Member Info for Hexam

Fair enough but it is hard to judge what the post-Helios number is (before allowing for any change in difficulty). Will be interesting to see just how low it goes but it depends on how much closer they can get to what their EH should produce, how much they get in addition out of immersion, how much cheaper the electricity is, how much their fixed cost base increases (including from the cost of the new machines) etc. etc.

Should be quite a bit lower than $30k but difficult to see it going below $20k - though not impossible.

Already at that point (on a fully costed basis but before Helios impact).

FP - I think the short time between presentations just reflects the difference in time to put together the annual results and the Q1 results (which have a lot less detail). So I wouldn’t read too much into that - but you never know!

FP - Hadn’t forgot it’s shared but I’m not sure how reliable these hash rates are anyway so probably best to wait for the actual numbers.

Funny you say that about another pool as the same thought had occurred to me as to why the EH - if it is vaguely correct - is so low. Hard to see them moving away from Terrapool though.

AB - Tend to agree i.e. more likely as a store of wealth but with a bit more flexibility than gold.

@HarChris - Can't disagree with you. Indeed could argue further that as many companies income and outgo is linked to inflation it gives a more natural hedge than many other assets.

I particularly liked your comment this morning:

"The narratives around bitcoin are so disjointed because advocates use every possible angle to promote it even if one point is diametrically opposed to another."

At the centre of this is the global currency vs default store of wealth. It could possibly be one of these but I cannot see how it can be both.

"1.3 eh does about 4, 4.5 btc per day"

Actually I think it is over 5, but still not great.

"cant see Q1 results lighting up the Sp tmrw"

Agree - these will show a loss due to the fall in BTC in the first quarter (will be small though compared to how q2 is currently looking). Hopefully there'll be some good news regarding progression of new machines being installed, or something else, to help the mood.

Just guessing but as they're bringing miners on gradually perhaps they'll just update regularly e.g. with each monthly operational update. This is what others miners in a similar situation seem to have done.

FP - this was posted the other day about the switch on and near the end PW says they are now mining in Dickens County
and ahead of schedule. Is this what you meant or are you expecting something more?

https://twitter.com/argoblockchain/status/1524051852853055488?s=21&t=-T2-IE8T8YhJhnE5jyKOAw

"So I live in the unusual position of being able to see quite a lot of people coming and going."

All sounds a bit 'Rear Window'. Creepy.

And if you actually went out yourself you'd actually find busy trains, busy shopping centres...and busy cinemas.

“It’s Saturday tomorrow”

Not when it was posted - on Thursday.

AB - I don’t see how “See you at 70p tomorrow” is in any way ambiguous?

I disagree on the point about PW. From what I recall about how he was asked it was appropriate to quote the $5-10k as the answer. It was some of the rampers that then ran with it and took it for something it wasn’t.

"how long did you know about this"

Only spotted it today - when I tried to work out the mining costs in pounds from the margin they looked way too high but turns out the margin using pounds is not 75% which in turn seems to be because they are not updating the exchange rate for anything other than revenue. It's only the last month or two that it makes much difference as the exchange rate had been pretty stable before that.

There may be a good reason to keep the rate stable for some figures and not others but I can't see it - especially fixing it to November.

To be fair I don't think there's any subterfuge. The exchange rate thing just looks like sloppy work whilst PW's quote of $5-$10k for 'breakeven' I'm pretty sure relates to the direct costs only which as I tried to point out is reasonable in the context of considering at what BTC price it is still worth mining at - i.e. $10k is enough to cover operational costs now and it certainly was then. So I have no problem with PW when he used the $5-$10k but many misinterpreted it as meaning they would make a profit at this level (i.e. ignoring all the overheads).

That’s the problem. They’re not - apart from revenue.

HarChris - As I said, the costs per BTC should come down with Helios (and as you say if difficulty decreases).

It's hard to say how much though as there are so many variables. For example if BTC recovers then difficulty will go up not down. The new machines will mean more coins but the cost of those machines need to be allowed for as well and so the main impact will probably be from being able to spread the other overheads (unless they also grow substantially) over more coins mined and of course from efficiency gains including from immersion. The lower cost of electricity will of course help directly.

So maybe breakeven will as you say be as low as $20k per BTC once all this plays out but I think there are too many uncertainties to put such a number on it with much confidence. I'll just stick my neck out enough to say that it will be lower and by more than a little bit.

The main point of my post though was that the value of BTC is much higher currently than the threshold at which they need to even think about stopping mining which is good - though, more disappointingly, there seems yet another problem in the RNS numbers.

"no ill tell you my biggest concern, is the true cost of btc being mined per coin by all the miners, but i'm telling you now argo do not mint btc at 7k"

This is correct. Looking at the April numbers and the FY accounts the costs per mining BTC for ARB are approx:

$10k per BTC in terms of direct costs (electricity and hosting)
$10k per BTC in terms of mining depreciation (i.e. the cost of the machines - spread usually over 3 years, non-cash)
$10k per BTC in terms of all other costs (wages, interest, insurance, other depreciation etc. etc.)

So with BTC under $30k BTC they will post a loss on each coin mined BUT they are still better off mining as if they shut down then all the costs apart from electricity and a bit of the rest perhaps (e.g. if they lay some people off) will still continue anyway. So unless BTC falls below $10k or so it is probably better to keep going as at least some of the overheads are still covered and of course Helios should bring down the costs per BTC further.

One other thing is that I thought these numbers would be straightforward to calculate but when looking at the April numbers I noticed something odd. The tables each month give figures in £ and $ BUT after a bit of digging I found the exchange rate used has remained unchanged since November 2021. I think this is an oversight especially as the revenue figures given above the tables (also in both £ and $) DO allow for the latest exchange rate. This may sound boring but if you use the revenue figures given, and the numbers in the table, then the margin for April is 75% using dollars and 69% if using pounds. There should not be a difference and the reason it is so big is that the exchange rate has changed so much recently.

Which is correct? I think the 75% is as I suspect the dollar numbers in the table are correct as this gives more consistent implied mining costs, seems logical to start from $ as this is how BTC is denominated and I assume they have calculated their mining margin correctly! In which case the sterling figures in the table are nonsense and should be ignored. But it could be the other way round...?

"the SP is likely to drop to potentially as low as the IPO price"

I hope you mean the nasdaq IPO price as that would mean more than doubling from here. Would be very happy with that!

chae - but food and energy ARE included (unless I'm reading their very simple graph - and commentary - incorrectly)

"and 8% year on year. the reality however is that is much higher. the CPI cleverly excludes food and energy. let that sink in. food and energy, the two most important indicators"

I would let it sink in if it was true - but it's not. They publish figures with and without food and energy - the 8.3% includes them (it's 6.2% without them).

https://www.bls.gov/cpi/