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Modern Economic Nonsense — The Bitcoin mining company is not profitable

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Cryptocurrency mining is a complicated business. Apart from the ever-increasing operational cost, it is also capital-intensive. A mining company needs to purchase hardware such as ASIC machines, power suppliers, and other essential components. As the price of these items continues to rise, so does their cost of operation. Mining companies that cannot operate at an optimal cost or cannot secure enough mining equipment risk shutting down operations permanently. This is one of the main reasons why profitability has become a significant challenge for most cryptocurrency miners today. The profitability of a cryptocurrency mining business depends on many factors, including: 

* The price of electricity in your area 

* How much money you can invest in buying mining equipment and other operating costs 

* How much money do you earn by selling your mined coins 

Today’s high operational costs and low prices for cryptocurrencies have made it difficult for many miners to turn a profit. However, this does not mean you cannot start a profitable cryptocurrency mining operation without the right ideas and resources. Before starting a profitable cryptocurrency mining company, you need to know some useful insights.

What is required to start a profitable mining company?

A profitable cryptocurrency mining company requires a little planning before starting operations. This planning will help you to see where your profit will come from and what decisions you need to make as a cryptocurrency miner. You will first need to study the current market scenario and the price of various cryptocurrencies. If the current price of a coin is high, it will give you a better profit margin. You can also study the technical analysis of a specific coin to know if it is over or undervalued. Next, you need to decide the kind of mining equipment that you are going to use. ASIC machines are the most profitable, but they are also the most expensive to purchase, operate, and maintain. Therefore, they are being used by a small number of large-scale mining companies. GPU machines are much cheaper and can be used by anyone with a laptop or a desktop computer. However, they are far less profitable than ASICs and are not a good investment for a small-scale cryptocurrency mining operation.

Learn from successful mining companies

Some of the most successful cryptocurrency mining companies learn from their mistakes and adopt better strategies. This helps you to avoid some common cryptocurrency mining errors. – The first thing that you need to do is to choose a profitable cryptocurrency mining pool. You can choose a mining pool that provides you with steady payouts, or one with a higher hash rate, depending on your preference. – When you first start mining, choose a coin that has a high market cap and operates on an established blockchain. This will allow you to get your hands on more efficient mining equipment without spending much money. – Keep an eye on your operational cost, especially when the price of a cryptocurrency fluctuates. This will help you to avoid over- or under-spending on mining equipment.

Invest in the right mining equipment

ASIC machines are the most efficient and profitable way to mine certain cryptocurrencies. However, they are aimed at large-scale mining operations and are therefore not available to the general public. The more efficient a mining machine is, the more profits you will earn from it. Therefore, it is recommended to invest in an ASIC machine, which is designed for mining cryptocurrency. You can also choose to buy a paired combination of GPU and ASIC machines. This will enable you to expand your operation quickly and efficiently, depending on the price of the cryptocurrency that you want to mine.

Maintain high network efficiency level

With the number of cryptocurrency mining companies growing, it is important to maintain a high network efficiency level. This will help you to avoid losing mining power when your equipment stops generating profits. You should also regularly conduct maintenance on your mining equipment. This will help you to avoid a disruption in the mining process. Regular maintenance will also help you to avoid power shortages and network congestion, which are some of the most common causes of mining equipment failure.

Why unprofitable mining is a good sign

When mining companies dump their Bitcoin, the price will go lower, which indicates a good time to buy a solid price of Bitcoin. However, because there is no fundamental value to Bitcoin, its price will fluctuate randomly, depending on the market sentiment. Therefore, mining companies selling their Bitcoin will drive the cost to a precious level until the market realizes it is too cheap to sell. Such events only occurred four times in Bitcoin history with an extreme bearish sentiment. 

Conclusion

Cryptocurrency mining is a complicated business. Apart from the ever-increasing operational cost, it is also capital-intensive. A mining company needs to purchase hardware such as ASIC machines, power suppliers, and other essential components. As the price of these items continues to rise, so does their cost of operation. Mining companies that are not able to operate at an optimal cost or are not able to secure enough mining equipment risk shutting down operations permanently. This is one of the main reasons why profitability has become a major challenge for most cryptocurrency miners today. A profitable cryptocurrency mining company requires a little planning before starting operations. This planning will help you to see where your profit will come from and what decisions you need to make as a cryptocurrency miner.

Reminder: I am not your financial advisor. 

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Crypto Research

The Future of Machine War II

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In late 2021, I wrote an article about A.I. vs. Blockchain. I realized it was closer than I expected.

https://medium.com/@xuanling11/artificial-intelligence-vs-blockchain-the-future-of-machine-war-b685d208ba20?sk=874af90c7acbe857fa004c0ebe0d5e28

Web2 is leading a future of technological centralism. 

The way we see the world in ancient is what we saw became what we believed. Later, the enlightenment process helped humans realize what they had seen was disguised by the nature principle. Once we tested our assumption and received accurate results, we thought we had mastered the nature principles. Yet, we did not make the world better than we thought we could. 

We are living in a world in which companies know more than you than yourself. Companies can likely tell you what you should believe without letting you know. 

The secret weapon that companies like Google invented is A.I. or Artificial Intelligence. 

If A.I. can think like a person, it can easily replace you! Since companies got all your data, you freely offer them by using their free services, and they can replace you one day without you realizing it. 

Without all conspiracy theories behind what Google may or will secretly develop, A.I. reaching consciousness is … impossible.

If it does, Google has successfully made a human – dumb!

The most advanced A.I. – Tesla Autopilot Program cannot distinguish objects between humans and other moving objects during driving.  

Using technology makes people dumber than they think because it takes away your consciousness – the ability to think uniquely!

Blockchain is the future of decentralization.

We need a peer-to-peer system to regain consciousness and break the chain from Web2. 

It gives individuals the power to rethink information.

Think about today’s media; all information is filtered to offer readers without any surprise. News is data that Web2 selected specifically for you to read. 

We need a decentralized system so that you can receive unfiltered information and gives you a surprise that sparks ideas of imagination.  

Web2 is afraid of the blockchain because they are too big to fail. 

 They mimic the blockchain by creating a centralized node system – social media network. 

It is a net growing outward through a single point. Only the problem is that connection is facilitated by technology. And the biggest failure is such technology has a single point of failure problem. 

And they cannot escape the law of economics – the law of diminishing. So we will see Web2 grow slower due to the law of diminishing that they require more data with few increments of advancement through A.I. without any breakthrough because A.I. is a deterministic system that works with a lack of randomness. 

In Web2, they assumed everyone was stupid, and they offered solutions to everyone.

In Web3, everyone is good and should anticipate solving a problem together.

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Crypto Research

Financial sanction to mixers

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Have you heard about financial sanctions from the US on virtual currency? At least, I have not yet. But the US Department of Treasury has issued sanctions on two crypto services: Blender.io and Tornado Cash.

To clarify, the US sanctions on tools but not target specific entities or groups of people.

So why bother to sanction something that the government probably won’t be able to sanction in the first place?

What is a mixer?

A cryptocurrency mixer, sometimes referred to as a tumbler, is a tool for money laundering. The sole purpose of the invention is to make transactions untraceable.

How to mix?

Even crypto is pseudo-anonymous, but it is traceable through your wallet address. A mixer is a black box service to filter your traceable wallet address into the untraceable wallet address.

How to wash your money clean in the traditional way?

https://dimensiongrc.com/the-stages-of-money-laundering/

The assumption is you will not get caught at each stage, and then you place your dirty money in a bank through companies and use the funds to purchase legal goods like houses or luxury goods.

There are mature regulations and rules to stop you from putting your dirty money into banks.

Digtial money landury

https://www.eurospider.com/en/know-how/compliance/211-what-is-a-cryptocurrency-mixer

A Crypto mixer or tumbler is a service to pool dirty digital currency in their favor and redistribute it into designated wallet addresses or addresses randomly generated. 

It is a challenge to stop transactions because there is no entry point for law enforcement to stop at each stage. 

https://home.treasury.gov/news/press-releases/jy0768

Ultimate Mixer

Tornado Cash is the king of the mixer. Unfortunately, there is just no way to trace transactions anymore. It is a smart contract with zk-SNARKs (zero-knowledge proofs) that does not require revealing a wallet address during transactions and ghostly distributed funds without leaving any traces.

This tool is the ultimate weapon that the government has to shut down, or there is no way to prevent transactions.

In Conclusion

Let’s change the future – legally. 

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Crypto Research

Why there is not crypto banking exist

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We have always heard about cryptocurrencies, crypto exchange, banking, and trading platforms, but we do not really grasp the idea of crypto banking. Crypto banking is a contradicted idea. If crypto is to replace banks and give users full control of digital money, why do you put your crypto into the bank? The new research paper argued that there are risks for banks to adopt crypto, but they did it anyway.

Banks want crypto

Cryptocurrency has a rough road at the beginning and continues to experience a bumpy road ahead. The institutional investors were watching its performance. In early 2017, institutional investors had opportunities to adopt crypto, but they found out the return of the investments was less than traditional financial assets. Regulations were not a concern for some individual institutional owners, but banks were conservative at the time. As a result, some investors adopted it in early 2018 than banks did. Then suddenly, the crypto market took off in 2020, leaving many banks to regret their decision in 2017. Many banks set up their digital investment group to rush into the market and increase prices. Of course, many of their investment positions are instead of shadow positions. It is unclear how much they have been invested in and what vehicles they took to invest in cryptos.

Crypto Exchange

Crypto exchange is a bank-like platform for crypto. Banks offered a place to purchase fiat currency. Crypto exchange did the same duty as traditional banks did. Since there was a gap between the crypto and banks, the crypto exchange took responsibility and offered crypto services. The crypto exchange took off after 2020, and they left banks in the dust. Then, crypto winter came in early 2022, and banks again hesitated to enter the crypto and started denouncing crypto usage, particularly in the Defi area. But interestingly, they tried to find ways to get into crypto without being directly exposed to cryptocurrencies—hint: through hedge funds.

How much banks exposure to crypto

We do not know how much banks have been exposed to crypto. We learned that the big Wall Street players were exposed to the services of the digital asset through State Street of their $41.7 trillion assets. Some have been exposed due to Luna’s collapse and 3AC bankruptcy. But again, no specific dollar amount was provided. 

Survivors

Since the crypto winter, institutional investors have been cautious about crypto exposure. However, crypto exchanges are the winner again. They are exposed to crypto and take risks more than banks do. As a result, they likely will weather the uncertainty. Furthermore, there is no need for crypto banking to handle your crypto assets since many such services will not survive long in the crypto environment. 

Crypto is resilience

Despite its fluctuating price and unsecured assets, crypto is resilient to phase out any bad business ideas and bad actors in the economy who wants to or try to dominate the market but who transfers risks to users to believe they are the one who should take responsibility for their carelessness. Unfortunately, those business models will not survive long.

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