simondixontwitt on Nostr: Analysis from @ChazzonKe Quoting @ChazzonKe: Let's briefly discuss the absurd concept ...
Analysis from @ChazzonKe
Quoting @ChazzonKe:
Let's briefly discuss the absurd concept that Fahrenheit is using a 6 year life cycle for ASIC units for BTC mining.
Anyone is capable of researching that the average useful life of an ASIC miner averages out to 3 years. While it's true the "useful" life can certainly be stretched to 6 years, the rigs become functionally obsolete.
An example of how technology evolves and makes rigs even 6 years old obsolete is easy to come by. In 2018 the average hash rate per miner was 23.3 Th/s, while in 2023 that has skyrocketed 743% to 196.1 Th/s
Celsius is already massively lagging behind their competitors. While the majority of competitors have managed to maximize the entire effective and efficient life of their S19J Pro's and equivalents over 3 years, celsius has languished and been unable to even get 50% effective use of assets while spending 100% upfront costs.
Coming in 2024 we have BTC halving, this means that effective rewards are cut in half. For example, coin desk reported in April the average cost to mine was $10,000 - $15,000; however, costs will double next April as the effective rewards miners receive for a successful block will be "halved".
The problem Celsius and Fahrenheitare going to have is the plan is highly unlikely to happen in 2023 and will be pushed to 2024. Celsius will likely be spending most of 2024 running their existing rigs and working to expand their infrastructure base; however, their RIGs will still be approaching 5 year old tech. While competitors are using 230 th/s rigs, celsius will be stuck with 100 th/s getting 50% of their prior rewards. Competitors are looking to only take a reward cut of around 20% as they upgrade; while Celsius will be eating the full 50%.
Even if BTC doubles to $60,000 in 2024, celsius would basically still be making barely $10 million in adjusted EBITDA per month and maybe a bit over $100 million annually as their rewards will be cut.
Below is two charts. The top is Average hash rate in Th/s from 2014 - 2023(estimated upto 2028) with Celsius current Th/s noted in yellow.
The 2nd chart is Average yield per rig per month 2014 - 2023 (estimated upto 2028).
In conclusion, Celsius is already massively behind the efficiency curve.
Quoting @ChazzonKe:
Let's briefly discuss the absurd concept that Fahrenheit is using a 6 year life cycle for ASIC units for BTC mining.
Anyone is capable of researching that the average useful life of an ASIC miner averages out to 3 years. While it's true the "useful" life can certainly be stretched to 6 years, the rigs become functionally obsolete.
An example of how technology evolves and makes rigs even 6 years old obsolete is easy to come by. In 2018 the average hash rate per miner was 23.3 Th/s, while in 2023 that has skyrocketed 743% to 196.1 Th/s
Celsius is already massively lagging behind their competitors. While the majority of competitors have managed to maximize the entire effective and efficient life of their S19J Pro's and equivalents over 3 years, celsius has languished and been unable to even get 50% effective use of assets while spending 100% upfront costs.
Coming in 2024 we have BTC halving, this means that effective rewards are cut in half. For example, coin desk reported in April the average cost to mine was $10,000 - $15,000; however, costs will double next April as the effective rewards miners receive for a successful block will be "halved".
The problem Celsius and Fahrenheitare going to have is the plan is highly unlikely to happen in 2023 and will be pushed to 2024. Celsius will likely be spending most of 2024 running their existing rigs and working to expand their infrastructure base; however, their RIGs will still be approaching 5 year old tech. While competitors are using 230 th/s rigs, celsius will be stuck with 100 th/s getting 50% of their prior rewards. Competitors are looking to only take a reward cut of around 20% as they upgrade; while Celsius will be eating the full 50%.
Even if BTC doubles to $60,000 in 2024, celsius would basically still be making barely $10 million in adjusted EBITDA per month and maybe a bit over $100 million annually as their rewards will be cut.
Below is two charts. The top is Average hash rate in Th/s from 2014 - 2023(estimated upto 2028) with Celsius current Th/s noted in yellow.
The 2nd chart is Average yield per rig per month 2014 - 2023 (estimated upto 2028).
In conclusion, Celsius is already massively behind the efficiency curve.