Crypto mining report

Mining bitcoin became less profitable in 2022 as hashrate (the electrical cost of mining bitcoin) increased, while bitcoin tumbled from an all-time high of $69K in November 2021 to under $17K at present. Crypto is being propped-up with everything the US financial system has left. There are a lot of billionaires & multi-millionaires who are VERY upset at the prospect of losing a massive chunk of the portfolio invested in crypto.

In 2022, the stock prices of the five biggest public crypto miners by hashrate: Core Scientific ($CORZ), Riot Blockchain ($RIOT), Bitfarms ($BITF), Iris Energy ($IREN), and CleanSpark ($CLSK) traded down 99%, 85%, 91%, 92% and 79%, according to CoinDesk. What’s going on in the crypto industry is a massive restructuring, with a few big fish eating all the little fish. New rationalizations are needed to reassure venture capitalists in their support for the flagging crypto industry. If investors stop giving crypto money, then it’s lights out– literally.

Miners are hardcore crypto fanatics, so they tried to hold onto the bitcoin they mined, often electing to finance operations with low-interest debt, venture capital, blank check companies, etc. Perhaps pitch the idea on Shark Tank, which coincidentally appeared around the same time as bitcoin. The point is that bitcoin mining companies, who are in the business of mining bitcoin, weren’t making the BIG money in crypto.

Miners were contracted to make money for whales, who financed the mining of bitcoin. For instance, if Elon Musk contracted a massive amount of bitcoin to be mined from various bitcoin mining companies, the bitcoin would be delivered to him while he paid the consortium of miners for the service, presumably in bitcoin. This would support the industry as long as the price of crypto went up and money was cheap from the Federal Reserve.

Elon Musk’s financial Waterloo was his commitment to buy Twitter for $44B last spring. When his bitcoin empire crashed, soon after his takeover announcement, he began to back-off on buying Twitter. By summer, when Twitter shareholders threatened to sue & win in court, Musk was beaten. Elon Musk was heralded as the wealthiest man in the world by Forbes, with a value of $264B as of 2021. So here’s a modern economic question: Why couldn’t Elon Musk just buy Twitter for $44B, and be secure w/ $200+B remaining in personal wealth? Answer: Because his wealth was never real. It was mostly inflated crypto, and you can’t buy a publicly-traded company with bitcoin. Forbes is a central player in this fictitious accounting.

Elon Musk’s choices to finance his Twitter acquisition were to A) liquidate bitcoin; or B) liquidate Tesla. Tesla is WAY overvalued, and Musk knows this better than anyone, so him selling huge shares of his flagship electric car company tells the story there. If bitcoin recovers, Elon Musk is king again. If crypto goes to zero (which it must), then Musk is dust. When the stock value of Tesla collapses, as it must, Elon Musk won’t have any real money left. The more Tesla stock Musk sells, the sooner this will happen.

As poorly as Musk has run Tesla, his short reign as Twitter CEO has been qualitatively worse. Maybe Twitter was worth only a quarter of what Musk paid for it, say $10B. But that’s still an asset, and the second-largest social media platform on the internet. At least manage it decently for awhile, then take it public again, or sell it & eat the loss. That would be a rational business strategy after making a big mistake. But instead, Musk destroyed Twitter through a series of tirades, boneheaded ideas & tantrums. Now, Twitter isn’t worth $2B. These new-age millennial entrepreneurs have trouble producing value in the real world. They always need more money.

Turning to the unending crypto saga of Sam Bankman-Fried, the Securities Commission of the Bahamas has taken custody of FTX deposits valued at more than $3.5B as of November 12, according to a media release published last week. The November 12 date is significant, because the murky, murky $383M FTX hack, live-streamed in this video, happened during the evening of November 11, while SBF was in Bahamian custody. So where is the money?

The government of the Bahamas is in complete control of $3.5B in crypto, which the US government wants for itself. Bankruptcy trials take a long time, and this is largely a jurisdictional battle for the spoils which is to be hashed-out by lawyers, financial officials, opportunists, etc, on both sides until all the money is divvied-up to the right people. This is how governments steal for themselves in the name of their people & democracy.

The crypto community is facing an existential crisis. The vast majority, who have worked to build this industry, in mining, computer programming, sales & promotion, etc, have been shucked & jived by modern-day shysters. Calls in the fake media for regulation are a smokescreen, as crypto will never be regulated by US Congress. A few years back, during the Trump administration, Facebook CEO Mark Zuckerberg was compelled to testify before the US Senate for a regulatory hearing. The most memorable moment was when a crusty septuagenarian senator asked Zuckerberg how Facebook made money? The Facebook CEO smiled to himself & replied, removing as much condescension from his voice as possible, “We sell ads, sir.”

That’s typical of the level of fundamental cluelessness in elite politics. Crypto with its blockchains, decentralized finance, off-shore shell companies, etc, is much more complex than the nuts & bolts of social media. Not only is regulation unwanted by the industry (and Republicans), it’s unthinkable because no one in bourgeois politics has a clue how to deal with this mess. No politician wants to be seen as “impeding the free market,” and no politician wants to get dragged into these crypto scandals any further. You know it’s really bad when you see corrupt politicians insisting there are returning FTX money.

Calls for “regulation” in articles discussing crypto should be always interpreted as “bailout.” Eventually this crypto bubble will burst, and unlike the sub-prime crisis of 2007-08, there are no assets to recoup here. Millions of homes with defaulted mortgages were transferred into bank ownership in the wake of the 2008 financial meltdown. This was done to make bankers & hedge fund investors (who caused the meltdown) whole again. They were too big to fail. But the soon-to-come crypto crash will leave nothing to be recouped, because it’s been a fake asset from the start. US & Bahamian regulators are fighting over custody of $3.5B in fake money, and who winds up with it is beside the point because it’s worthless.

Meanwhile, Sam Bankman-Fried is out on bond, living with his parents who are co-conspirators in the $32B FTX/Alameda swindle. The effectively altruistic boy genius came up with a better way to mine crypto. Instead of having a series of supercomputers mining the crypto by solving complex mathematical equations, SBF just made up his proprietary FTT tokens out of thin air. This saved energy costs, and the expense of contracting crypto miners. This way, SBF made super-profits! Crypto skeptics point to Binance’s native BNB token, and ask if Changpeng Zhao created them by the same process.

Sam Bankman-Fried has surely violated the terms of his bail by moving large amounts of crypto from hidden Alameda wallets after his release on bond last week. SBF denies this, of course, as his parents are there to punish him if he does anything wrong again. The problem with crypto isn’t SBF, per se, it’s capitalism & the flawed idea that you can create value from nothing.

Update: Wed Jan 4, ~8:45AM CST

SBF was allowed to be free on bond, and violate those terms by moving large amounts of crypto out of Alameda wallets to unknown accounts. Unknown to the public that is. The US government knows where the crypto is, because undoubtedly they have been monitoring his computer, but they aren’t revealing anything they know to the public which is normal. SBF is acting as a personal tutor for US intelligence agencies, etc, in how to move crypto. Notice how names are always redacted when his legal team requests it, etc. Since when has such a swindler been allowed such clout in a DOJ prosecution case? Normally, targets of the DOJ receive no mercy, unless they plead guilty– or cut a secret deal. SBF pled not guilty, yesterday, as expected. SBF should now be considered as an agent of the US state. It’s the only way he can save himself.

Final thoughts: Thu 05 Jan 2023 6:43 AM CST

The crypto community is learning the hard way, that BIGGER interests (such as the US-provoked war in Ukraine) override any claims of crypto theft. The most logical explanation for SBF’s ‘not guilty’ plea is that he made a secret deal with US intelligence to save himself. These demoralized libertarians are in WAY over their heads here.

Crypto believers have hyped bitcoin with an impressive amount of enthusiasm & bravado, but never answered any fundamental questions posed to them over the years. They display a staggering level of naivety & ignorance in the fields of economics & politics. And yet, in their collective moment of stunned disbelief over the reality of how quickly dreams can evaporate, they maintain they are correct. The Federal Reserve & US Intelligence are the primary forces keeping crypto alive. Crypto is a money-laundering tool, that’s it’s only use value.

Any talk of SBF being an asset of US intelligence will now be branded as “conspiracy theory” in the fake media.That’s the Big Lie playbook they run on the public. This conspiracy theory is backed by the facts and the events as they are unfolding, which strongly implies that it is correct. US Intelligence always lies & evades to minimize exposure of an asset, especially a big fish like SBF, who is teaching them new & better ways to move crypto. This helps Joe Biden work with Republicans in funneling funds to the neo-Nazis in Kiev in the name of fighting Russian aggression which keeps us safe from terrorism.

…………<><><><><><><>………..

Coronavirus War update: crypto collapse

Effective altruism has melted away and it’s been replaced by the slogan– make investors whole again! Especially the small ones, because they can least afford the losses, blah, blah, blah…

As a socialist, I feel very little sympathy for anyone in the crypto market. It’s been a scam from the start, and if you didn’t recognize that, then you deluded yourself. These fanatics are capitalists to the core, who do no productive work, and only got into crypto to make money for themselves. They look at all the odds stacked against them, while ignoring simple logic (AKA– FUD), to make themselves believe they can get something for nothing. People have to learn at some point, and while cases like Elon Musk (bitcoin whale) are beyond hopeless, those who can’t afford big financial losses in crypto are just as much part of the problem. Their fundamentalism blinds them.

These wanna-be’s envy criminals like Elon Musk, the fascist billionaire. Taking a look at his CV for just the past few weeks, Elon Musk has drained his core company Tesla, selling it’s stock at a premium before it goes bust, to finance his takeover of Twitter which has cost him tens of billions of dollars to date. He had to do this because all his bitcoin busted before he’d done any due diligence on Twitter, but after he’d committed to buying it. Some genius huh? So now, advertisers & users have abandoned what was once the 2nd-most popular social media platform, as Musk took it over and turned it into a toxic wasteland. Twitter has gone the way of MySpace, via Mein Kampf.

Even Donald Trump, who has 88 million followers on Twitter, won’t return to the platform after Elon Musk re-instated his account with much fanfare. Trump started Truth Social, his proprietary platform, on which he posts exclusively– to his 2 million followers. Donald Trump wants to be president again, yet he accepts 1/44th the social media reach, because more importantly he wants to make money for himself. Trump does this by pumping his brand. Every other industry he’s ever branded himself in has gone bankrupt, or if it’s still in existence, is under federal investigation for tax fraud or some other form of criminality.

So of course, Donald Trump has now launched his own crypto, a $99 NFT of trading cards in his image. It will be worthless in the near future, but you can still own those images & digits in cyberspace. Of course, if you keep them in a cold wallet with responsibility for your own keys, you will lose 99% of your crypto, according to Changpeng Zhao, the Binance CEO & crypto whale.

It’s tough to pass on crypto when you die because 1) the keys are hidden and hard to get to, because if they aren’t, you’ll get hacked and lose everything instantly; and 2) inheritors often aren’t familiar with the crypto world, and thus getting through all the online steps needed to liquidate can be an insurmountable task. Even with crypto exchanges such as Binance, this is an issue, but Changpeng Zhao didn’t mention that.

Some crypto industry leaders who got burned in the FTX collapse, are now calling for regulation. Crypto is deregulated finance by definition, hence the industry term “de-fi.” According to the libertarian economic model, de-fi opposes centralized finance, breaking the bounds of national banking by creating an international currency on the foundations of freedom & privacy– [* until it all collapses and they need a bailout]. What libertarians never strictly define are these emotionally-charged terms: freedom & privacy, which means they can mean anything. To SBF & Co., it means the freedom to embezzle everyone’s crypto on his exchange in the privacy of his luxury villa in the Bahamas.

That’s life in a post-modernist world, and it’s what happens when you are too lazy to strictly define important core values within the community. The ‘crypto community’ was built on vague altruistic ideals which could be changed or discarded at any time, by any actor, because those were the rules everyone allowed from the beginning. The crypto community isn’t the cooperative idealistic paradise it markets itself to be. Just about any crypto investor would steal a kajillion dollars of crypto if they thought the could get away with it. How can anyone regulate with these industry-wide ethics? Crypto has been around for only thirteen years or so, and yet its demise is imminent.

Crypto lacked a credible core philosophy to justify its existence. Ask any crypto believer, and none of them will take you any further than what I’ve just spelled out. It’s all about making money by doing no real work. These are lazy & privileged kids along with mathematical whizzes who learned computers, but got on the wrong track from the start. None of them understand the fundamental nature of money and what it represents. They just want to create an algorithm that makes money for themselves. Crypto-currency is anti-productive & anti-social to its core.

No more cheap money from the Fed, along with rising costs for electricity to mine crypto, means this fake industry is about to go tits-up. Only massive infusions of liquidity on a daily basis (from a central source) are keeping this crypto boondoggle afloat. The big hedge fund investors & venture capitalists are already lining themselves up for another bailout. Congress will have bi-partisan support for this, but the rub is the crypto industry has been so discredited in the eyes of so many people that another such corporate bailout is a tough sell politically.

The crypto industry is a joke because everyone in politics has taken money from these criminals, but none of them can clearly explain why crypto has value. The same applies to economists, industry experts, talking heads, etc. Tens of millions of dollars a day (minimum) is what is going into the crypto market to keep it “legitimate.” Cold wallets won’t save any investors because it is the crypto itself (bitcoin, ether, etc) that is worthless. Blockchains are becoming too costly to maintain due to rising energy prices. This inflation crisis has been caused by unlimited QE for over a decade, and accelerated by the disastrous official response to COVID-19, and the US-provoked war in the Ukraine.

Bitcoin’s value to the ruling classes is that it’s a tool for laundering large amounts of cash. Imperialist governments & their intelligence agencies have many uses for this, all nefarious & undemocratic. So the question of questions for SBF & Co. in the wake of the FTX/Alameda Research scandal is: Where is the money?

Where did all that crypto go? What about FTX’s ‘Aid for Ukraine’ campaign launched last spring? Where did all the aid money go? Who was/is connected to all this? Both the Democrats & Republicans have prominent figures in their upper circles who participated in this criminality. The first step in damage control is to silence SBF. His arrest in the Bahamas on Tuesday (Dec 13), after weeks of delaying, was timed to prevent his sworn testimony, via Zoom, to US Congress. Tens of millions of people would have watched that, waiting for bigmouth SBF to spill the beans on everybody. As mentioned in my last piece on FTX, this case has Jeffery Epstein-type implications, and must be handled very carefully by the ruling elite, otherwise the truth will get out and the establishment will be publicly discredited.

The crisis of capitalism has become an existential issue, so what is at stake is the ruling class’ right to rule. If politicians and their media apologists can’t convince the working people to bail out the crypto industry to avert an “economic collapse,” then the game is over. This is their greatest fear being realized, and their only answer is more lies, more attacks on living standards, and more hate & violence. That’s what happens when you start with no ethics and then become financially bankrupt.

For the ruling classes, any major wildcat strike or other form of labor shutdown can only be met with media hysteria & demonization, followed by physical attacks from right-wing goon squads aided by the police, intelligence agencies & the military. Workers & youth must organize into workplace & neighborhood committees with the goal of taking control over worker production & neighborhood safety. Uvalde proved, without a shadow of a doubt, that the cops have no interest in protecting teachers & children, etc. Productive workers & youth must organize & unite to protect each other from the propaganda & violence of all the world’s ruling classes.

The Coronavirus War concludes it’s third year with an increase in fascist propaganda & policy by every nation. In China, the origin of COVID-19 from human-animal crossover in a Wuhan wet market, the ruling bureaucracy has just ended its Zero-COVID policy which had been successful for its duration, but only within its borders. COVID-19 is a global virus that mutates constantly, and is increasingly evading vaccine immunity. US President Joe Biden has declared the pandemic over, when clearly it isn’t. Trump denied the pandemic was real, so Biden is merely following the fascist policy of his predecessor. That’s what Democrats do, as anti-science reigns supreme in the pseudo-academic, liberal, middle-class milieu that is obsessed with race, gender & sexual orientation.

This crypto collapse marks a turning point in the Coronavirus War, which up to this point the fascists (of all stripes) have been winning. Fascist ideology has long-since been rejected by the working masses of the world, while right-wing corruption rules over them. Now, fascist money is becoming increasingly worthless, which makes it harder for them to buy people. This weakness is being exposed daily, in the collapses of crypto exchanges & lenders. Crypto auditors (who love their big fee$) won’t even stand by their “all good” asset ratings anymore, deleting them from their sites, etc.

The leading industry site is Coin Desk, which is tangled-up in the FTX collapse in a myriad of ways. Fundamentally there is no honesty in their “journalism” because there are deep dark truths about crypto which they can never reveal– not even to themselves. When yet another exchange halts withdrawals, and Coin Desk reaches out to that company for a comment, it’s either 1`) No comment, unavailable, no response; or 2) public relations BS such as, “we’re working to make investors whole again… our fundamentals are sound,” etc.

So… where’s the money?

………….<><><><><><><><>………….

Crypto Crash

The problem with crypto currency is that it has no material backing, unlike fiat currency which has gold & a national economy behind it. Whatever DCA (dollar cost average) you apply to crypto, it is simply a made-up value. Pegging it to the dollar, or backing it with Treasury notes (so-called “stable coins”) doesn’t add any real value to the crypto itself. In economics this is known as an asset bubble or a Ponzi scheme.

Only massive speculation by interested investors keeps the entire crypto market from going to zero. On top of this, there is massive energy waste that is unaccounted for with crypto. Eventually, all this fictitious capital will get wiped-out, and that’s where crypto is going. That is a Marxist assessment.

Everyone in the crypto industry now knows Elon Musk is the Bitcoin whale. That explains why he just backed-out of buying Twitter for $43B, after planning its takeover for months and putting it into motion. His supposed $240B is mostly a giant asset bubble, built on fictitious capital in the form of crypto currency. The rest of Elon Musk’s wealth is stolen from super-exploited workers. With what he owes to banks, he’s probably bankrupt when the crypto market implodes.

Tesla’s valuation is a joke, and SpaceX is a boondoggle. I lived in Central FL, so I know all about what goes on at Cape Canaveral. It’s always on the local news. NASA has been privatized and contracted to Elon Musk’s SpaceX. His mad vision is to colonize Mars and commercialize space travel, but the problem is Musk can’t get a reusable rocket to land without exploding. Billions & trillions of dollars are being wasted on all this, with no progress & no end in sight.

SpaceX controls many of the satellites which have communication & military value. This is how the class war is being fought. We’re talking about the supposed richest man in the world being bankrupt in terms of real value. There couldn’t be a more damning indictment of capitalism than that. Everyone one of these billionaire tyrants must be exposed as a fraud and their wealth expropriated for public use on an international scale.

This all started on Wednesday, May 11 and has been a panic since Thursday, May 12. This is Bitcoin as of this publication on Saturday:

Elon Musk now has to put all his cash into Bitcoin to weather the storm and eventually re-inflate the crypto bubble. That’s his plan. How much longer can Bitcoin hold out? That depends of Musk’s support in the market, with working class awareness & resistance looming on the other side. If investors still trust him with their money, then Bitcoin will be made to look legitimate again. If the money dries up, Musk is toast.

The tendency of fascism is to maintain any useful demagogues, in case a fuhrer is needed. Donald Trump & Elon Musk are of the same kind– ignorant, ego maniacal mad men. They both personify the madness of capitalism in its death throes, and must be dealt with by the working masses of the world in order to prevent nuclear annihilation.

This is the realpolitik being discussed by elites privately. Once they are completely defeated ideologically, the elites resort to provocation, intimation & outright violence. The Proud Boys, etc, are their right wing paramilitary forces which are to be unleashed upon the working masses to maintain this ruling class madness.

If Elon Musk’s wealth can’t be maintained as believable, then fascism must step in to crush the masses, because a crypto market crash will bring down the entire global financial system. The notoriously corrupt US-backed dictatorship of El Salvador just officially adopted cryptocurrency as legal tender. This crypto crash affects that rollout.

It’s now apparent to many that there are serious issues of legitimacy & sustainability with Bitcoin and the crypto market. How long can this fiction be maintained to the masses? That’s the question no one in the industry can answer.

Money managers bankers, hedge fund investors, etc, found a way to make a lot of money off of crypto in terms of fees, commissions, charges, etc; but nothing productive was ever made from it. It’s been such a horrible waste. It’s fool’s gold in cyberspace that produces even more global warming.

What happens when every nation goes to war and you can’t connect to the internet or grid because fascist forces in every country control all of them? What is Bitcoin worth then? These are questions to be considered as the entire US establishment led by the Democrats & Joe Biden provoke the Russia-Ukraine conflict, threatening a world wide conflagration which ends in mutually assured destruction.

People need to start thinking in these terms because this is what’s going on. The Coronavirus War is the war to prevent WW3. It can only be won by the international working masses united under the banner of Trotskyism. Read the World Socialist Web Site and become a member/supporter, etc.

……………….<><><><><><><><><><>……………….

SpaceX Explodes

This capability will enable a fully reusable transportation system designed to carry both crew and cargo on long-duration, interplanetary flights and help humanity return to the Moon, and travel to Mars and beyond,” SpaceX said in a statement ahead of Tuesday’s test.

Tuesday, Feb 2, 2021  7:20 EST: It was a successful launch. It’s not the fall that kills everybody, it’s the sudden stop. Another data point on the privatization of NASA. My alternate title is “SpaceXplodes.”

Top comments from others: “Eh… ‘at’ll buff right out,” “Needs a giant Bitcoin sticker on it. Then she moons,” “SpaceX is a booming business!”, “Looks like Tesla stock once reality actually takes place,” and “That could be you.”

Ground control to Major Tom, your circuit’s dead, there’s something wrong…

That’s our taxes going up in smoke over some pie-in-the-sky delusion of grandeur.

This must be why Elon Musk insisted on being interviewed on NBC on MONDAY night, when he didn’t take any GameStop questions either.

Not a reusable rocket. FAIL

Under these results, humanity will never get to Mars. Musk is Trump 2.0.

In this modern-day reboot of Rocky Jones, Space Ranger (1954), Elon Musk is Rocky, and Jared Isaacman is Winky.

Bonus Short: Roy Thinnes in General Hospital circa 1964.

In term of physics, trying to land a rocket on it’s thrusters is like trying to land an airplane on its tail– meaning it’s physically impossible. This is because you can’t control an inverted pendulum in free-fall. But despite multiple miserable failures at this, Elon Musk is not deterred. As in Manhunt in Space (Rocky Jones, renamed), our billionaire entrepreneur must go back the the drawing board and re-discuss all this with his top scientists. The answer is probably in “cold light,” which should never be used indiscriminately.

SpaceX was founded by Elon Musk in 2002, and through his political connections, it has become the chief contractor & engineering team for NASA. The space shuttle program formally ended in August, 2011, so that Musk could design his own new vision of the future, which is the privatization of space travel.

Who is SpaceX charging to launch rockets & satellites? In the end, it’s all some form of corporate welfare. This second fireball disaster in less than two months (see video above) is an illustration of the folly, wastefulness & anti-scientific character of NASA under private control.

It used to be when something went wrong with NASA, there would be an explanation. Like on February 1, 2003, when the space shuttle Columbia blew apart on re-entry, killing all 7 crew members. We now know that something as small as a piece of foam insulation breaking off from an external tank, can strike a wing, and cause heat tiles to fall off. When Columbia re-entered the atmosphere, that damage allowed hot gases to penetrate the heat shield. Anyone can understand that.

But NOBODY can explain a fix for what’s happening here with Elon Musk. It’s been over a decade, and Musk still hasn’t delivered a Starship prototype that can land safely. It’s not even close. It’s time for the working people to change the leadership at NASA.

After this 2nd spectacular FAIL, there won’t be any customers for a “reusable rocket” that explodes into smithereens due to physical laws upon re-entry. To be truthful, we’d be further along in manned exploration with the space shuttle program, but Elon Musk had it killed to promote his personal vision, which is a boondoggle.

The only way I could think of promoting Elon Musk’s NASA delusion would be as follows: “Experience of a lifetime!! Your Twitter feed will blow up as you live-stream blast-off! Jettison yourself to the stars for your 15 minutes of fame! Re-entry will be a bummer, but you’ll get a helluva rating. A fifty-share, easy.”

………………….<><><><><><><><><>………………….