Where do new Bitcoins come from?
What even is a bitcoin miner?
Here’s one!
I am going to take this thing apart and show you what it is while trying to explain what
it does.
Now, I could be wrong - but I believe that what youre looking at right now is the ONLY
existing footage on this planet of a guy tossing an S19J Pro up and down, shot in 4k at 120
frames per second.
Its not every day you get to see something totally unique on this platform.
Basic construction of a bitcoin miner is.. just that, its super basic.
There is no screen - no interface at all, and the only button on the whole box is one
you’ll almost certainly never press.
Its a button to identify the IP address of the machine youre standing in front of if
you got a TON of machines or other things on your network.
This currently $3500 machine IS INDEED a computer, although it is its nature to do just one thing,
and that is dig up bitcoins.
This computer is incapable of checking your email or accessing the internet or really
anything else at all.
To use it, you literally just plug in the power and the internet, you access it from
a different computer on the same network; you type in some account information for a
mining pool and it starts going.
If you shut it off and move it somewhere else - you just plug in the power and the internet
and it just starts working again.
There isnt even an on/off switch on most of these!
Under this top metal square is the control board.
If this machine was a bee hive, this is the queen - storing data about the location of
the honey and giving the worker bees their marching orders.
There are a few different types of control boards for S19s - some of them come with a
microUSB slot and some do not.
This one doesnt have it, which means I can not overclock this miner - or run it on custom
firmware, which is helpful if I want to swap out the fans to use a bigger quieter fan..
I would need to spoof the fans with little microchips that go in the fan slots to trick
the control board.
Thats actually how this one runs, with those spoofers..
When it does run - which unfortunately it does not now because it costs more in electricity
at .14 cents per kilowatt hour at my warehouse then you get back in bitcoin, so it makes
more financial sense to just buy the bitcoin and give these a rest until the price comes
back up.
Moving around to the side - this larger metal square is the PSU, the power supply unit.
This one is an APW12.
The purpose of this thing is to take the electricity youre giving to it from the wall - in this
case that will be 240 volts at 60hz at my house or 208 volts in a commercial setting,
like in my warehouse.
Other countries use different voltages, England is at 230volts, China uses 220volts both at
50hz.
The Hertz rating is how many cycles per second the power is changing its direction of flow,
to oversimplify.
Because so many countries use different power specs - these power supplies do the job of
taking whatever you give it, anywhere between 200 and 240 volts and anywhere between 47
and 63hz and then it runs it through all of these gizmos inside there that you DEFINITELY
cant touch ever, no matter what..
Treat the inside of this box like a gun thats always loaded; in fact, dont ever open this
thing.
A guy named Mark from asic.to might reach out to you and tell you to solder in a few
transistors here and there to make this spit out more power -
just dont do it, you can literally die.
It takes all that dirty international power and it spits out 12 to 15 volts at a hefty
300 amps.
Isnt that interesting - your bitcoin miner runs on the same voltage as your car.
Your control board has conversations with the PSU also - when you are doing the overclocks,
its this little fella who’s telling these dudes to push out a higher voltage to the
bus bars.
These thick metal bars are what carry all of the 12 volt power over to the business
side of this Bitcoin Miner.
Following the bus bars takes us out of the PSU and over into the main body of the S19
where we will find the Hash Boards.
These unassuming little party pizza sized computer wafers are where all the work is
done.
These PCBs have fueled my entire year of 5-digit losses in other forms of crypto gambling.
There are 126 ASIC chips on each of these boards, and there are three boards in an S19j
Pro..
That means this machine has 378 processors running at ABOUT 600mhz - thats 600 million
cycles per second, per chip..
Thats the whole construction of a Bitcoin Miner - a power management system, a controller
and these hashin boards.
The price of Bitcoin is now low enough, and the difficulty of the network is now high
enough, that anyone with an electricity cost above around 9 cents per KWH will not produce
profit.
Its bonkers.
Its not just bitcoin, its kind of everything.
All crypto - almost all stocks; the price of gold, all of it.
BUT - and I’ve talked about this a couple times before, one investment that is managing
to keep its value and even make gains this last year, is art.
The market is so crazy there was in a single day last month
where 99% of all stocks lost value!
As a result, Goldman Sachs says portfolios need to be fixed, rebalanced,
And that the ideal allocation for stocks has shrunk from 60 percent, to around 45%.
So what do they recommend you do with that difference, in order to salvage your stolen
returns?
Invest in real assets, like fine art.
And data from morgan stanley backs this point up:
They report the average piece of fine art is selling for 26% more at auction, compared
to this time last year.
That’s through the turbulence of the first half of 2022,
when the S&P 500 lost -20.6%, over 9 trillion dollars,
The difference is surprising, and really exciting for investors looking to recoup some historic
losses.
So how do you invest in art yourself, without spending millions of dollars?
With Masterworks.
Masterworks lets you invest in multimillion-dollar works of art,
from legendary artists like Picasso, Basquiat, and Banksy.
These are not NFTs.
You’ll be owning real chunks of the real things.
Their team of world-class analysts use proprietary data, compiled from millions of auction records,
To source art with the greatest potential appreciation.
Then, they divide the paintings into shares,
So that you can invest without needing millions.
After that, they wait for the most opportune time to sell…
All to get you the best results.
Like an exit for a 21.5% net return just 3 weeks ago, at the start of October.
Once again, 21.5% net returns, that’s incredible, try to name anyone else doing that in 2022.
As a result, Masterworks has had to acquire and release more art on their platform to
meet demand,
and there is a wait list.
But you can skip it just by clicking the link in the description.
You may be under the impression that these Bitcoin Mining machines are solving very complex
math equations in a race to be the first computer to unearth the next block of Bitcoins.
I might have even been the one who told you something that sounds like that!
Depending on what level of math you made it to in school, the equations its solving, in
reality, aren’t all that complicated at all - they just take a shitload of tries..
Every ten minutes or so, a new block starts - data from the previous block is added to
the next block and there is a new ‘cryptographic function’ that needs to be verified.
In that moment, thousands of these machines around the world get to work essentially guessing
at whats called a Nonce, the correct value that when applied to the hash, will verify
the block and give that miner the privilege of packaging it up to be sent off to a node,
while receiving a reward for its hard work.
The nature of this work is to verify the legitimacy of Bitcoins transactions.
To simplify further, even though what i just said was a 5 page paper reduced to one paragraph
- Basically, Bitcoin Miners are doing the work of auditors.
And the work theyre doing is brute-force guessing at a number until it unlocks a prize!
In the case of this little supercomputer, it can run at a speed of 100 TRILLION GUESSES
PER SECOND.
Now I KNOW that we humans dont have a grip on just how big a trillion is.
Im going to try to use perspective..
Imagine all the people who have ever lived in the history of the planet.
Turns out that number is 117 billion people - for context there are only about 8 billion
people alive right now.
This machine can assign a number to every person who has ever existed in all time, and
it can do that one thousand times - every second.
If you got a job that paid you one thousand dollars per hour, 24 hours a day!
What a job..
It would take you 11 and a half MILLION YEARS to accrue 100 Trillion dollars.
This one box makes 100 trillion calculations per second.
The total number of guesses it takes to make the next block on the bitcoin network is currently
measured in the hundreds of quadrillions!
Just for the sake of conversation, the difference between a trillion and a quadrillion is just
about a quadrillion.
Because of all that calculation, this S19J Pro requires a whole lot of electricity, and
therefor produces a ton of heat.
This one, which is technically still the current generation of machines, albeit now 30 to 50%
slower than the newest model available, this little guy requires 3000 watts of power at
240 volts.
If you’ve got, oh lets say a 1200 square foot house with a central air conditioner
- this little box will pull ABOUT the same amount of electricity as that thing that cools
your entire house down, will do.
Except your AC will cycle on and off, this never shuts off.
At my house, thats about $260 of electricity, per machine, per month, to run.
These little fans on either side of the thing get spinning up to about 6000 RPMs and the
sound they make is pretty awful.
As a result of that, we enterprising at-home bitcoin miners try all sorts of things to
shut them up, and cool them off.
We will dunk them into this special fluid that can’t transmit an electrical arc - and
then pump that fluid out of the tank and through a radiator to cool it down and cycle it back
into the tank.
We sometimes shove them in these specially designed acoustic boxes, that allow proper
airflow but manage to dampen that terrible high pitch noise that comes out of those fans.
We modify the original design with larger, quieter, more powerful fans - in a way that
allows the miner to double as a furnace in the winter time while producing bitcoins at
the same time - double duty.
If youre looking to buy some of these things to heat your house for free this winter - Ive
got a link in the description for where to get them.
American company.
Very safe to buy through them.
Wait what was the original question?