW is 65. What this competition means is an increase in hash rate difficulty. The hash rate has risen in 1 year already from 44m TH/s to 110 M TH/s). This will only increase further which means you'll get less btc for your mining power. 2/ Halving due in May - this will drop the bitcoin reward in half from 12.5 BTC per block to 6.25 per block. Again less BTC for you're buck. 3/ Continued renewal of hardware cost will be needed. There will be newer faster mining rigs coming on the market every year, ARB will have to invest in this new hardware to keep pace with other miners.
Now on the plus side BTC price normally increases before halving (I'm expecting about $16k BTC by April) and often goes on a bull run after halving. ARB also have very efficient energy costs. What all this means is there are a few factors to consider when looking at ARB. If, as I suspect BTC to get to ATH again this year, and beyond the year after, then ARB will do very well. How well will depend on continued expansion from ARB, competition and how high BTC will go.