Wednesday, March 6, 2019

Betting on rain ☔️

March 6, 2019

Chinese Bitcoin Miners are Betting on Rain to Keep Energy Costs Low

For the first time in more than a year, miners might be seeing some signs of life.

According to a new report from Diar, Bitcoin mining gross margins have fallen every month in the last year due to dropping Bitcoin prices and growing energy costs.

This February, however, gross margins shifted back up - breaking the bearish trend and showing a positive outlook for the industry.

What's behind the bump?

At the same time Diar reports, news from China is circling that miners are rapidly expanding capacity ahead of this summer.

The reason? Rain. China's southwestern provinces of Sichuan and Yunnan see large rainfall totals that power hundreds of hydropower stations - meaning cheaper electricity and more profits for miners.

A few have already taken this bet. Hashage CEO Xun Zheng told CoinDesk that "the interest is definitely there" as he moves to fill up open slots for his Sichuan-based mining operation.

Still a risk

While some miners are joining Zheng with enthusiasm, others remain skeptical.

The main worry among participants is Bitcoin's price dropping below $3,000. In that event Zheng says that "lots of miners may have to pull the plug again."

If Zheng's bet on heavy rainfall and low market participation plays out to Hashage's favor, the firm could see an edge over competitors and heavy profits. If not, Hashage itself may be forced to "pull the plug."

MINING

College Students are Cashing In on Crypto Mining Because of "Free" Electricity

According to new research from Cisco published in PCMag, college campuses are the second largest cryptocurrency miners.

In front, energy and utilities lead with 34% of traffic but college is surprisingly close with 22% of traffic.

That's because dorm rooms often pay for energy costs, or rather it's a flat rate that is included in tuition. Since equipment is the only other large cost associated with mining, students are getting a free pass into profits.

Cisco researcher Austin McBride said it best:

"You leave [the mining rig] running in your dorm room for four years, you walk out of college with a big chunk of change."

Banning miners

On some campuses the trend has gotten to the point where schools need to say something.

Back in January of 2018, Stanford posted a warning against crypto mining in dorms saying that school resources "must not be used for personal financial gain."

Other campuses have banned the equipment because mining setups are a "fire hazard."

Still, students are good at hiding anything in their dorm rooms and it's likely that many college miners will continue taking advantage of free mining profits while they can.

MAKER

MakerDao Users to Vote on "Stability Fee" to Help Correct Dai's Dollar Peg

MakerDao (Maker) developers are going to let users vote on the idea of a "stability fee" to help peg Dai (DAI), a USD-backed stablecoin that is part of the Maker ecosystem, to $1.00 in a better way.

For now this fee is set at 1.5%, but still the Dai stable coin has seen incorrect trailing exchange rates. Now, that fee could jump as high as 5.5% after an initial hike to 3.5%.

Already in favor

An official blog post from the developer team announced that the vote will happen this week, however, it looks like it's already in favor from "informal polling."

Maker also told users that if the favorable vote goes through, it will not be off-putting and could even be temporary depending on the market.

BITS

But wait, there's more...

🇯🇵 Five Japanese banks have joined to collaborate on a blockchain-based financial services infrastructure.
🧐 Chainalysis releases statement regarding user data after Coinbase allegations arise.
💰 Argentina's government is looking to invest in early stage blockchain projects backed by Binance Labs.

MEME