Member Info for Lottohopes

Navier’s engineering team designed and built one of the preeminent miner hosting facilities in the USA— a “25MW design that scales to 400MW. This design provides for optimal cooling of ASIC and GPU miners at outside ambient temperatures over 100F, with PUE’s in the 1.05-1.07 range.” : Kentucky facility designed by Navier. That is a staggeringly efficient Power Usage Efficiency. Studies on data centres have shown the average PUE to be in the 1.6 range. DYOR.

Yuyus: good question; what is the incentive for miners to maintain the network, apart from “new” bitcoin they earn? From what I read, the bitcoin network could work as an “interchange” network, ie enabling borderless transactions. It already does and right now that % is about 10-15% of total daily coin earned by miners. (Circa 1000 bitcoins earned per day, 900 coins are “new”). Secondly bitcoin if viewed as an asset could allow lending (note several big banks are looking at mortgages/lending vs cryptocurrency collateral). HUT8 gets interest of 4% for its bitcoin from Genesis. So apart from HODLing, utility is emerging. I m still reading up on this and happy to be corrected by anyone well informed. DYOR.

Durban holdings is in NFT (and I think Cellular Goods). So not too far fetched to imagine all seed investors selling out to re-allocate. It’s worth remembering the arduous journey they had, from a ?16p IPO listing, into single digits, the decimation of bitcoin and then back into triple figures. I had a 5k top up today. It’s above my average but given the news flow I expect ahead, why not. I have held other shares where share price has baffled expectations. Sentiment matters above value and if the market was so efficient, how would we find any investable opportunities? I recollect HZM getting smashed when 2 early cornerstone investors sold out. This stuff happens and it’s a good test of ones conviction, ones depth of research. Its almost inevitable in crypto given the early stage we are in, imho. It’s also an opportunity if one has patience. If I find myself shaky, I read more. That’s my humble mantra.

Bully: the last annual accounts mentions that the group has £8.728m in losses carried forward, which can be adjusted against future profits. Also as Wolf states, producing a coin (which is seen as a commodity by N American jurisdiction, as opposed to a currency) means they don’t pay tax unless/until they convert to fiat. That was my understanding, BUT this must be wrong (note PW answered my Twitter question in today’s Q&A session, saying there’s no tax advantage to holding coin vs fiat). In any case big losses to offset tax bill.

https://www.coindesk.com/epic-blockchain-manufacture-asic-crypto-miners-north-america?amp=1&__twitter_impression=true

Join the dots. Do your own reading. Ignore the noise. Good luck all

Ratherbelucky: Bit disappointed with your down grading lol On a more serious note, running a mining op has been likened to actively managing a portfolio. So we may not be passively holding our coins for ex. We could trade a chunk or leverage in other ways, ex: borrow against those coins in the future etc. PW has mentioned they are looking at other coins, nothing stops us from having a diversifying strategy, other coins mined/HODLed, to protect ourselves from next bitcoin halving and bear run (if indeed it occurs, I m not convinced it will to the extent of previous cycles). ARB is a block chain co not merely a bitcoin miner and I fully expect this to be unveiled as the year progresses. Imho only

Ratherbelucky: this is a tricky aspect. So many moving parts namely new hash power added (which leads to increases in mining difficulty), older machines coming back online if bitcoin price rises/stays high. In essence every miner has to keep adding machines to just stay where they are (in terms of % of total). BUT the differentiators for ARB are the efficiency, how that’s achieved (our own proprietary software) plus Luxor collaboration. Then there’s other value adding initiatives like buying data centres, Texas, Pluto etc. I also think this is the time to plan strategically for next bitcoin halving, how to transition from proof of work to proof of stake etc. All above my own view points. Please DYOR

What figures say it all? The projections of profitability for full year 2021, with mining difficulty staying where it is? How many share consolidations has MARA had?

Mara investor presentation spoke of the projected revenue for full year 2021, with some assumptions: bitcoin mining difficulty staying the same and MARA hash rate as % of total rising, so coins mined rising steeply. Both are ridiculous assumptions that insult investors intellect. I prefer an ARB that doesn’t project revenue or profits because they understand the space is volatile, that there are several moving parts and the margin or coins mined etc cannot be predicted accurately so far ahead. Please DYOR.

Jimbo: my understanding, the purchase in Texas was of a company that owned the land WITH plans to build a facility, the plans having been in the pipeline for years. (PW mentioned this in a recent interview). If they are adding machines onto the new facility from Sept onwards, it’s not merely on paper and appears to be more advanced. As always until clear news arrives, market discounts it. I like the fact that the negatives are priced in (2 dilutions in quick succession, warrants/options). Also share price has absorbed a large share swap (between Timins and the new ETF) during these dilutions. Even if bitcoin stays at 55k next few months, the margins are staggering.

On an unrelated topic, I asked the company what options were there in terms of leveraging the HODL bitcoin? They have responded saying all options are being considered with due attention to regulatory issues. If bitcoin replaces fiat, it can be leveraged exactly the same way. Why not avail loans with that coin as collateral and expand further? Or convert into say ETH for use in DeFi? Pluto holds a chunk of different coins and might use our coins as a spring board. The possibilities are endless, and in any instance better than fiat rotting in a bank account with 0.1% interest rates. Imho only.

RC: great summary; if I may add the total cash position is unknown, but includes the £22m raise in Jan, circa £6m via warrants/options, the 26m raise few weeks ago. On cash expense side, we paid £8m (1+7) to get a 25% stake in Pluto. We have also paid a chunk of cash to DPN LLC for Texas, and $8m for an undisclosed number of miners to ePIC.

One more growth thread-in a few years, the revenue share will increase proportionately from stake vs work. Currently about 100 coins are transaction fees vs 900 NEW coins per day. (Ie approx 1000 coins earned by miners per day). Holding a large number of bitcoin will lead to bigger revenue. ARB’s strategy in previous annual reports is to transition from Proof of work to Proof of stake eventually. I have no doubt they are on their way on the map.

Nice summary MiniCheddar, thanks for sharing. I would add a few points:
Immersion mining rigs are a completely different beast-superb efficiencies in power consumption vs air cooled machines; and the chips can be overclocked, ie run as fast as possible with zero risk of burn out (so hash rate gets maximised).

The ARB team has a solid PR strategy, which cannot be underestimated in attracting new investors and retaining existing ones loyalty (esp when there is a lot of choice to pick from).

ARB is well aware of the perceived cyclical nature of bitcoin and will be hedging via other investments, in anticipation of any investor sell off in Sept-Oct 2021 when the world and its dog expects bitcoin to peak. Peter has mentioned preparing for the 2024 halving-a very forward thinking company. The wider block chain strategy is yet unannounced imho. This will include some contribution from ePIC too. I can see us mining other coins and independently participating in DeFi projects (apart from input into Pluto).

A few other revenue streams which may get upscaled (we agreed to manage some 4000 odd machines for another miner last year). We have share options in GPU.

I imagine we will be involved in other block chain projects in Texas, given the state’s ambition to be a powerhouse in the tech. All in all, plenty to hold for. Just my musings...DYOR

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/492972/gs-16-1-distributed-ledger-technology.pdf

Old report from 2015, but I found the author’s (Chief Scientific Officer) opinion on bitcoin quite interesting. To me it demonstrates that people in key positions have acknowledged the nature of bitcoin, regardless of what Govts were saying publicly.

“Bitcoin is an online equivalent of cash. Cash is authenticated by its physical appearance and characteristics, and in the case of banknotes by serial numbers and other security devices. But in the case of cash there is no ledger that records transactions and there is a problem with forgeries of both coins and notes. In the case of Bitcoins, the ledger of transactions ensures their authenticity. Both coins and Bitcoins need to be stored securely in real or virtual wallets respectively- and if these are not looked after properly, both coins and Bitcoins can be stolen. A fundamental difference between conventional currency and Bitcoins is that the former are issued by central banks, and the latter are issued in agreed amounts by the global ‘collaborative’ endeavour that is Bitcoin. Cash as a means of exchange and commerce dates back millennia and in that respect there is a lineage that links cowrie shells, hammered pennies and Bitcoin.”

...more people might start getting paid in crypto’s?

Ironically the fact that bitcoin is not afforded “currency” status might be a blessing for tax purposes. Just my musings...

Glasir/Theprophet: crypto is viewed as a “commodity” not currency in Canada. Is there a possibility we don’t pay tax on the coins HODLed? Because the tax issue arises at point of conversion. Where is our tax due? If it’s the state/country in which the mining takes place, could Texas be chosen given it’s favourable laws?

By the same token, is there tax efficiency in earning salary in bitcoin? If there is, more

Just a point on doing the numbers and projecting coins mined. THe % increase in hash rate doesn’t necessarily correspond to similar % increase in coins mined. Because total network hash rate is a variable. So let’s say our hash rate was 1EH whilst total network was 100EH. Then our hash rate rose to 1.5EH. BUT at that point, total network rate rose to 125EH. In reality our mining % changes from 1% of total to 1.2% of total. By the same token we could do nothing and our EH capacity as a % increases given a chunk of miners in say Mongolia are shut down. So for H1, the good news is not much new hash rate coming in ie difficulty and hash rate remain here whilst our capacity increases.

Xenor: bitcoin “dilution” rate halves every 4 years. The next halving produces a real supply crunch. Plus remember ARB intends to move gradually to Proof of Stake from PoW as new coin supply diminishes. Secondly there is a steadily increasing “transaction” fees being paid to miners (paid in bitcoin). This fees is for miners maintaining their share of the network. As revenue from PoW decreases, the revenue from transactions should increase imho. Then there’s “revenue” from holding a chunk of bitcoin. It’s a digital asset which I imagine can fetch interest, be used to loan against etc etc. It’s an evolving space and the most important binary question asked is: will it survive or get crushed by the current corrupt system? Those LTH investing here believe it’s going to thrive. Those on the fence are entitled to their views.

So many arm chair CEOs here. The crypto space is fast paced and one has to go by one’s instinct and own reading. Good luck all :)

No offence meant Harry :) Ramper or De ramper, as I said before there is no substitute for ones own research. Its easy to be upbeat when bitcoin is pushing 56 or 57k. The question one must ask is if one has the proverbial b a l l s to hold if bitcoin drops say 35% overnight or if ARB follows suit. Every question that challenges or supports the case to invest must be examined thoroughly. Only ones own reading will give one the conviction in such times, in my experience.