The following tweet by Jon Sindreu set off a debate on Twitter, which I got tangentially involved in. This is a subject that I touched on some time ago (I believe), but I think I can succinctly cover my views now. Explaining Feudalism from the Perspective of a Peasant
Thank you for this write up. I have one follow-up (or perhaps an add-on): why doesn’t anyone talk about the capital costs of the Bitcoin mining network? I have heard the debates about energy input costs, but haven’t heard anyone point out that Bitcoin mining is extremely capital-intensive. My understanding is the special computers needed to mine for it cost about $10k (which is on average good for 0.5 Bitcoin) and have a useful life of about 2.5yrs. The cost to replace that equipment will rise with inflation over time. How can that be considered an inflation hedge? Curious to hear your thoughts. Thanks.
Hi Brian,
Thank you for this write up. I have one follow-up (or perhaps an add-on): why doesn’t anyone talk about the capital costs of the Bitcoin mining network? I have heard the debates about energy input costs, but haven’t heard anyone point out that Bitcoin mining is extremely capital-intensive. My understanding is the special computers needed to mine for it cost about $10k (which is on average good for 0.5 Bitcoin) and have a useful life of about 2.5yrs. The cost to replace that equipment will rise with inflation over time. How can that be considered an inflation hedge? Curious to hear your thoughts. Thanks.
One of the best takedowns of the crypto craze that I have read so far!