Overnight, Bitcoin continues to fluctuate above $29,000. The volatility index (30-day implied volatility of option prices) has further decreased, indicating exhaustion from both the bullish and bearish sides.
According to reports, Bitcoin mining equipment manufacturers are shifting their focus from the saturated U.S. market to the mining market in Russia. Luxor Technologies, a mining infrastructure service provider, stated that more machines are flowing into Russia than any other place in the world.
Since the setbacks in mid-2021, the total network hash rate of Bitcoin has experienced rapid growth.
This market seems to have a hint of supply economics: when the mining industry becomes an interest group, it promotes the sale of mining machines and mining businesses worldwide, continuously expanding the scale of mining and approaching the maximum mining capacity, which in turn drives the mining cost closer to the leading Bitcoin price.
If the purpose of production is to make money (capitalist production), then mining Bitcoin with mining machines is just one industry competing with many other categories of production. One boss, who may not even know about Bitcoin mining, might be mining coal. Another boss, though aware of Bitcoin mining, may struggle to buy enough mining machines and end up opening a restaurant. Selling mining machines to them at this time is empowering them with the ability to make money through another attractive means - Bitcoin mining.
As long as there is enough profit, businesses can achieve things beyond imagination. This is not the magic of business, but the result of mobilizing human subjectivity.
Just as the story of selling a comb to a monk goes, with clever thinking, an excellent salesperson can sell anything to anyone.
Henry Ford once made a good analogy by saying that before people saw cars, everyone wanted a faster horse.
Before having the ability to mine Bitcoin, every boss wanted to mine coal or open a restaurant.
However, the way Satoshi Nakamoto designed Bitcoin mining made it different from the production of other industries. The mining cost of Bitcoin automatically adjusts with changes in hash power, ensuring that all participants in production receive a fixed total output in a unit of time, regardless of their input costs.
In theory, they should conspire together and collectively reduce hash power to lower mining costs. However, the prisoner’s dilemma game forces them to compete with each other, constantly increasing costs, improving mining technology, and seeking low-cost electricity to gain a competitive advantage over others.
Because mining machines, as hardware, wear out and need reproduction, and mining Bitcoin requires continuous consumption of massive electricity (OPEX), any existing leader cannot maintain a stable advantage and is always susceptible to being replaced by other strong competitors. This makes Bitcoin different from PoS mining projects, where token lock-up creates only fixed costs (CAPEX) and operating costs (OPEX) are low, allowing existing leaders to have an almost unbreakable advantage, forming a trust-like oligopoly or a cartel-like interest alliance.
This characteristic makes it impossible for Bitcoin production to experience the common practice of dumping in capitalist production, as we have seen in the textile industry or other industries, where excessive production floods the market with cheap goods, improving people’s lives. Because the production of Bitcoin is always constant, dumping mining machines cannot lead to excessive production of Bitcoin and subsequently dumping Bitcoin.
It can be seen that Bitcoin itself has inherent characteristics of anti-monopoly and anti-dumping, which naturally allows it to counteract the weaknesses of capitalist production and prevent Bitcoin prices from collapsing as a result (like pouring milk into the Mississippi River).
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