Did Jack Dorsey just throw shade at #ETH?
July 23, 2021 by The Q.ai Team
The educational portion of this newsletter focuses on mining bitcoin
In under 4 minutes, you will learn:
- How Bitcoin mining works
- 5 headlines that pretty much sum up the week
- Why Jack Dorsey’s latest tweet about Ethereum is especially entertaining
- Our rec of the week
How to mine Bitcoin
- Bitcoin mining is the process of creating new Bitcoins while verifying and securing existing Bitcoin transactions
- Bitcoin mining works by using high-powered computers to “guess” a 64-digit hexadecimal number, known as a “hash,” that’s less than or equal to the network’s proposed target hash
- Bitcoin and Ethereum mining are most profitable using mining rigs, or high-powered computers specifically designed to mine coins; however, some coins can be mined at home relatively cheaply
What is Bitcoin mining?
Bitcoin mining is the process of creating new bitcoins for circulation. Mining helps maintain, develop and secure the ongoing blockchain ledger, thereby serving as a crucial component of this cryptocurrency’s continuity and legitimacy.
Another purpose of Bitcoin mining is to ensure that transactions are accurate and do not duplicate coins (Bitcoin’s digital version of counterfeiting).
Why mine Bitcoin?
Many mine Bitcoin for the sheer thrill that comes with designing their own mining rigs or being part of “the future of money.” Some mine coins to earn “voting” power when changes to the Bitcoin network protocol are proposed, such as when it comes time to fork in a new coin.
Others, particularly mining operations, mine Bitcoin to turn a profit and ensure that more Bitcoins enter circulation.
If you’re worried about jumping in too late, never fear! Because the rate of mined Bitcoin is reduced over time, the final Bitcoin won’t be minted until around the year 2140.
How to mine Bitcoin
Bitcoin mining is accomplished by using sophisticated computers to solve complex math problems, or cryptographic equations.
While mining crypto has been oft-touted as a way to generate passive income, it’s painstaking, energy-expensive and only occasionally rewarding if you do it alone. Unfortunately, gone are the days of profitably mining Bitcoin on your personal laptop.
One of the main reasons for this is the increasing difficulty of Bitcoin problems – an intentional quirk in the network’s algorithm, which evaluates and adjusts the difficulty of mining every 2,016 blocks – roughly every two weeks – to maintain a rate of one block produced every 10 minutes. This means that the more mining rigs that come online, the more difficult the mining process becomes.
Turning to mining pools
Another reason for Bitcoin mining’s increasingly expensive overhead is the advent of the Application Specific Integrated Circuit, or ASIC, hardware designed specifically to mine Bitcoin.
These mining rigs, as they’re known, are designed to reach Bitcoin’s target hash as quickly as possible, all the while verifying transactions in the background. But the speed of ASICs comes at a hefty price, sometimes to the tune of thousands of dollars per rig.
For that reason, many Bitcoin miners often turn to mining pools. These groups are comprised of individual miners who put their computational heads together to increase their success. While this vastly improves your chances of guessing the right hash, you’ll have to split any proceeds among other members of the group.
The bottom line
The longer you mine Bitcoin, the less money you stand to make (assuming a constant USD-to-Bitcoin price). Additionally, assuming you want to mine other types of crypto instead, just know that the mining process varies from coin to coin, and you’ll need to buy a mining rig for that specific cryptocurrency. If this all sounds cool to you, keep in mind that cryptocurrency mining is an energy- and heat-intensive process. As such, you should expect your energy bill to go up (and you should invest in a fan or three to keep your devices cool).
Read the full Investing 101 article to learn about Bitcoin mining
Five headlines that sum up the week
1. Netflix subscriber growth slows as people return to living their lives
Netflix, still king of streaming (for now), has added a healthy 1.5 million subscribers to its platform last quarter. That makes its total subscriber count 209 million. A feat no less, it credits Q2 growth to its international expansion and that the company actually lost 400,000 subscribers in the U.S. Revenue still grew, reporting $7.3 billion last quarter in comparison to $7.16 during Q1. At this time, the company is forecasting 3.5 million additional subscribers for Q3.
2. Robinhood IPO puts its own customers at risk for volatility
Source: The Deep Dive
Robinhood is the most highly anticipated IPO this year and the valuation that it seeks certainly shows. It plans to sell a third of its shares to its own customers, something that is not typically offered to the typical retail investor. While cool, it poses huge risks and analysts warn of the volatility that this may lead to with the new listing. It’s rather common for a stock to lose value shortly after going public, which means that the customers of Robinhood could be directly impacted by its IPO.
3. Nasdaq is getting involved in the pre-IPO market with new spin-off
Source: Financial Times
Nasdaq will start trading pre-IPO shares in a spin-off venture called Nasdaq Private Markets. Investing in pre-IPO companies have recently grown in popularity, prompting several banks to partner with Nasdaq, including Citigroup, Goldman Sachs, Morgan Stanley and SVB Financial. The largest shareholder will be Nasdaq. If you’re a retail investor, we’re sorry to say you’re not going to be able to participate in this type of investment, as it is only available for accredited individual investors.
4. Zoom acquires Five9 for $14.7 billion
“Zoom,” the word that has become so ubiquitous, it is now part of our everyday vernacular the same way “Kleenex” and “Chapstick” replaces “facial tissue” and “lip balm.” While the stock has since retreated from from its post-pandemic highs, it is still triple its value from before March 2020. Its $14.7 billion acquisition of Five9, a customer service software developer, can very well cement its dominance in the space, as well as a new one, as this acquisition gives it direct access to a $24 billion contact center market.
5. American Express earnings exceeded expectations by nearly a billion dollars
The five-quarter dry spell is over! A nod to increased consumer spending, American Express reports that its revenue has jumped in Q2 by 33% to $10.2 billion. A year before, revenue was $7.7 billion. According to Stephen Squeri, Amex’s CEO, the company “saw card member spending accelerate from the prior quarter…with the largest portion of this spending growth coming from Millennial, Gen Z.”
ICYMI: Jack Dorsey inadvertently throws shade at Ethereum in a really clever way
Jack Dorsey has something to say about Ethereum, sharing a single Tweet labeled #ETH. This is normally viewed as standard Twitter behavior for the founder and CEO; however, with the Olympics underway, “ETH” currently represents something completely different: the country Ethiopia.
As a result, ETH rendered the Ethiopian flag due to “hashflags,” a temporary feature that allows users to share their support for countries competing in the Olympics. Considering Dorsey is all-in on Bitcoin, even stating that Bitcoin will become the Internet’s currency, many were led to believe that he was trolling Ethereum.
Twitter influencers joined in on the fun, including an account that photoshopped a Tweet impersonating one of the founders of Ethereum.
What is most interesting is that this isn’t the first time Dorsey has used the Ethiopian flag when tweeting about cryptos. According to this Coin Telegraph article, he tweeted the Ethiopian flag in June with the hashtag #bitcoin. Granted, it was in response to a tweet about Bitcoin mining in Ethiopia so it’s probably purely coincidental.
Regardless, the Internet is just giving fun with it.
Is this the end of hard seltzer? The Motley Fool has the full transcript of an earnings call with the company that owns Truly
Your heard it from the guys at The Boston Beer Company first – the craze for hard seltzer is fading, and they’ve got the data to back up this tragic revelation. One Goldman Sachs even used a pun, saying he is “truly struggling” with “how meaningfully results have deteriorated.”