Bitcoin adopters more likely to carry hard cash: Bank of Canada

In a recently released episode of Anthony Pompliano’s podcast, Off the Chain, CEO of MiningStore, JP Baric made an appearance to talk about Bitcoin, the state of the cryptomining industry and what’s in store for the future. According to Baric, the mining space is going to be very different after 24 months.

“We’re going to have something like an internet boom, where there’s going to be so much capital in the space searching for yield. Once the vehicles and on-ramps are there and built for companies, everyone is going to want exposure to these assets.”

Baric said his business model primarily revolves around the U.S. dollar to TeraHash (TH) ratio, which represents the profit that each TH earns the miner. Currently, this ratio is at around $0.20/TH, but it has been as high as $100/TH before ASICs became mainstream. He also mentions how there is a 1-2% decrease in profitability per month for mining, and another 50% decrease after the scheduled halvings.

“Spending $40/kWh is where you can last in the market right now. We expect that to come down, but there isn’t much power available for less than $25, unless it’s very small and stranded.”

The MiningStore CEO further talked about how Bitcoin mining has the biggest economic incentive for miners, with over $5 billion in rewards last year. He stated that PoW coins capture the most value. Additionally, Baric said that PoS coins won’t have value, as they it doesn’t cost anything to stake coins.

“If you’re not spending real-world capital, creating jobs or using energy, your coin’s not going to have value. Deploying infrastructure, shipping machines across the globe, hiring all the staff, all these people’s time and energy and money is going into building these projects and the real infrastructure investments, into electrical equipment, into building, into land, into mining equipment, that makes a huge impact on a coin.” 

He also cited this as the reason for Ethereum’s better price stability relative to other networks, due to the support from miners over the past four years.

“We’re seeing this transition from gold-backed money to where now money is backed by oil. Oil is energy, we’re moving down to the next one — electrons. Every electron is going to back your cryptocurrency. Bitcoin is backed by these elctrons that we’re spending to secure the network, which is the most important thing top make scarce digital assets have value.”

Besides renewable energy sources like natural gas, the mining industry is also seeing interest from nuclear power plants that have extra energy which can be provided near-instantly but requires constant use. Baric also mentioned that there is unlimited energy in the world and that Bitcoin mining being painted in a bad picture was one of the worst PR plays for the industry.

“Energy cannot be created or destroyed. We have all this excess opportunity here that’s going to waste. We have an energy problem in the world — and that’s that there’s too much energy. There’s not enough technology to store it with [batteries]. Bitcoin mining is a new battery storage. It’s storing energy in the blockchain. It’s using that energy right where it is, and getting money for it today.”

Baris predicted that nation-states outside of the banking system, such as Venezuela, Brazil and Iran, that have oil but can’t sell it to the market, will start using it to mine cryptocurrency at scale over the next ten years. On the topic of a 51% attack, he said that the industry is growing too fast for an individual to acquire enough chips to perform such an attack and that it would be very difficult for someone to scale to that size without other players noticing and jumping in.

The post appeared first on AMBCrypto

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