On The Brink with Castle Island

Karim Helmy and Brandon Bailey (Galaxy Digital) on Standardizing Miner Accounting (EP.264)

Nov 29, 2021

50:38

Creator website

Highlights

AI Chapters

Episode notes

Is This a Tool Kit for the Analysts?

02:10

Is the Three Year Depreciation Schedule Right?

02:30

How Much Are You Paying for Your Mining Equipment?

03:01

Introduction

2min

How Much Does It Cost to Mineor Bet Coin?

4min

CoinMetricks - Is That a Coin?

2min

The Fidelity Mafia and Hardware Finger Printing

3min

The Nature of the Hardware Informs Your Depreciation Period

2min

The Depreciation Period for Bitcoin

2min

The Cost to Mine a Coin

4min

Is There an Equo System of Celciders Covering the Stuff?

2min

Dot Link Slash With Em

5min

10.

How Much Does Your Miner's Cost of Production Affect You?

4min

11.

Is There a Bottleneck in the Mining Industry?

3min

12.

Is the Supply Chain Disruption Affecting Bit Man Mining?

2min

13.

Supply Side Shortages and Scarcity Are Creating a Golden Era for Bit Coin Mining

2min

14.

How Much Are You Paying for Your Mining Equipment?

3min

15.

Is This a Tool Kit for the Analysts?

2min

16.

Is the Three Year Depreciation Schedule Right?

3min

17.

A, Ry, I'm Sorry, as Simple as Possible While Remaining Useful.

2min

18.

Is the Hash Rate Growth a Function of Political Arbitrariness?

5min

Galaxy Digital Mining Associate Brandon Bailey and Research Associate Karim Helmy join the show to cover a new accounting methodology for Bitcoin miners. In this episode:

Galaxy's new miner margins accounting methodology
Brandon and Karim origin stories in mining
How the randomness-based miner fingerprinting works
How Karim thinks about miner depreciation schedules
Why the Bitcoin e-waste paper understates the expected lifetime of Bitcoin ASICs
S9s are still a quarter of the Bitcoin network
Why Karim and Brandon created the new accounting framework
The differences between marginal, direct, and total cost of production for BTC miners
Does the sell side capably cover Bitcoin miners?
What you would expect to see for marginal and total cost of production for established Bitcoin miners
Why miners focus on marginal cost rather than total in their storytelling
Major bottlenecks preventing the addition of new hardware
Why hashrate may not converge to price in the near term
Why the chip shortage advantages incumbents in Bitcoin mining
Why Kazakhstan is scaling back their Bitcoin mining
Why mining manufacturers do not get priority access to the best foundry capacity
Why established miners will be able to mine Bitcoin at favorable rates for the near and medium term
Why of the accounting identities Galaxy would prioritize when evaluating public mining companies
How Galaxy arrived at a 3 year depreciation period for the average mining unit
What advice Brandon and Karim would give you public market analysts evaluating mining companies

See the full write up and sample model here.

Sponsor notes:

This episode is brought to you by Withum, a top 25 accounting firm with a cutting-edge Digital Currency and Blockchain Technology practice. To learn more, visit withum.com/crypto
OurCrowd analyzes companies across the global private market, selecting those with the greatest growth potential, then brings them to you. Get started at OurCrowd.com/otb

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