Bitmain, a Chinese company that makes specialized computers for "Mining" cryptocurrency, said it would invest $500 million in what was to be the world's largest bitcoin-mining facility at the closed Alcoa smelter, which, crucially, was still connected to massive electrical lines.
As Kyle sipped Shiner, Young remembers him talking about how Bitmain's facility could someday feature more than mining.
To optimize the chance of earning coins, the top mining operators run hundreds or thousands of miners 24/7. Imagine your electricity bill if you were constantly zapping instant oatmeal in hundreds of microwaves all day, every day.
Texas is hot and humid, which is not ideal for mining, because the computers require cooling; energy prices are about average for the US. David Yermack, an NYU finance and business professor who has studied cryptocurrency, says that other than Venezuela, where Nicolas Maduro virtually gives away electricity, "Texas is about the weirdest place I've heard for bitcoin mining."
In early January, Young heard that Bitmain would close the mining facility before it had ever gone online.
In November, central Washington-based mining company Giga Watt filed for bankruptcy, ending its multimillion-dollar plans to host miners.
Yermack (2013) notes that Bitcoin is not suitable to be a currency because of the instability of its price. Grinberg (2014) notes that Bitcoin has legal risk. ... Grinberg (2014) notes that ... Professor Yermack’s research on Bitcoin volatility found it displayed an average 10% price change per day with an overall volatility of 142% over the course of a year. This compared to Gold’s ... David Yermack * New York University Stern School of Business and National Bureau of Economic Research April 1, 2014 Abstract: A bona fide currency functions as a medium of exchange, a store of value, and a unit of account, but bitcoin largely fails to satisfy these criteria. Bitcoin has achieved only scant consumer transaction volume, with an average well below one daily transaction for the ... The lead article in the January 2017 issue of the Review of Finance is “Corporate Governance and Blockchains” by David Yermack of NYU Stern. We hear blockchains mentioned all the time, but very few people know what they actually are, how they work, and what effect they may have. This paper is an excellent “go to” reference that answers these questions in a clear and non-technical ... technological factor Hashrate as irrelevant for modeling Bitcoin price dynamics. This irrelevance is due to the underlying code that makes the supply of Bitcoins deterministic, and it stands in contrast to previous literature that has included Hashrate as a crucial independent variable. Moreover, the empirical ﬁndings indicate that the price of Bitcoin is affected by returns on the S&P 500 ...
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