MineBest on Mining After the 2020 Halving

Two months after the May 2020 Bitcoin halving, the block reward had just dropped from 12.5 to 6.25 bitcoin, and a mining company with farms in Kazakhstan and China was asking what came next. Adam Targos, Vice President of Global Sales at MineBest, gave this keynote at Mining Disrupt Covid Online 2020, recorded July 22 and 23, 2020. Bitcoin traded at $9,530 that week. Today it trades at $82,535.

MineBest was founded in late 2017. It started out mining Ethereum, then switched to Bitcoin and to hosting other people's machines. Targos said it ran four farms with 140 megawatts installed, three in Kazakhstan and one in China. He began with the halving.

The cut lowered miners' revenue and pulled hashrate down. But on a long-term chart he showed earlier stretches when rewards fell, held flat, and then recovered, because profitability rides on the Bitcoin price. He was careful not to call the halvings a prediction. He said they had been a good start for rapid price increases, and pointed to 2012 and 2016.

In his words, “after each halving the tempo of the increase of the price was definitely bigger.” His second point was hardware. CPUs gave way to GPUs, then FPGAs, then ASICs, and each switch changed efficiency by an order of magnitude. ASICs arrived in 2013. Since then, he said, new models had improved by not more than 10, 15 or 20 percent.

Would a new kind of machine arrive? Probably yes, he said. When? No one knows.

Then he turned to who mines. Satoshi Nakamoto's idea, he said, was that anyone could join the network and secure it. By 2020, only the biggest companies supplied most of the hashrate. And because cheap electricity decides profitability, there were only a few places where mining really paid.

He asked the audience whether that was good or bad, and said protecting the network from a 51 percent attack should come first for every player. MineBest's own answer was to keep building mining farms and to add products outside them: a blockchain smartphone called the Smile S1, crypto debit and credit cards, plans for a chain of Bitcoin ATMs, and what he called a luxury urban vehicle, “an electric car devoted for crowded city spaces.” He closed by inviting the audience to MineBest's headquarters in Warsaw, Poland. The full story is on Mining Disrupt at miningdisrupt dot com, and many more like it play around the clock on Bitcoin Radio.