Topic: Binance Provides $500M Loan for Bitcoin Miners (Read 788 times)

ok lets use another example of a benefit of a bitcoin collateral backed loan on a 24month hold


imagine you have 1000 asics (140thash each at 3kwh each)
(140petahash for 3mw)
using efficient electric contract of 4cent /kwh
$40 an hour for a 2 year contract is $700,800
meaning if you traditionally had to pay upfront the contract to lock in the kwh needed to run those asics for 2 years
you would normally have to sell 35+ btc upfront.. never seeing that coin again.. its gone. the electric company keeps all the fiat

however. by doing it as a loan. you instead escrow/lock that 35btc and
binance pays your electric bill with fiat

and in 24 months (loan fiat=840960with 2x10%)
if the btc market price is say:
$25k : binance owes you 1.5 coins back. meaning its made your electric even cheaper
$30k : binance owes you 7 coins back. meaning its made your electric even cheaper

yes if the btc market price stays below $24k then you owe binance more
but if the market price grows above $24k then binance gives you a refund of some coin..

however selling coin to then go to a normal fiat lender and then lock it up as a fiat collateral or make monthly payments.. you lose. so no going to a fiat lender is never a good idea. you might aswell  just pay your bill interest free, rather than using a fiat lender.

however a btc lender allowing for a collateral loan in btc has some benefit(as long as the market price grows by $5k amount in 2 years)

..
personal note.. i never take out loans. i live within my means and i am not advertising binance. but just explaining its not a 100% negative proposition for some users that afford the risks if they have done the research to understand the risk:reward potentials

i wouldnt recommend loans. but binance is offering an option thats better than a fiat establishment loan

Bitcoin mining costs a lot of money due to which there are no coins left to mine. Binance then gives loans to bitcoin miners so that they don't have any financial problems to mine bitcoins. They know that Bitcoin mining consumes a lot of electricity and various other costs that make Bitcoin mining unprofitable. That's why Binance helps them to mine bitcoins by giving loans but later they have to pay back this loan. So Bitcoin mining takes huge amount of loan from Binance.

Binance setting a loan for Miners is not bad. Of lately, it has been bear market and Price of Bitcoin is on the decline which has affected the Miners and investors. This loan would help them get back on their feet to continue the mining and also cushion the adverse effect they already have.
Never the less, $500 million sounds enticing but this is a bear market and we all know making profit as a miner is very miniut and there's no assurance or possibility of recovering the loan within the stipulated time interval as stated by binance. What I think and suggest binance does is to extend the repayment time for the loan so that Miners can confidently go for the loan without any fear as they would have time for repayment and also be able to manage the available resources they have gotten.
No doubt this loan would help them go along way in getting more equipments needed by them and for those already packed up as a result of lacking in one way or the other, they too can be able to have access to the loan for a restart with more sophisticated equipment which will aid boasten their mining capacity and setting them for more profit when it is bull market. So I urge every miner wanting more equipments for their mining activities to make use of this opportunity binance has made available.

Even if Binance confiscates their ASIC miners in 18 months from now, is that such a big deal?

I mean, we know that due to Moore's law transistor count is doubled every 18-24 months, which means that even cutting-edge microchips become obsolete pretty fast.

Binance can have 5nm ASICs if they want, but I reckon they won't be very competitive in a couple of years compared to 3nm chips.

Am I wrong? Unless they ask for a more valuable collateral (like your house, for example)...

ASICs are temporary, everyone knows that. Nothing of value will be lost.

You wouldnt really be that dumb on taking a loan on something which you dont even know that you could really repay it on time or due date.
So if you dont really like to mess up even more or being buried with deep debts then better not to take such step if you are a miner
but if you do see that it would be having some significant impact then towards your mining not in terms of technical aspect
then you could take the risk but of course you should consider the risk as well.

I came across this news yesterday when I was going through one of my crypto apps.
500 million dollars is no joke, that's a hell lot of money, but I honestly doubt that the miners will seek to take out such a loan, we are currently in a bear season and every experienced miner knows that mining is mostly unprofitable during a bear season like this, take out a loan to keep mining will only result to even more loss, so personally, if I was a miner, I wouldnt even consider taking a loan at this time.

I may not fully understand how this fund will be put to use considering the current market situation. I know some miners made huge fund during the heavy bull run from $3.5k to $60k is not a joke, maybe it's for new miners or miners who failed to envisage these days. There are nations with very cheap electricity and miners can choose to go Solar thereby cutting electricity cost by over 90% or more.

You need it if you want zero fees -> max sat stacking.

No. You really do not need a centralized exchange to trade, buy, sell or transfer your coins. This is an absolute bullshit comment. There are much better ways to buy Bitcoin or other coins and trade said coins for other coins. We absolutely do not need centralized exchanges just like we do not need banks.

They are the lazy man's (or woman's) tool. Its easy to use a centralized exchange to buy Bitcoin from your centralized bank account. Thats why people do it. Its easier.

You could just as well use a decentralized p2p platform like Bisq. Or you could even buy with plain old cash. In some countries you do not even need to worry about giving anyone your identification when buying Bitcoin unless its an absurd amount.

So why would anyone "need" a centralized exchange?

But you can't deny the fact that there are many crypto users who are benefitting the services of centralized exchanges.
Not many are only using decentralized apps because at one point, you also need the centralized exchange.
However, storing your coins is another story. It depends on you if you will store your coins on their exchange or store it in your own wallet.
This initiative may benefit binance but just think of miners who really want to get a hold of these funds.
It will be a win-win situation for both sides. Just keep in mind that we need bitcoin miners for the bitcoin network to survive.

Im with these words which are totally that accurate.Most people who doesnt really have the idea on how bitcoin recognition and mining works would really be totally sympathetic on what Binance had been done or

been doing which it would really be having the impressions that it is really indeed good for the network or something that do really helps out this ecosystem without even realizing that Binance is just doing it

for sake of making profits which i could say that its normal to a business on having this kind of methods or ways but it is somewhat really that too exaggerated on making up some buzz
or attention seeking kind of steps or movement.

Binance is no saint. They are definitely doing this for the money.

I do not trust centralized entities like crypto exchanges. Their existence is completely redundant and they go against the very principles of decentralization. crypto exchanges are the enemies of decentralization. Storing Bitcoin on an exchange wallet is not safe. The end product resembles a government regulated lock-up of our money. It's dangerous because it means your coins are no longer in your control. If you live in a country with an oppressive government; they will simply confiscate your coins for whichever reason they like. And crypto exchanges in those countries will not hesitate to give them access to your coins while freezing you out of your account.

current gen asics are 140th for 3kw

hashrate is ~280exa = 2m asics of current gen

meaning of the 37.5btc/hour..
is 0.00001875 an hour per 140thash asic on average
=$0.36
if you have electric at 10cents /kwh = 30cent for 3kwh

thus 6cents an hour to go towards the hardware/profit
which spread over 2 years is only $1k. thus doesnt cover hardware cost

the bitcoin price would need to be ~$35k to break even for electric and hardware cost.. at electric cost of 10cent/kw

at 4cent /kw the price would need to be $23k to break even for 2 year break even for hardware and electric

so right now. miners would not want to spend good bitcoin of their own to buy hardware, because right now buying hardware using their own money is a bad deal.

but taking out a loan where there is no "payments" at all for 24 months. but knowing the deflationary nature of bitcoin. by locking up X btc as collateral. means. that by causing a hashrate competition push, will help push the underlying value of bitcoin(because those with low costs will have raised costs so stop being willing to sell for cheap prices)
which will push the price up making it profitable to mine over the next 2 years, and when the 2 years are up and they have to pay up, the price should be more then the pre-requisite amount thus the number of coins they have to surrender is less than how much they would lose now by buying now

oh and taking out a normal fiat loan using a normal bank loan.. well that does require monthly payments during the 2 years rather than a collateral lock for 25 months. so a normal fiat loan even at 5% is a bad idea because you are still having to spend out your own money sooner rather than later
..

I don't recommend BTC ASIC mining to anyone.

Everyone is here to make a profit. Nothing wrong with that.

That sounds like hyperinflation/hyperbitcoinization to me.

It poorly calculated risk!
Why take a long at 10% interest rate when you could simply take a normal loan from a bank at 5% and buy directly bitcoin if you think it will increase 10x times?
Oh, wait, why even bother mining at a revenue of 6cents/ths when you could dump the gear and buy coins directly?
This is just another profit-grabbing scheme from Binance that will put into bankruptcy everyone who falls for it.


Because they themselves are not stupid, they look for stupid businessmen!


You actually believed that PR crap?
The news is from 2021 , so it was supposed to happen this year and as you can see, forget about mining with green energy, they were actually setting up a LNG import terminal:
https://www.offshore-energy.biz/bw-tatiana-fsru-in-1st-sts-lng-transfer-in-el-salvador/


And following this logic, if one satoshi reaches 1 million, how are you going to get your change when buying not a coffee but a car?  


Don't post crap like this, where did you get your numbers, January 2009?
Current revenue per TH/s is  $ 0.0663, in order to get 37$ of revenue you need around 550Th/s per machine.
And S19(95) at 10 cents kwh making $6.2 while burning $7.8 in electricity so you're not making money you're losing money!

For those asking how much one can generate with this ASIC Bitcoin mining equipment, you expect the profitability of around $12 daily with an electricity cost of $0.1/kilowatt.
I love this Antminer because of its less power consumption and generating a good revenue of about $37.

the S9' s were popular in 2016-2019. but most established miners sold off their s9's as second hand cheap hardware for altcoins like the nch bsv in 2018-9 around the same times as the china drama also.. most of bitcoin is now on the s17-19 range

this year there has just been a delivery of lots of s19 which since september has helped to push the hashrate above the 200exa range. and by january with the next batch in november-december should see a hopeful push to 300exa+. all aiding the hashrate competition to move forward from its slump of the last couple years tailing off at 200 average for a LONG WHILE

this push of the hash competition means those still stuck on older gen or wanting to expand current gen asics an opportunity to catch up/overtake rather than be left behind

yes this push will see the small hobby miners with high electric drop of out mining and instead become buyers of coin. as it would be the cheaper option. but this is how the cycles work

when the price is low people prefer to buy coin. when the hash competition starts more switch to buying coin. then the price rises because of that.. and the price rise eventually make mining profitable again for the inefficient miners to start mining which pushes the hashrate higher even faster. which then causes the underlying value to set its new non zero higher value.

some people see the current situation as the 2013-2017 slump of stagnated speculation. thus delaying the deflationary value rise. so trying things to tickle and trigger more movement sooner is a positive, without it being just speculated social drama.  but a value rise due to fundamental hashrate cost competition rise, which is another positive

..
anyway. if i was to become a miner again. i would not use my own coin to buy asics. id prefer to take out a loan that locks up some of my coin as collateral. where by its not actually spending my coin. but putting it into a lock for 18 months.. and when its time to pay up in 18 months. they hand me back some some from the lock rather than it diisapearing and then owing them more.

Rich people get the most benefit from taking out a loan.

Poor people are enslaved with debt chains.

Everyone's response is definitely different to this loan offer offered by Binance. and of course Binance offers these loans on the basis that they make a profit for themselves. and there's nothing wrong with that. but I don't expect that many miners will be tempted by this offer. because borrowed money always carries a greater risk. because when we do not know whether we will gain or lose. But interest and borrowed money still have to be paid when they fall due. it doesn't matter if we are in a loss or profit position.

but maybe there will be some parties who also feel helped by this loan. namely for those who wish to maintain their mining operations who are experiencing financial difficulties. because sometimes there are situations and conditions that force us to take out a loan.

In general, ASIC miners are only created for certain crypto assets, so if ASIC Miners are Bitcoin they can only mine Bitcoin.
Simply put, an Application-specific Integrated Circuit (ASIC) is an integrated Circuit Chip that has been specifically designed for specific crypto mining purposes.

ASIC chips used in mining crypto assets are becoming more efficient, with the latest generation operating at around 29.5 joules per terahash.

The most popular ASIC Mining Bitcoin is Antminer S9 which was released in 2016.
and for ASIC Mining Bitcoin the best hashrate for now is:
- Antminer S19, which has a hash rate of 95 TH/s (tera hashes per second)
- S19 Pro with 110 TH/s and T19 with 84 TH/s.
  Other competitors include WhatsMiner M30S++ (112 TH/s)
- Canaan AvalonMiner 1246 (90 TH/s).

https://m.bitmain.com/product/detail?pid=000202208221156311546vFPf4kv06AA


And about the renewable energy used by bitcoin miners today, it will certainly have a good impact on the environment without burdening conventional electricity, because they already have their own renewable energy source. Like El Salvador, which is intensively mining bitcoin, they are determined to use renewable and environmentally friendly energy. Such as the use of hydroelectric power, wind, solar and tidal water.

The Salvadoran government in September began harnessing geothermal energy for bitcoin mining from a factory at the base of the Tecapa volcano, 106 kilometers (66 miles) east of the capital, owned by a company that is part of CEL (Comisión Ejecutiva Hidroeléctrica del Río Lempa)

The plant produces about 102 megawatts, and the government plans to add another five megawatts next year. Currently, 1.5 megawatts are allocated for bitcoin