Bitcoin’s ‘Fundamental Value Is Not in Line With Market Price’ — Crypto Miner – Interview Bitcoin News

The founders of Bitcoin mining companies claim that profitable Bitcoin mining is essentially the result of an efficient and highly skilled team of professionals who can maintain run time. Therefore, even if the price is around $ 20,000, Bitcoin miners with these attributes can operate profitably.

“The basics of Bitcoin rarely change”

The decline in Bitcoin’s value from just under $ 30,000 in early June to less than $ 20,000 by the middle of the month was one of the factors that contributed to the collapse and bankruptcy of large crypto entities such as: Is believed to be 3AC And recently Voyager.. However, these two high-profile entities are not the only ones that are seriously affected.

In addition to having to deal with low prices, many market participants, including Bitcoin miners, had to deal with the increased risk of bankruptcy. As the 3AC situation shows, many market participants were or are still inherited. Another significant drop in prices can lead to increased bankruptcy.

However, for other market participants BTC Miner Permian chainIf the price of top cryptos goes down further, it is unlikely that it will have a significant impact on the company’s long-term plans. According to the founder and CEO of Mohamed El-Masri, a Canadian-based cryptocurrency mining company, the underlying value behind Bitcoin is what motivates them. El-Masri also told Bitcoin.com News via email that short-term price fluctuations in crypto assets and the accompanying media headlines alone cannot change the course of PermianChain.

Below are the remaining answers from CEO PermianChain to the questions emailed from Bitcoin.com News.

Bitcoin.com News (BCN): The continued downward trend in crypto asset prices has already led to the collapse of some major players in this area. There is no doubt that Bitcoin miners are also facing heat. Can you explain to the reader how Bitcoin prices below $ 20,000 affect miners?

Mohamed El Masri (MM): The over-leverage situation faced by some of the major Bitcoin miners is the result of global macroeconomic factors that have soared energy prices and put downward pressure on the equity and crypto markets. The main sale of cryptocurrency exchanges has been widely triggered as a result of vulnerabilities and, to some extent, has been forced to clear some or all of Bitcoin and other digital assets to cover its debt. The negligent payment of market participants.

Bitcoin prices below $ 20,000 do not guarantee the excellent returns that Bitcoin miners will experience above $ 45,000. However, most industrial Bitcoin miners are running a new generation of high efficiency ASIC equipment and can maintain profitability, assuming that electricity costs can be kept within $ 0.05 / kWh and $ 0.10 / kWh. .. Small miners, who do not have economies of scale and low-cost energy sources, are steadily mining below the break-even point. However, profitable Bitcoin mining is the result of an efficient and highly skilled team of experts who can maintain execution time even in the $ 20,000 Bitcoin market.

Don’t forget the difficulty adjustment algorithm, which is one of the important features of Bitcoin. This rewards miners who remain online during low market cycles when other miners turn off their equipment due to lack of profitability, defaults, bankruptcy, etc. The benefit is to stay online at the highest possible hash rate.

BCN: How did the fall in crypto prices affect the operation of Permian Chain?

Hmm: Hmm: The Permian chain will continue to mine Bitcoin, regardless of market price. Headlines and market conditions change, but fundamentals rarely change. The fundamental value behind Bitcoin is the purpose for which we are working on this business.

For mining sites, we have established a streamlined relationship with energy providers by implementing energy as a service and a Bitcoin mining platform to streamline our efforts. For example, Permian Chain works closely with Alberta’s energy producer and site manager Brox Equity to streamline a vertically integrated value chain. From on-site fieldwork to online software solutions, we can continue to mine and stay operational.

BCN: Will it be profitable for the Permian chain to continue mining even if prices fall further?

Hmm: Hmm: It all depends on what you think is profitable. If you’re talking about the value of the dollar to assess profitability, you probably aren’t. However, if you look at profitability from the perspective of Bitcoin, that’s right. In my personal opinion, the basic value does not match the market price of Bitcoin. The basics take time to be revealed to the masses.

If you have a 10-year outlook on investing in Bitcoin, I believe Bitcoin mining is a powerful value creator. It is also very important to recognize that as Bitcoin prices continue to fall, it is very likely that many miners will begin to close globally. If a sufficient number of miners shut down, it will put downward pressure on the difficulty adjustment. The lower the difficulty, the harder the mining process. As a result, this makes the miner more likely to win Bitcoin than if it were more difficult.

Difficulty measures how hard an ASIC mining machine needs to work to validate a transaction on the blockchain (resolves a block of transactions in exchange for Bitcoin as a reward). At lower difficulty, miners can find and resolve blocks faster, earning more Bitcoins in the same time frame with the same energy cost, and thus gaining more profit.

BCN: Permian Chain uses so-called low-cost energy from flares and leftover energy resources in data mining centers. Can you explain why the Permian chain chose to use this energy source?

Hmm: Hmm: Permian Chain is an energy platform as a service for computing infrastructure, starting with Bitcoin mining. We consolidate all energy sources into a platform and, through a tokenization process and the Smart Off-Take Agreement (SOTA), enable global energy producers to monetize and harness the resources left behind. .. We are focused on turning Bitcoin mining off-the-grid, but since solving it from an ESG perspective is the most important challenge, we started with natural gas as our first source of natural energy. This makes the solution very obvious. Use case.

BCN: Where are the geographic locations where Bitcoin can be beneficially mined using flared and stranded energy resources?

Hmm: Hmm: Each jurisdiction has different standards than regulations, labor costs, raw material costs, overheads, etc., so it depends on several factors. All of this affects the net electricity cost. We’ve heard a lot about low-cost electricity in certain areas, but it’s easy to guess that most of these so-called “opportunities” don’t take into account the other costs I mentioned. All of these costs need to be taken into account for a clear understanding of operating costs. That said, between $ 0.05 and $ 0.10 / kWh should be considered low cost, and I believe overall cost control is effective. Given that we are also off-the-grid.

BCN: Some environmental groups have stated that changing the Bitcoin coding is likely to eliminate the environmental impact. Do you agree with this argument?

Hmm: Hmm: Coding changes? What do you want to change from? I don’t think Bitcoin should change … it will continue to grow with adoption and only improve its efficiency through Layer 2 technology and improved new generation equipment. Companies such as Intel and Samsung continue to manufacture a new generation of chips that improve mining efficiency.

In terms of environmental impact, Bitcoin will continue to require mining “data center” facilities, just as the Internet operates in data center facilities that consume 2% of the world’s on-grid electricity. However, Bitcoin is the largest computer in the world and consumes only about 0.4% of the world’s electricity. Most are away from renewable and clean energy sources. The bitcoin mining trend is also leaning towards off-grid energy sources such as clean hydro, solar and perhaps responsiblely produced natural gas in the short term.

BCN: Can you briefly explain how the tokenization platform works?

Hmm: Hmm: Energy companies register themselves and their resources on our platform. Check your submission before approval. Once approved, the resource project can go through two tokenization routes. (1) Through a security token offering offered to accredited investors with the help of broker-dealers registered on our platform. (2) By issuing a Smart Off-Take Agreement (SOTA), a network of mining partners participating in mining pool aggregators can bet stablecoins on energy projects that are interested in deploying ASIC miners. This second process allows energy companies to get early support from miners and commercialize their energy resources by introducing on-site off-the-grid electricity for Bitcoin mining.

BCN: Both Africa and the MENA region (where solar energy looks abundant at first glance) still occupy a small part of Bitcoin mining. What is the reason for this, or what do you think you need to do to attract miners to these two areas?

Hmm: Hmm: In countries and regions like North America, where energy is primarily private, it is easier and faster to understand and implement innovation and new business models. The MENA region has nationalized energy resources. It will take longer for governments and regulators to pursue innovation at the same speed as the free market. If the MENA government publicly announces a regulatory framework for Bitcoin mining, we can expect an influx of miners and foreign investment from around the world. PermianChain allows regulators and governments to have a clear understanding of the project, enjoy low-cost adjustments and increase transparency.

What do you think of this interview? Please let us know your thoughts in the comments section below.

Terence Jimwara

Terence Zimwara is an award-winning journalist, writer and writer in Zimbabwe. He has extensively written about the economic problems of some African countries and how digital currencies provide an escape route for Africans.