Grayscale, Binance Pool, Bloomberg Coverage

0:47community call number 19. 0:50today is the 29th of march 2022. 0:55the time is this week at 1400 utc which is a change from normal and uh keep an ear out for future updates on time changes we're trying to figure out the best time to get everyone involved so um there might be some adjustments in the coming weeks but we'll try and nail something down in future 1:18and non-guest agenda we will be opening the floor to anyone that wants to talk and this is being live streamed to youtube so please behave and uh we don't get kicked off of any platforms so uh if you're in the chat be 1:36on your best behavior also if uh you would like to contribute to anything feel free to jump in and uh as mentioned this is an open agenda so that's your questions comments in the discord or the youtube will be keeping our 1:52eye out for those topic of today i believe henry had an update to loop back into a previous call uh 2:10regarding the hybrid proof of work approach so uh henry do you want to explain sure um i think so i presented the proposal a you know structure for discussion around a hybrid proof of work which was a you 2:28know 50 50 split between shaw shaw three could check and gpu mining that would that would the proposal would have kept the ecosystem in check and protected uh mining those from you know the new asics coming on as well as the existing network of gpus uh during 2:48discussion you know the feedback from the community was that it would be hard to implement although you know it was it was a good compromise and i think that on call 14 we discussed that epic would withdraw the uh you know proposal so i just wanted to note 3:07memorialize in the action items on call 13 that the discussion the although productive was withdrawn i would my perspective on this is that uh even if 3:26like a particular ecip is withdrawn it doesn't mean that the idea itself uh should be abandoned at all it's uh just one implementation potentially of of many and as i've mentioned previously i i 3:43think edc needs to be open to uh all kinds of proposals including shar3 and uh how that's done uh ambi in many different ways so uh i guess thank you for um putting it forward and even though it's withdrawn i think uh it could return in some other format 4:03in the future great well appreciate the community uh working with me you know the the whole intent of that discussion was to you know show proposal as well show the potential impact on etc so i think it's served a second purpose the first purpose we'll just keep it open and see you know if it could be potential implementation 4:22in the into the shah three uh rabbit hole again but uh it seems like uh the at least on the ethereum main net side things are moving forward with 4:40the merge and given that coordinating a sha-3 fork before the merge seems fairly unlikely at this stage uh and with all this uh sort of narrative of miners moving to prove to classic it seems a more sort of long-term uh implementation 5:00approach would be the next stage for sure three we are sitting fairly 5:18pretty uh in etc land at the moment um i guess since the start of this series of calls which i think was at the start of december last year we are now at an all-time high we very rarely discuss price but i guess it's a little bit special right now because uh 5:36edc has broken fifty dollars and is currently sitting above that uh and i believe this may be related to a flurry of articles that have come out recently in the last week since we had the last call three articles in particular that we're going to highlight bloomberg 5:58which is a fairly reputable and uh well-known outlet whether it's trustworthy or not who knows there are you know many sides to the discussion but uh the the exposure itself i think has helped 6:16the price action that we've seen this week and that article talks about basically the whole narrative of why etc might be pumping right now and that we've discussed on many calls before and kind of predicted in 6:36the show notes get one thing wrong though i believe brother could you remind us that classic forked away in 2016 so 6:52that's that's not true ethereum fork forked away common misconception about ethereum classic that uh seems to not go away but uh hopefully as time goes by and 7:14figure it out it's just a shame that uh a prestigious newspaper such as bloomberg were unable to figure out that side of the story doing the rounds and uh i think overall it's 7:32a fairly good uh informative article binance which uh they have uh introduced a mining pool for ethereum classic which previously they did not have i believe it was just for ethereum on earth but 7:52finance now have a etc hash specific mining pool which is quite big news because binance is a pretty one of one of the most well-known exchanges obviously and them supporting ethereum classic officially in a mining pool just adds some 8:09additional sort of clout and respectability to the chain so uh we tip our hats to the guys in the binance pool office whether 8:29this makes any difference in terms of uh helping miners migrate or i guess it's at least a more trustworthy source to point your rigs at but uh if there's any miners in the room that might want to add anything to the announcement whether how this affects the theorem classic please 8:46go ahead [Music] but it's always nice to have more choices and also something something good to see on 9:06the on the on the pool front is that if a mine the share of ether mine is is decreasing it has now fallen below 40 percent so that's also a healthy development that we don't have one dominant pool where 9:25everybody hangs out and the bad things could happen if if the pool gets hacked or something like this people will point to centralization of mining pools and say oh this is this 9:45is proof that the chain is centralized and it's almost used as a yardstick to measure how decentralized the project is but obviously it's only one metric and it could even be a metric that's not really that important because is it not true that if a min if a mining pool misbehaves they 10:03might be able to pull off a 51 attack for a few seconds but then the miners will just switch to a different pool so the centralization of pools how big of a problem actually is it they 10:21could enjoy the after 51 for a while um i guess if they just keep paying their minus um they could keep this for what maybe long enough or for actually do something something nasty with it and um 11:01does an insider attack and then the pool's hash rate could be used for nasty things of course for if you want to do those double spend attacks then you need to create your chain in secret for a while so that 11:19would draw some attention so i'm not quite sure how how how far you could get if this would also depend on how much internal monitoring they have but fundamentally it's it's something that that could be could 11:37be used for bad things so it's good if we don't have any such dominance and i mean if if a mine would fall to something like 30 percent then we would essentially have a situation in which even taking control of the two biggest pools wouldn't well 11:56you would need at least control of the two biggest pools um to to be able to do something so let's that would definitely be reassuring like 12:19misnomer to use the pools themselves as the measurement because we don't know i mean it could be that the two biggest pools are owned by the same person or a bunch of the smaller pools owned by the same person ultimately controlled by the same people and or the software that's being running on those 12:38pools is hackable by the same people so i think like pointing out the relative size the publicly stated size of the pools or whoever controls those pools may be a bit misleading in terms of figuring out how decentralized the network 12:53actually is i'm not sure what the ownership situation behind those all those pools is but um i mean if as a as as a first order approximation when 13:13you see a pool that's that has say 49 then you already know that something is amiss you don't even even need to look at that who owns what but yes there could also be i mean especially if there was a an aggressive policy towards keeping 13:32pools down then this could uh lead to action where pools just diversify into apparently independent pools but and in the end they're the same hands so that could happen but uh i guess if uh in the whole situation i wouldn't really expect 13:51so to have such see such hidden conglomerates that own a lot of pools but i mean i guess uh such things would also eventually be discovered and uh then we could see what's if there's anything that needs to be done or so but for 14:10now i would go i would mainly look at that at the polls and and expect not not to be overly um connected to each other i mean there's also also the risk that they might be used they might be using the same software for some things which could have a common vulnerability um 14:30so they're always these kinds of risks too sort of mis uh sorry overlooked um potential problem especially with like some kind of sophisticated supply chain attack whereby you could you could be secretly mining 14:52like a small percentage of hash rate uh surreptitiously stealing from everyone that's using your software basically and it seems like it'd be pretty difficult to detect attacks 15:10on the on the miners themselves if there's if there's one piece of software that's extremely common and used by a majority of miners and all these kinds of things but like again in china will it helps just to to keep it to keep a diverse environment and 15:29this makes it much harder to do those those kind of uh those attacks on them compare something as naturally aggregated and um well we can just look look for the for whatever for the obvious signs um if if something goes in it goes in a bad direction that should all already um help 15:49to identify most um realistic attack vectors vectors and yeah we have our other clients so if somebody could could have taken that well on that on that 16:08path that i would hope that that would be bad um dominant organizations i guess profile um supply 16:28chain attacks in uh other contexts in recent years so i would not be surprised to see something similar in the blockchain space relatively uh fewer sort of developer projects like ethereum classic is something 16:47to look out for binance poll that they also offer a price uh 10 000 price so for any miners out there who are interested 17:06in this they should chat check the article reason in terms of profit motive that a miner would not use binance like what goes through the miners head when they're 17:22deciding which pool to use most of the most of them will probably just look for any any information on what is the pool that can 17:40mine x so they would probably look around on fpmclassic.org they might be look looking at mining pool stats which pools are there and then they might go based on what other people say if 17:58they're a bit more sophisticated then they might find um pool profitability comparisons and look what's what's this look at what they see there or maybe they just um look around on four uh where people discuss pools sometimes um i 18:17mean what all the miners is typically looking for is a pool that um that pays regularly um i mean from especially for smaller miners on a relatively regular basis even 18:37if it's not a lot and so they will tend to prefer larger pools because they fight blocks more often than small pools and um there will also have uh considerations like ease of use 18:54maybe geographical distribution that's already a bit more sophisticated uh they will def they will definitely be interested in uh in pools that are not that don't cause them problems even if the if the if the problem comes from the 19:12miner and not from the pool that's that's particularly true for unsophisticated miners who might have an incorrect uh configuration of the hardware maybe they're overclocking too aggressively and they need the miners but this producing um a 19:31lot of [Music] bad results and if a pool accepts it anyway um then they're happy and if a pool uh rejects those things or even bans them because they're sending too much garbage then 19:50they hate it so you you get these things and um there's this there's a big bunch of considerations uh and then and uh then you've also other things like like like 20:08the pool fees and uh the payment scheme um whether you get anything from mev um which is not a big not a big thing on etc but it's more important on on ethereum uh but when edc picks up more traffic then 20:26we will also see mev become become something something that's relevant so it's a lot of just for the uh the listeners mev is minor extracted value right could you explain what that is uh that's basically when um 20:46when you can make when you can realize additional gains by organizing um the transactions in a block so you can i'm actually actually not entirely sure how does this paid file but uh i think that there may be some that 21:05that you may be able to do to basically wipe the pool to to put your transactions in a certain order uh which then lets you for instance get a better position in some in an auction or maybe you can do you 21:23can sandwich um a transaction that will change the coin value such that you benefit from that from the change and so on um i haven't really started this in detail but this is roughly the kind of things you can do there so this this is basically 21:43an added value because um um normally you would have the first uh transactions go into blocks basically randomly and um with the with with mav you you create a mechanism where they can control 22:02the sequence and produce additional value there's a bit of a debate whether this is uh this is good but it's damaging you're not damaging and whether it's it's 22:20ethical or not so they get this angle too but basically it's uh the protocol allows it so if if you take a strict code is law stance 22:33then that's fine the the client side to uh to figure out which transactions to put in there was i believe a proposal from uh byro a 22:52few weeks ago that was attempting to try and fix this by adding some kind of enforced randomness into the ordering of transactions but i'm not sure it's it's a pretty complicated area and whether it's a a problem and b one that needs to be fixed uh remains 23:15to be seen i think but it's definitely an interesting uh thing i believe in terms of the bribing system on uh on ethereum mainnet there are there are even dows now that have tokens that you can just buy and use to directly in your contract bribe miners 23:33so they can be aware of a specific like prepayment if you like it's like a pop-tap sim card that you can use in the form of tokens to ensure that your transaction gets through because you have uh these tokens as part of your transaction 23:55could be and probably should be ported to ethereum classic not if but when it becomes the largest uh small 24:05contract chain called 24:24notes the agenda i get i guess the other consideration for considering the pools would be you know what's the pool fee and then the convenience of going you know inter intra 24:43exchange at binance between the different different coins just simplifies your your transactions and liquidity when you're working with one exchange um i'm working with one other pool to adopt to 25:01add etc so you know they just recently moved to ethereum so we're in discussions of porting support for etc uh mainnet tools in theory should be like 25:20lining up to support etc at this point to somehow have the pools automatically switch their existing miner base onto etc in 25:40some way yeah sorry i didn't mean to rival finish your comment no that was it basically yeah so there is there is the ability to auto switch um some of the bit uh i haven't seen it implemented but certainly 25:57on shaw 256 you know people were doing profit switching between uh you know uh bitcoin cash the various flavors and bitcoin itself so it's quite possible i'm going to talk to my contact to see if that's something you're going to implement you know the obvious trade-off will be you 26:16know the perceived return on investment given that eth you know uh memer yeah is this their perception of when eth merges but i guess in a lot of cases well some miners just might leave 26:35their stuff on and forget about it and if they're just mining a dead chain then they might as well switch to something that's at least potentially profitable and some some automatic switching would require a also 26:56a minor side support on the protocol level and because they need to use a different deck than they use for ethereum so and then uh just the the normals the normal protocols he used to talk to a pool they they don't provide 27:14this information which incidentally is also something that helps to protect us from things like the like uh hashgrate being um brokered for things like uh like nice cash and which 27:31which was which was basically one of the enabling parts for the for the 51 attacks in uh 2020 and um though that's not necessarily a bad thing that this isn't possible and but so 27:49if you have a normal pool and your miners have don't have any special extensions for for switching algorithms even if they're similar these algorithms then you can not just we just give them if you have classic blocks to mine you 28:08need they need to need to change on their site or if you have such a protocol extension then this protocol extension would have to tell the miners to switch to the to this different kind of uh kind of uh of dac that i mean we have yeah at the moment we have three different types 28:28of decks in the in the etch space we have the the 80 hashtag we have the vm classic deck and we have the yubik deck these are all those all those three um groups 28:45um they i mean it's took two individual coins which have their their their own variant of vt hash and then there's a cluster of coins with the film and many small ones like uh callisto um expense 29:03metabolism uh who are you also using et hash but they're much much smaller than of class you know so much much smaller than well yeah then than a few so in any case um um for 29:23each of each of each or each of each of those switches the mining software needs to know which that you use that you need it needs to generate a different deck and then use this for the actual mining loop and this information has to come from somewhere and at the moment i think i don't i don't know 29:42if any um for any poolside protocol that would tell the miner the um that it should switch to a different type of deck how 30:03do miners normally sync with a dag but where do they get this deck from normally they calculate it and they the mining software knows the algorithm that is that that defines how to generate the dac then when they connect to the pool the pool 30:21tells them the seat hash but it could also tell them the the block height it's essentially the same information and then the the miner can uh can 30:39generate the the the direct that's needed for the for the current epoch and um then it will my and then the pool sends them a header hash for the for the block that's that it runs to mine and then the miner wants the algorithm with 30:57this header hash and with a series of nonsense using the stack that it has to as generated for this uh for this ctash when the block changes when the next block comes then the the pool will send another header hash for this new block and the miner will stop the 31:17mining of the old header hash and start mining with the new header hash and although we probably we said it's it's non's counter and when the epoch changes then the pool will send a new seed hash and then the miner will either generate or retrieve from from a cache 31:38because dax can be pre-computed so it will use it will load a new dac into the into the hardware and then the same procedure repeats and 31:49this goes on forever like this nowhere in there is an indication what kind of kind 32:04of argument that mining pools can do to make the life of refugees easier implement 32:24etc if they haven't done yet and provide them with instructions it's not difficult i mean for most miners it's basically one click to switch over over to edc and then i need to enter the need to change the url for 32:44the pool and then the mentioning 33:07the the gap a bit in ethereum and ethereum classic in terms of profitability i'm looking now at flexpool.io the estimated earnings for uh for 33:25a daily mining so ethereum has five dollars 57 and ethereum classic has and 33:37sixty four profitability goes up and down quite a lot um 33:55it has been i mean first of all it depends on how much uh how much you pay for energy and other other operational costs so it has been until mid-march it has been well at the beginning 34:13of the year it was uh at around 55 so for every hash you would get for every hash that you were mining on etc you would get 55 percent of the value of 34:32the of basically this an equivalent hash that you were mining on on ethereum and it started it at the beginning of the year around 55 and then it slowly crept up to yeah something like 62 percent uh 34:52till mid march and then and then the the big value increase of etc happened and it jumped up to 80 percent even got very close got very close to 90 or maybe even went over it and [Music] stayed 35:11there for for a few days and now i just dropped it started to drop again and now it's around um well in my statistics which are a bit delayed because um uh i mean i'm using some 24 hours moving and so on from what to mine where 35:31you can get all the base data for these calculations now it's around 65 um this this is the the drop has been mainly to have mainly been driven by ethereum profitability going up quite substantially in the last couple of days and 35:51it doesn't have the the latest increase of the theme of the film classic yet so i guess it will go up to above 70 soon and um doesn't does those this relative profitability is 36:10also it's always very noisy because it's also affected for example by auctions so whenever there's an auction on ethereum we have very few uh auctions on on the fem classic so whenever there's there's an auction on ethereum people pay extra extra fees to 36:29get the debits quickly to the auctions to the auction contract and this means that all of a sudden the mining revenue um jumps up quite a lot uh because 36:46it get sent to the miners and um does those those blocks that that are sent to the auctions are very profitable and 37:02uh then so you so you see the the relative relative profitability between etc and ethereum uh crash because ethereum is now a lot more profitable briefly and if ethereum classic doesn't if the j i have 37:22the same profitability movement and then 24 hours later when this averaging period is over then then it jumps back to the to the previous value and you get this work every few days every sometimes every few weeks and so 37:41this means that that you get like a lot of lots of spikes and strange things on those graphs and you really have to look at it at those uh mining profitability over a longer period of time um i can i can post uh in 38:01a bit i would also imagine that a lot of the profitability is undetectable because of mev right we don't actually know how much they're making [Music] sure 38:18how to what extent you can um you can tell what's um what profits come out of mev not quite sure how the whole system is organized at the moment um so but i 38:37mean the traditional sources of of profit are the emission which is the the current city great automatically when you mine a block and then the other other parts a other fees which 38:54the matter miners pay to provide an incentive to to average the for including their transactions in the block and those two things those two things combined they make up for most of the of the 39:14block reward and mev is usually somewhere on the side so this is something that i put up the pool extracts and then then it can um shade with with the miners or some of the some of them supposedly they just keep 39:32it for themselves um but these are these are not the not the primary um minor rewards and speaking of the profitability um when i look at a 39:52setup where you have something like uh 20 to 25 tera hashes per us dollar so this would mean this would be a case where you have a an efficient a power efficient miner and you pay something like a power efficient gpu miner i should say and um you 40:12pay something like four cents for us your sense of the us dollar per kilowatt hour um for etc at the moment of about one thousand 40:31percent so basically for every dollar you spend for electricity you get ten dollars um well eleven dollars um on on mining rewards and if you fear you at the moment remember that it's spiked recently um 40:48it's a bit above one thousand five hundred percent on my statistics which are a little bit behind the uh 41:06an idea of of the numbers that we have there so um there's this if there's a fair fair margin in there so this also means that if your if your mind is not so efficient or if you pay a lot more electricity it's still good we 41:25will have to see how what this looks like after the merge and the flood and [Music] although some miners uh have even better operational costs so if uh i mean i think the most efficient mining hardware at the moment for film 41:42and film classic is the and um this one gets some gets more like 60 tera hashes per us dollar so it's about twice as power efficient no 42:01sorry four times as power efficient as what i've described here and also some people pay even less than for for cents to the for the kilowatt kilowatt hour and the prices can go down as low as something like one cent obviously those don't 42:21worry so much about power efficiency anymore and they're more interested in how much a miner costs so this changes a bit but [Music] in general in in general them the main differences are now more on the power on the power cost than on mining 42:40hardware efficiency um so yes this is basically a picture that um yeah if with ethereum classic um if you're in a good setup where you have a low low power cost and industrial rates in a country 42:58that's not too expensive then you can make something like uh like 10 times what you pay for electricity only if you're in classic and it's a bit better it's a bit nicer for you on on ethereum but all the film classic is is 43:18getting closer and closer i mean a few days ago ethereum classic was still at one thousand percent and ethereum was at something like something like uh one thousand one hundred so they were very close now the another gap is a little bit large 43:36what is this going up and down so that together the general trend is good that the profits are going up this is this is what this is what we want to see and 43:54and yeah let's quantify that um you know the on a return for so excluding power um you know the mining profitability on ethereum is 5.4 cents per mega hash and um you 44:13know on etc it's 3.8 cents per megahertz so the gap is definitely closed i think it's 70 of the profitability of of et h you know compared to about if i recall correctly was about 40 of the profitability and 44:32of course this exclusive power so that's the you know that's a hardware agnostic comment is that the the price of etc in terms of overall liquidity requires 44:52a lot less in terms of fluctuation than ethereum in order to double or triple or nx so that profitability has potentially much easier percent potential to uh to uh match 45:10and coin price i'm 45:27looking here at our charter etc btc chart and we can see that in march etc has moved against btc uh like 77 higher 45:53the uh the trainees leaving the platform and uh yeah if you haven't bought it yet now's the time so which will occur in about two weeks in 46:12april so mid-april we will see the fifteening happen which basically is reducing the block rewards with 20 on 46:29twitter if it's okay the question was how 46:46much time did you manage to huddle etc the first answer was one month i'm a noob it got seven points five point seven percent six months six months i hate bears it 47:06got nine point eight percent votes one year i get the tag it got 51 0.8 uh six years code is law 32.6 percent so this 47:26this pool which got 193 votes is showing that the ethereum classic has uh has a strong base layer of investors who who are willing to to huddle the 47:45the coin during both trends both bear and bull trends one pattern that i've noticed looking at those charts is that ethereum classic seems to settle down at a level 48:05and it has a very strong sort of uh uh base layer as you mentioned uh it never never really dipped below much in the in the last two levels that it 48:19was at there was a message in the community called chat channel from uh werner 48:37about uh the bloomberg article and uh basically saying that i i'm gonna quote what the article says just so we can straighten out whether or not they were telling the truth here but uh i quote theorem classic got started when summer theorem miners refused to upgrade their 48:57software to reverse a hack that impacted an ethereum project called the dao back in 2016 theorem classic created after a 2016 software change for the most used blockchain has jumped more than 80 in the past week not 49:20strictly incorrect but it's also not strictly correct so ethereum classic itself wasn't created maybe the name was applied for the first time but i think it can be would 49:39be nice if in future it was uh properly sort of explained what what actually happened because ethereum classic wasn't really created at the dow fork it was a theorem that was created so uh yeah i i'll give them the benefit of the doubt here and 49:58uh i retract my previous statement about 50:00bloomberg 50:00lying 50:30if if we should really put too much focus on who from whom um because it's i mean it's largely irrelevant by now being both exist and both have have years of hit of their own history and i guess all the all 50:50the old battles died down largely right now so don't really think it it adds a lot i mean it's more i think it's more important to to emphasize what are the characteristics 51:07and what are the the values that one has and the other doesn't and uh you know because it all it also may come across as kind of petty if you always bring up this thing um which doesn't really have well i need to 51:25say it is a historical interest but it doesn't it does it doesn't really have an effect on what's happening today i would say i i i would push back slightly on that because i think one of the the misconceptions is that ethereum classic is just like a kind of throwaway like 51:44uh [Music] like a a fork of ethereum that never really got traction and just some some like a handful of guys got together and was like oh we can make some money out of this basically it's some kind of scam right and 52:02there are a lot of other projects that are sharing that characteristic of just being just another fork but i think the history here is pretty important and film classic being something different to that can 52:21i think potentially have a lot of value in terms of the narrative that it's not good to sort of uh be be petty about it but i think at least sort of um demystifying 52:40that belief that it is just another sort of scattering project a fool project 53:02should uh evaporate as it grows so that may not be a big issue much for much longer if if the actually people who believe it's it's a scam project i'm not sure about that either i mean it's been around for a while so and yes it hasn't been doing as uh hasn't 53:21been growing as as much as they filmed it but that's that's that's that's that's also part of the history that we have to live with and um it can only be eradicated by growth and not really by explaining the historic roads 53:40because it's it's already a historical fact that if we improve more than ethereum classic did and the film classic suffered because of its smallness things will eventually fade away because 53:58they are just just history but don't have much to do with the present anymore the 54:17points of history at one point maybe have been a bit more sore than they are now so yeah potentially time 54:25to let that go upon 54:46reflection uh ethereum classic is now valued at like 6.5 billion dollars which is quite a feat for what would otherwise be uh considered a scam project but uh that is certainly not and uh i 55:04guess congrats to everyone and kudos for you know contributing and being on the train because uh it's been a lot of work and a lot of time a lot of uh contributions and effort so it's finally seemingly uh yielding 55:23some reward if we look at the addresses metrics which i follow from time to time we can see that addresses with balances that have more 55:43than 100k went up to 2044 addresses with balances that have more than 1 million in edc also went up to 566 more 56:05than 10 million millions in etc are about 84. 56:19and speaking of wales that brings us nicely to the final article that was released this week by none other than grayscale the company who is that's owned by uh some 56:36might say the godfather of etc mr barry silbert from greyscale giving etc a bit of attention and love that is definitely deserved show notes and you can bruise 56:55it at your leisure but it's basically uh i'd say a more accurate and in-depth uh having the same topics as to etc's recent 57:10price rise it points out that the expected increase in hash rate hasn't necessarily happened yet even though miners will eventually switch in the 57:29future and the price can rise in anticipation for that but it might not translate immediately into an increase in hash rate because their plastic is still not as profitable as ethereum right now but we can expect that the the hash rate will jump very significantly 57:46when uh when there's no other options that 58:11with an increased hash rate etc becomes more secure and it may attract a lot of development in the new in 58:23the near future whether or not hashrate follows price or price 58:41files hashrate and i i'm starting to come to the opinion that uh it's there's no like causal relationship i mean there is a slight causal relationship obviously between increased price leading to miners selfishly mining the chain but in terms of long-term brands 59:02i would suggest that the increase in miners in terms of in interest in the chain is potentially what kicks off the increase in price as the causal like first thing that happens so i think it it really just depends on what kind of time you're looking at in terms 59:19of scale whether that immediately causes a price rise probably not it might have a short bump but i think in the long run the additional mind share will definitely cause a price rise this is not 59:38financial advice the profit so if um if they can choose between multiple coins and especially if they're close if they're closely 59:56related like currents in the in the atr family um then they will occasionally look at that uh it's the profitability and if the ceo knows this other coin is not doing much better or than the one that i'm currently mining or 1:00:14also if they see that the coin that they're currently mining is up is planning to do something that they don't like that will not not make the mining uh uh not will not allow them to mine profitably in the future like what is what ethereum is doing and and 1:00:33the second best is is already closed then this can motivate the change and um i guess it depends on and there's basically an individual difference between minus how often they they consider changing so miners can also sit sit on a in a very unprofitable situation 1:00:53for a long time simply because they they cannot be bothered to to to make it make even a small change but that's the difference from from minor to minor and if you look at the graph i posted in the 1:01:12call notes and then you go over to two minus for the ethereum classic hash rate then you and you look at the one years of the the data from from from one year from from this year sorry and then you will 1:01:30see that the profitability graph probably the ratio graph between ethereum and if ethereum classic um quite closely mimics the the ethereum classic hash rate so i 1:01:50would say that this this is some one thing that most of the miners will pay attention to when they're comparing profitability the relative profitability so if we go get close to to matching ethereum then minus will come over and if we have a large gap then they will they will go they will 1:02:10go back to ethereum and the same thing will happen to a lesser extent if the if with the other with other coins i mean for for for asics it's the it's potentially all the other type 1:02:27coins and for gpus it's a few more like like raven and the by 1:02:44the profitability ratio hq is also uh if i look at the at etc's profitability alone and 1:03:02then it also bears some similarity um to the ratio so this this has a strong strong influence on the really profitability ratio and then not so many um common elements that would between iffy and minifum plastic that would 1:03:22offset any changes that a lot of miners are just gonna be forced to mine a chain like etc even if it's not profitable they'd 1:03:41rather be utilizing their hardware for future potential upside as opposed to just turning it off and having to go to the effort of disassembling their rigs and stuff and that's probably going to be quite a significant amount of uh hash rate doing that and that in turn causes them uh 1:04:01to have more interest at etc and contribute to contribute in other ways than just hashrate to continue mining even if it's if it's not profitable um for at least for some time in the in the 1:04:20hope that it will become profitable again and um may or also that's the that we'll uh we to actively become profitable when the coin value uh way arises then they will have mines um some etc that were not profitable at the time but if the value say doubles then 1:04:41it will have been profit it will make the the the coins that i have mined profitable so yes there can be discord these calculations eventually of course if if mining remains unprofitable for them for example because the power costs are too high or generally operational costs are too high and 1:04:59the value is too low then then eventually they they will have to give up because this that keeps the the energy companies are alive and so but 1:05:18yes there can be a long transition period where the miners will will not stop even though it's not profitable at the time for them arise whereby only the very small like one or two rig 1:05:38miners are incentivized to mine because they care relatively little about the economy of scale of electricity cost and for them it's more of like the main overhead is just the hardware and it's more of a hobby thing so it could potentially decentralize the network more i would 1:05:56be the big type of scenario where mining is terribly inefficient i mean in terms of profitability but they still maintain the the loyal miner base and um yeah i'm not sure if this makes a big difference 1:06:16i mean one big farm can make up for quite a lot of small miners so i would expect i mean a big farm can [Music] can afford more efficient hardware so that they can be they 1:06:34can be equipping the farm with asics and there can be there certainly are farms that uh equipped with asics that are not on the market i mean there's this uh antminer [Music] i think it's the 1:06:53the the a a 11 which i think hasn't been seen on the market and all these probably go into [Music] into self-mining by the by the manufacturer also 1:07:21enough production to sell the general republic so there's also a relatively small group of operators which have a large number of miners and again this is a one of the more power efficient miners um so you so you get these these concentrations and then you get all the large 1:07:40farms the large gpu farms which general which may also have bought equipment that is power efficient and which is of course more expensive too but it makes sense for them because they really um i mean it's their business 1:07:59so they want to optimize the the spending pattern and of course all those bigger operators will tend to get to will tend to operate in places where they get a good price for energy so they will not be sitting somewhere in a residential 1:08:19area in germany where they are paying for their nose for for electricity but they might be sitting somewhere in siberia or or norway also um where they get a cheap hydropower that costs them less 1:08:38than a tenth of of what others are paying and large operators have a natural advantage simply by a economy of scale and they are not likely to get pushed out 1:08:57so quickly so while there can be a significant number of small miners who just just keep on mining for the love of it and even if if they're actually losing money um they will not really change this 1:09:15situation so so i think the the large operators are much more likely to to not have to fold um than than small ones already because they they will they will tend to have better 1:09:30energy costs we have uh breached the hour and as always we 1:09:50will open up the floor if there's any final questions or comments and if not we will wrap things up about etcg if if 1:10:09we have investors or traders looking at the chart we can see a good push [Music] the 1:10:29greyscale plant yes so it had a very long bearish trend and uh with we saw that after etc went up very fast etcg 1:10:48is also making a bullish making a bullish trend on the daily and i'm also expecting uh at least indicators are showing like macd is showing on the weekly uh reversal 1:11:08so edcg may make a very strong may have a very strong bull trend in the near future so it's worth checking that out all 1:11:31grayscale products anyone would like to join us on a future call either 1:11:50as a guest or as a just a contributor we would very much welcome uh your contributions so please uh do reach out if you'd like to to say something we 1:12:09will wrap things up for this week thank you for joining us another fruitful conversation and uh yeah see you next week probably same time at the same place bye-bye

Grayscale, Binance Pool, Bloomberg Coverage

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