correlation myths and mysteries, crypto doom of asics
Updated
So back to basics, without any background in economy, financial trading, except experience, logic and an analytical mindset.
by overlaying S&P 500 with btc, you see that both move in similar ways, with S&P slightly leading BTC.
does this mean we can predict btc's direction with S&P 500 as guideline? guess not as they are totally not coupled.
S&P relates to bussiness and the trade in big players in the economy of the world.
BTC has no direct relation to the real world, it is in some sense tied to certain Fiat currencies, as btc is the main value being used in the crypto currencies trading platforms. High activity on the overall crypto market, causes btc to move its needle.
But there are obviously other factors at play too. big holders can move the needle as well. with the majority of BTC hashrate in china, and the fact that the main BTC pools are also in chinese hands, means that they have a leverage that is disproportionate, and they are capable of moving the BTC needle in whatever direction they want.
just an imaginary scenario, say all the big BTC pools dump their holdings in a fell swoop when price rides high.. you evaporate billions of value. which will impact the economy.
would a spread portfolio over multiple crypto currencies help? No it will not, look at the historic graphs overlay btc with any other coin, you will see that they rise and fall with BTC, some magnified, some reduced, but if btc drops to 1$ some day... the rest of the coins will be a fraction of that.
doom scenario .
that is why it is important to support asic resistant coins. XMR did a good attempt, but I am afraid the changes are not big enough to deter the asic builders. asic design used to be very expensive, nowadays its not the case anymore ROI is reasonable if you can have a few months of runtime out of your asics. which typically use low power, combined with high hashrate. ( 10-20x compared to best ( and expensive) GPU's at a fraction of the power)
try to run 10TH/s btc with GPU cards, calculate the power draw including cooling and aquisition cost... system board 100$ GTX1080ti 1000$ * n ( 4GH/s per card : n=2500) =2.5M$ gpu's with around 450 KW of power which also needs cooling. with cheap electricity -> .01 $ / KW -> $4,50 per hour :), this leads to a loss of $4,25 per hour, aka as a yearly loss of 37K with ROI to infinity.
then compare to a antminer of similar performance, look at the power draw including cooling ( running cost) and aquisition cost
example Antminer T9+ 10TH/s -> 1406W... hourly profits : 0,24$ yearly $2075, break even in 201.9 days.
so the question is, has S&P been influenced by BTC manipulations or does the S&P influence btc ( macro economic behaviour)
to be continued
by overlaying S&P 500 with btc, you see that both move in similar ways, with S&P slightly leading BTC.
does this mean we can predict btc's direction with S&P 500 as guideline? guess not as they are totally not coupled.
S&P relates to bussiness and the trade in big players in the economy of the world.
BTC has no direct relation to the real world, it is in some sense tied to certain Fiat currencies, as btc is the main value being used in the crypto currencies trading platforms. High activity on the overall crypto market, causes btc to move its needle.
But there are obviously other factors at play too. big holders can move the needle as well. with the majority of BTC hashrate in china, and the fact that the main BTC pools are also in chinese hands, means that they have a leverage that is disproportionate, and they are capable of moving the BTC needle in whatever direction they want.
just an imaginary scenario, say all the big BTC pools dump their holdings in a fell swoop when price rides high.. you evaporate billions of value. which will impact the economy.
would a spread portfolio over multiple crypto currencies help? No it will not, look at the historic graphs overlay btc with any other coin, you will see that they rise and fall with BTC, some magnified, some reduced, but if btc drops to 1$ some day... the rest of the coins will be a fraction of that.
doom scenario .
that is why it is important to support asic resistant coins. XMR did a good attempt, but I am afraid the changes are not big enough to deter the asic builders. asic design used to be very expensive, nowadays its not the case anymore ROI is reasonable if you can have a few months of runtime out of your asics. which typically use low power, combined with high hashrate. ( 10-20x compared to best ( and expensive) GPU's at a fraction of the power)
try to run 10TH/s btc with GPU cards, calculate the power draw including cooling and aquisition cost... system board 100$ GTX1080ti 1000$ * n ( 4GH/s per card : n=2500) =2.5M$ gpu's with around 450 KW of power which also needs cooling. with cheap electricity -> .01 $ / KW -> $4,50 per hour :), this leads to a loss of $4,25 per hour, aka as a yearly loss of 37K with ROI to infinity.
then compare to a antminer of similar performance, look at the power draw including cooling ( running cost) and aquisition cost
example Antminer T9+ 10TH/s -> 1406W... hourly profits : 0,24$ yearly $2075, break even in 201.9 days.
so the question is, has S&P been influenced by BTC manipulations or does the S&P influence btc ( macro economic behaviour)
to be continued
Note
oh just a side note baikal and bitmain had cryptonight asics in operation since last fall, it is unclear how long exactly, but they were running single units with 200KH/s on xmr which brought them a nice profit, it ran a ROI of 6 days. so after 6 days they started making a profit. we now know that about 50% of the hashing rate was asic ( drop was more than that when XMR v7 started operation. that means there was 500MH/s operational. they made around 14M$ profit / month, if we assume they were online for 3 months.. thats more than enough to cover the cost of asic development.
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