The end of 2020 saw the emergence of central weaknesses in cryptocurrency and bitcoin processor feeds as the appetite for digital bullion increased.
The explosion was accelerated by the introduction of the PayPal network, as well as the long-awaited endorsement from respected people such as Michael Sailor, Jack Dorsey and Paul Tudor Jones.
Corresponding price rallies and the usual awareness of people like Maisie Williams and the recent corporate buying from MassMutual continue to drive the price up around Bitcoin (BTC).
This wave continues to grow as the dynamics of operations drive digital transformation and it looks like 2021 will be an eventful year for the next chapter in the evolution of the Bitcoin network.
Let’s take a look at some of the key areas we can pursue in 2021.
Evaluating Bitcoin mines and comparing them to gold
Bitcoin mining has a lot to do with gold mining; However, there are important differences that must be explored in the difficult task of evaluating the performance of Bitcoin miners. For this example, we’ll focus on the Riot blockchain, an American Bitcoin mining company headquartered in Colorado.
Riot started mining in 2017 and recently announced plans to increase hash rates with the expectation of mining deliveries in Spring 2021. Riot currently has a hash rate of 1.5XH / s, which is roughly 1.11% of the total Bitcoin network. Current speed is 135 EH / s.
The company mined 224 BTC, according to its third-quarter earnings released on November 9, which represented estimated revenues of $ 4.1 million to $ 18,500 per bitcoin.
With the numbers above, investors are asking: How can a company justify a $ 670 million market value with only $ 8 million in revenue and huge operating costs (electricity)?
Even with more than 1,000 BTC on the balance sheet, which is $ 18.5 million at today’s BTC price, the valuation is very stretched to say the least.
This is where two considerations come in that could justify Riot’s higher market value along with other cryptocurrency workers, provided the network moves further into a bull market.
Waiting for price hikes in the future
You don’t have to dig deep until you find a wide variety of optimistic Bitcoin price targets within a year from now. The range ranges from Mike Novogratz’s estimate of $ 65,000 to $ 288,000, which PlanB suggests based on the reserve model to the popular capacity.
Meanwhile, CitiBank recently requested $ 318,000; The Winklevoss twins offered $ 500,000, and Ark Investment CEO Catherine Wood appears to agree with the latter.
These price targets are the reason miners were stuck in a bearish cycle in 2018 and at times worked at a loss. They expect the network to emerge in the foreseeable future. Miners also know that there is an opportunity to act as network transaction auditors, and the continuous increase in network segmentation speed shows that Bitcoin is becoming more secure and competitive every day.
The poor value of 224 BTC expanded by Riot in the third quarter could have expanded its revenue stream to a larger and more controversial figure if no cap on Bitcoin had been set. This means that an estimate of Rio’s earnings will not be relevant if BTC sees another equivalent rise, although the current estimate is meaningless as to the ‘lift costs’ of Bitcoin mining and the amount of BTC extracted.
The scary aspects of protecting bitcoin miners are the low barrier to entry and a highly efficient and competitive job network, which Michael Saylor called the Nest of “cyber piracy”.
Anyone can dedicate their computing power to Bitcoin mining, albeit with very little likelihood of successful block mining and being the first to decide the hash algorithm.
As the hash rate increases, the two miners are combined with increasingly powerful hardware to have the best chance of successful block extraction. While some of them could theoretically start mining, you won’t get far if you don’t have Bitmain’s latest Antminer S19, which won’t be available in stock until April 2021.
The last time Bitcoin entered the parabola was in 2017, when ASICs and other mining processes were in short supply and sellers such as AMD, Nvidia, and Bitmain were unable to meet the demand.
If this situation arises again with Bitmain and MicroBT, then all miners who currently own next-generation hardware will have the upper hand until more devices become operational.
On the contrary, gold prospectors have a proven source of minerals underground. Gold miners need both proper soil digging and moving equipment and land rights as a barrier to entry into the gold mining market.
If the price of gold doubled to $ 4,000 an ounce, exploration would increase and the rate at which gold was extracted from the ground would increase. This, in turn, will destroy the activation energy of H.