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

Ethereum's proof of work algorithm was different to that of Bitcoin's, so Bitcoin ASICs could not be used to mine Ethereum and vice versa. Ethereum becoming more centralized with PoS is irrelevant to Bitcoin's hashrate.

And as we know from multiple studies and reports, the majority of bitcoin mining utilizes renewable energy, the price of which is entirely unaffected by Russia limiting gas exports and similar events.

I don't know if this will have a positive impact on miners, but I think it will. It's a win-to-win situation, that's true because I believe Binance wants to profit from its efforts as well. To be honest not everyone will agree and may not be interested in getting a loan, but for those who believe that this loan will benefit their business then they will.

I think binance's main target is big farms and in this case mining companies can definitely generate a lot of revenue. They don't need to spend their own capital but they can make a profit with a loan. I don't expect everyone to agree with this idea because of the risk and interest involved, but in real business loans can sometimes yield good returns.

yes true but in this current bear market they might having huge loss since the second biggest coin ETH can't be mine and the price of the energy keep touch higher high when inflation and war explode

yes the debt liability offsetting income is a tax bonus too

..
but the main aim is as said in first part in both our posts. it free's up having to use your own funds. where by if you use a loan to increase your general income then it negates any interest

EG imagine having to sell bitcoin today at 100btc for $1.955m
to then buy 170 asics at $11.5k

then later the bitcoin price jumps to just $22k
guess what.. thats yout 10% extra lost

however take out a loan. keep 100btc on lock as collateral
use their $1.995m to buy 170 asics

and in 18months.  when its time to call in the loan
you have mined more coins with the extra asics.. so win their.. and also the natural price of bitcoin has gone way more then $22k. meaning you dont have to give them all of your initial 100btc to them. you pay them less than 100btc. thus win again

.
interest rates are a bad thing when it comes to fiat. due to the inflationary system of fiat where 10% interest per year is more like 14% because inflation devalues money by 4% ontop. thus your paying 14% extra in a fiat world

however bitcoin is deflationary and in 18 months the payback means you pay them les BTC than what you would have to spend today even if they add on some interest.


the bit i laugh at is how other responders are crying about a 5-10% loan. when fiat credit cards are at upto 40% apr

and also bitcoin sees 5-10% value changes every couple months. so the market will offset the interest

The exact method is used by apple for example, literally the same thing you are talking about. What is it? They had billions of dollars in cash, and they still took out a huge loan to build their headquarters, why did that they do that when they had enough money to buy and build it? Because of 2 things, first of all it's someone else’s money, why not get it right away and pay in small instalments, making your cash flow a lot more free to do whatever else you want.

And secondly debt is tax free, which means you could show the IRS that you are in debt, and they can't tax you for that much amount, giving you bigger tax cut thanks to it than the interest rate you are going to pay back. That’s just smart business.

Funnily enough, we'll replace the traditional banking system. And we'll do it with 7 transactions per second. 

It doesn't matter, but I don't think it was. Satoshi had set the block size at 32 MB at first.

There's already greater internet speed, but no such change. Perhaps it's just not worth the consensus inconvenience.

And why doesn't Binance use those $500M to mount their own mining farm?

Is a tricky situation, because if they give it as a loan they will win for sure and recover their investment, but if they create their own farm and cryptos price dumps after that then they will be in a huge loss and huge problems, i think that's why they don't want to take the risk.

One more thing (huge plot twist):

By 2136 the whole BTC development/deployment could be entirely handled by... robots and AI.

If this sounds sci-fi crazy to you, take a look at what happened last month:

https://www.ndtv.com/world-news/tang-yu-an-ai-powered-robot-named-ceo-of-a-chinese-company-3326427

I assume almost everyone (including miners) will use LN by then, not on-chain transactions (they will be too expensive).

The history of money has taught us that a currency always starts in a pure form and then abstractions get added on top of that.

Whether it's fractional reserve money, electronic fiat money or LN.

LN already adds 3 more decimals, so...

If BTC becomes so popular, 7 txs per second means it will be very rare in a world of billions of people to do on-chain transactions on a frequent basis.

I think BTC was designed for the average connection of 2009, which is a regular ADSL @ 1 Mbps (upload). By 2136 almost everyone will have FTTH, so block size could be increased with no repercussions.

There's even a parabolic hyperbitcoinization chart which shows that 1 BTC could even reach trillions of dollars each. So 1 sat could be worth 10k USD or even more.

By 2136 we may have colonized the galaxy if Elon's vision becomes a reality, which means that even gold could become abundant, let alone food/energy:

https://theprint.in/opinion/giant-asteroid-has-gold-worth-700-quintillion-but-it-wont-make-us-richer/260482/

"the minerals contained in asteroid 16 Psyche are said to be worth $700 quintillion — enough to give everyone on the planet $93 billion"

Gold hyperinflation is possible, but we will need better mining technology. BTC is capped at 21 million, but you can always introduce more subdivisions (on-chain or off-chain).

You don't divide the subsidy. You only divide the reward, which is the subsidy and the fees. The real question is: What will happen if someone wants to move an amount, and pay 1 sat as a fee, given that 1 sat is valuable?

Even though fractional satoshis could likely be implemented in a soft-fork way, it'd be preferable to do it in a hard-fork way. And since ECDLP will be likely broken by 2136, a quantum-resistant algorithm is going to be needed, which will result in an inevitable hard fork. Perhaps we could expand the sub-units along with that.

This problem will be a serious concern only if there's a tremendous rise in production of goods, because otherwise, for a hyperinflated USD with little rise in production, $10 isn't going to be much (which is the equivalent of 1 sat, given that 1 BTC = $1B).

Why would a mining pool only divide the subsidy between all participating miners in their pool and not similarly divide the fees? If the total block reward is 1 sat and 0.5 BTC in fees, then the mining pool will divide the full 0.50000001 BTC between all the miners.

That still doesn't answer my question:

How are you going to divide the block subsidy (not the block reward/fees) among multiple participants?

1 BTC could be worth the equivalent of billions of $$$ by 2136... so 1 sat could matter a lot by then.

The block subsidy might only be 1 sat, but there are still all the fees to consider, which will result in a block reward far higher than a single sat and easily divided between multiple participants.

That's not how it works. There will not be a mass capitulation like that. If an individual miner reaches their limit and turns off all their equipment, then by doing so they make mining easier and therefore more profitable for every other miner they leave behind. It's a self correcting process.

All crypto aren't dying, though altcoins can die anyway , but surely bitcoin isn't dying, and as o_e_l_e_o already rightly said in this thread, hash rate is currently at an all time high, so there is no problems in the bitcoin network/protocol. And you are correct binance needs people to trade with many of these shitcoins to survive .

Binance is not helping miners, they are making money off miners with that kind of interest rate and security involved, miners that will take their offer are the ones helping binance to make money .

While most people question whether this loan would help or hurt miner economically, there's different concern where not all T&C which is mentioned publicly. While i expect something normal such as not mentioning agreed interest rate/payment date publicly, it could be something malicious such as applying blacklist on their pool.

You noticed that well, and it was also the first thing that caught my eye with this generous offer. Obviously, CZ and his team are no better than those local criminals who lend money to desperate people, with the only difference being that the criminals have some painful debt collection methods. I just wonder what the KYC process will be like for anyone who decides to accept such an offer - maybe a picture of the owner's face next to each mining device with an invoice and serial number

I don't understand why people think Binance profiting through this is a bad thing. This is how global markets work. They help miners that need help and in return they make some profits to help their businesses. Binance helps elements of crypto markets because they need crypto markets to survive. What would happen to Binance if all crypto died? It wouldn't even exist because there would be nothing to trade.

I don't trust the moves from Binance in granting the loans and if miners got to collect such it will rather do more to increase the difficulty in their experience on low income to be unable to afford paying back Binance at the long run, this year we have the ever increasing hash rate from miners and before you know the bear season will eventually pass and bull will come in, miners has to reason that in doing business, you don't expect having the same result repeatedly at all times, striking a deal with Binance for loan is a non profitable business at all, only if miners could realize this.

I just think that what Binances doing is just to take advantage of the miners who are currently losing money because Binance understands that providing loans at a certain interest rate will be more profitable than running the mining themselves.
Big institutions will always target profit even though publicly stating the reason doesn't mean it's trully the truth

Below is the announcement they have made about zero trading fee for 13 bitcoin pairs. It does't say anything about holding BNB and that doesn't seem to be required.
Binance Launches Zero-Fee Bitcoin Trading

I stopped using binance after compulsory KYC and will never use it. So, I can't confirm this myself.

Binance signing a loan contract will only keep him profitable. Meanwhile, the fate of miners who are getting more and more difficult by the day has an additional burden, namely having to pay their loans to Binance along with the interest. I think for Binance this is big business because whenever it is difficult for miners to meet payments the fear is changing hands where miners have to hand over some mining products to Binance, and little by little we will see that miners are being used as alibis to not be able to pay debts they.

What kind of support has Binance ever given to bitcoin?!!!
An altcoin exchange that is used to list all kinds of shitcoins to be pumped and dumped (including the biggest scamcoin of all times BSV when it had high volume) is harming bitcoin rather than helping it.

Lest we forget that when Binance was hacked they contacted multiple mining pools and offered them payment if they performed a 51% attack on the network to reverse the transaction that was stolen from them. Nobody complied but they still made that offer.

Last time I checked Binance they still charged a fee for all trades and reduced it if you owned BNB.

Big ass interest rate... if Binance wanted to really help interest wouldn't be 10%.

here is the thing many people get wrong about loans..

loans are not suppose to be for people that dont have any assets/ income.. having nothing and then owing someone in the future is the death spiral of fiat.

smart people and rich people know this
those with funds and can afford things without a loan, take out loans as a positive. that way they are not having to spend their own wealth upfront. but use the loan to create more income to increase their wealth

EG if you make $100m a year. and dont want to spend that $50m a year. you get a loan for $50m to create a situation where income increases to $150m a year that way over 2 years you are $100m ahead in profit/new money and able to pay back the $60m(loan+2year interest)  and still have over $40m spare of free profit plus continue to be getting $150m a year income

no one that is "just breaking even" or cant afford to sustain themselves should take out a loan because the loan payment+interest would put them in a worse position if they are not using the loan to increase their initial income
..
so as i said in previous post. smart businesses that can afford to expand without a loan. would use a loan to free up having to spend their own funds upfront..

Every miner, investor has own limit and when we have a majority of miners reach their limits, we likely witness a miner capitulation. Weak miners can not afford to temporary loss and after a few months of fighting with loss, they have to capitulate and exit.

As a company, running a business and getting profit from its operations are most important. Binance definitely is not an exception as well as their opponents like FTX. However, consider it as a win-win situation and if people can take it to lessen their difficulty or resolve it, they must accept that they are bringing profit and reputation to Binance or FTX. It's fair enough.

Regardless of what Binance's goals are, they will generally provide loans to large companies that do work in the bitcoin mining industry and can make loans according to the terms of the loans provided by Binance.


If you look at it from the eyes of an investor or miner, a loan will be the last resort that must be taken to maintain the development of the company, even though the risk of interest on the loan will certainly be charged. Borrowing will end badly if you don't have any superior products and Binance will also conduct a survey on borrowing companies


If that was the case in the end, CZ would just be an overly rich person with some of the interest on the loans she enjoyed. But we can't even compete with him, He may have other goals and I think CZ will contribute to the development of bitcoin miners though not completely.


Win-Win Solution for Binance, of course all companies will take advantage of what they put out. there may be some compensation provided by binance when they fail to pay the loan fees. but some of the larger companies that may take out loans have already done some research on their loans. in this context we're talking about binances like moneylenders who will confiscate everything when they don't pay, but probably won't go that far.


Maybe US is an exception, but I also don't understand the actual rules about the US whether they still take loans or not. Currently the US is the country with the highest hashrate distribution and continues to rise every year. The US is a country with relatively cheap mining costs, but several other consequences such as a sudden rising heat wave also put pressure on their electricity costs.

Bitcoin mining hashrate distribution from September 2019 to January 2022, by country:

source: https://www.statista.com/statistics/1200477/bitcoin-mining-by-country/


Binance is doing the right thing, but there will be some pros and cons about their lending projects. whether it's a good project that fully supports miners or just taking big profits.


They apply loans to large mining companies which are still profitable, because the target is win-win, as stated by o_e_l_e_o. Binance is also doing research on big borrowers, they also don't want borrowed money to just be wasted money without making anything for Binance.

Sounds like a win-win situation to me.

those taking out the loan are not the unprofitable farms. nor the "start-up"

it will be the profitable well established farms in the best economic setting already.. that, instead of waiting 6-18 months to accumulate coin for next upgrade season in 2 years.(normal processs). will take a loan now grab much more asics now and really drive themselves up into the higher % of hashrate ownership to reap more coin per block sooner

the aim.. is obvious.. if binance can trigger the hashrate competition to raise the costs of mining(underlying value) this then snowballs to raise the cost of all the other miners in speculation zone above the underlying value. which then pushes the price higher because those selling low wont sell so low and those buying will happily buy higher with the new raised low. thus moving the market price up

To be fair, I think Binance already supports the BTC ecosystem more than I expected. They have no obligation to do so.

They already have their own shitcoin (BNB) and yet, they support BTC by offering 0% trading fees (doesn't apply to BNB strangely enough) AND loans to struggling ASIC miners.

If you have faith that BTC will increase at least 10 times (200k USD = conservative estimation) during the next bull run (2025), then repaying those loans is a no-brainer.

Yes, it's a gamble, but more of a calculated risk I would say.

All halvings so far (2012, 2016, 2020) have spurred new bull runs/ATHs like clockwork (2013, 2017, 2021). Some people think it's a coincidence. 3 times in a row, though?

Until the block subsidy becomes highly insignificant (could take decades to happen) this pattern will keep repeating like fractals do.

ps: I'm wondering how pools are going to divide 1 sat to multiple miners during 2136-2140.

It's literally impossible with the vanilla BTC protocol, unless they use extra subdivisions/decimals like LN already does.

Musk caused only some short-term manipulations and can no longer have any significant effect on the market.
Also, mining is still profitable. As mentioned by o_e_l_e_o above your post, the total hash power is now at its all time high. That couldn't happen, if mining wasn't profitable.
The following chart shows bitcoin total hash power changes over time.


blockchain.com

Binance are not exposing themselves to any risks whatsoever, there is no situation of "no risk--no gain" for Binance too, check/read well, you will see that they are charging interests for this loans, it is not free, so if the miners pay back Binance gets to gain from the interests incurred, they also require securities or collateral to receive the loan, so if a miner doesn't pay back, they take whatever you have offered as security, they get to gain in that case too, so this is a situation of "gain--gain" either way for binance.

Considering that Binance does not want US customers, will this extend to US miners too?

Most of the mining industry is there, so this will be very hard to carry out if Binance is completely prohibited from doing business in the US at all...

Taking this loan now could be a gamble because if price does not rebound to new highs before repayments are due its going to be bad for the loaner and loanee, and I thought Musk made this business unprofitable after his negative tweets about BTC... Not forgetting the increased difficulty that's there. Honestly at the moment, too many barriers to this to help the miners to come out profitable in this deal.

And Just putting some thought to this, what really is Binance interests in getting miners signed up for this, have they considered the risk they are exposing themselves too??? anyway no risk, no gain Good Luck to them.

Nonsense. Hash rate is at an all time high, and indeed, has seen some of the fastest growth we've ever seen over the last few months. https://bitinfocharts.com/comparison/hashrate-btc-sma7.html#alltime

It's a win-win for Binance. Give out a loan to a struggling miner, using their assets as security. Either they pay back the loan and Binance make a profit, or fail to pay the loan and Binance take their assets, which will likely include all their mining gear, meaning Binance get to grow their own operation.

The loan can help to sustain the business temporarily assuming that Bitcoin will recover soon enough so that company who took the loan can pay the interest and capital.  But if the bear market prolong, this loan can be the trigger of death of companies that took the bait.

I also think that this loan offer of Binance is like a wolf in sheep's skin, ready to take advantage of the mining company that has difficulty in maintenance.  Anyway, the 5%-10% interest isn't clear whether it is an annual interest or semi-annual since the terms is 18-24 months.  Does anyone has information regarding the duration of this interest charges?

Binance is already satisfied by the, ATH-ed at the time we speak, security of the Bitcoin network. This loaning will only satisfy CZ's pocket.

Some miners must have had some difficult time, and some might had been mining with loss too. But, apparently, the network worked fine, and mining has peaked over all.

If it's loans for mining equipment or something like that, I think it can be a good thing for public companies (do they exist?) because the state borrowing money for projects is kind of very typical. But as for private individuals or small business owners, I think that if things are difficult, getting a loan to engage in mining which might bring more losses unless the price changes significantly, so getting into it is risky. Don't invest what you can't afford to lose should especially apply to things like businesses that can lead to even more losses than initially anticipated. Loaning money for mining can end poorly.

Although the Binance intention was good but apart from the steadily falling price. Binance needs to know that the issue of Bitcoin miners is more than just the loan funds. According to the news I read when some miners are into debt due to mining not being profitable, the major issue is the electricity cost.
Giving the Bitcoin mining sector will only fix some part of the issue they are experiencing but not the critical aspect.
I heard some companies are building some batteries that will last for months and full charge within a few minutes, if this happens the mining sector could have the good old days.

I wonder how this loan will help miners while they are losing on this bear market and having a loan will just give them more loss in the long run due to the interest rate since we don’t know exactly when will this bear market stop. Binance surely is a greedy loan shark for giving that huge interest rate on crypto sector that heavily affected by the price dump of Bitcoin. Increasing mining rig using this loan money doesn’t make sense because it will just increase the potential loss for miners.

The already low block reward and the steadily falling prices have put a lot of miners out of business, but whether the loan will bring back the miners' confidence to rebuild their bitcoin mining, I think why binance didn't build it for themselves, because we know they own the market the world's largest cryptocurrency and binance can build the world's largest bitcoin mine too

First thing I thought, this ain't no favor. 18 to 24 month loan? You would be hard pressed to buy and house a miner to break even at that. The timing is for miners to default at or near the halving and take their assest, now that it has become profitable. Like shark title loan.

Because if you are running an unprofitable business, the best possible thing to do is to lock up your assets for 2 years to take out a loan at 10% so you can continue to run your unprofitable business and end up even more in debt than you were to begin with.

Don't be fooled in to thinking this is Binance doing something good for the network. It isn't. This is Binance doing whatever they can to make more profit for themselves, at the expense of anyone and anything else. Just as they have always done.

The last retarget saw the difficulty increase by one of the highest jumps ever, and the highest since May last year. We are on track for another 5% jump in this period. Hashrate is at its highest ever, and continuing to grow. The ecosystem is "running and growing" just fine, without this cash grab from Binance.

Miners have to afford to lose temporary because they can not have profit from mining in both bear market and bull market. It is easily to have profit from mining in bull market but in bear market, it is different.

In bear market, they can have very slim profit and sometimes, they even have loss. However, if they can keep mining and hold their mining rewards and wait for a next bull run, they will get very good return at the end. It would be more similar to long term investment for miners. If miners are short term miners, they will have more risk to get loss.

As a large exchange and currently the most popular crypto exchange, Binance announced that it will provide or facilitate Bitcoin miners with a nominal value of $500 million and will be awarded to Public Bitcoin mining companies and Private Bitcoin Mining and digital asset infrastructure globally.

In its announcement a few days ago Binance will seriously support the mining industry and will also look for cloud mining vendors.

This plan emerged when Bitcoin Miners had a difficult moment in recent months and the bitcoin price continued to fall to touch -72% of the previous ATH. Of course, this year has been an unfavorable year for miners, while electricity costs and maintenance costs continue and are increasingly expensive.


According to data from The Block Research, Bitcoin Miner revenue continues to decline from its highest in November 2021 with revenue of $1.7 billion and to date in September Miner earns $550 million in revenue and that's down about 67.7%, which is definitely a huge drop. and the loss of miners is also caused by a decrease in the price of bitcoin.

And as a solution for Bitcoin miners who had experienced losses, Binance Pool as one of the world's leading crypto miners has a responsibility to keep the digital asset ecosystem running and growing. The $500 million Binance Pool loan project will support crypto miners and digital infrastructure providers.

Loan Terms from Binance

Borrowers must meet several conditions that will be asked including:

- Term For Loans is 18 to 24 months
- Loan interest rates range from 5% to 10%
- Offers security for both physical and digital asset markets, which will satisfy Binance.

Binance will also cooperate with Cloud Mining vendors, as the Binance pool intends to launch a Cloud Mining product.

Source: https://www.theblock.co/data/on-chain-metrics/bitcoin
            https://www.binance.com/en/blog/mining/binance-pool-to-support-btc-mining-industry-with-a-$500m-miner-lending-project-694684880316935062