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Minto Is More Efficient Than Public American Mining Companies

October 5, 2022
min. read

A lot of American mining companies are traded on exchanges, and we can compare them by efficiency and results. More than 40 such companies are represented on the Hashrateindex service. There are very small ones among them, as well real giants of the mining industry like HUT 8, Marathon or Core Scientific. The business of mining companies is different. For example, some have their own mining facilities, others provide hosting services, the most successful companies have a diversified business where mining only constitutes a certain part of the process.

The table below shows some parameters of public mining companies, such as market cap, total hashrate, capitalization-to-hashrate ratio as an indicator of efficiency. The Minto project is not a joint-stock company, is not planning an IPO and does not offer its securities on a particular exchange. However, the WEB3 revolution allows us to move away from the classic corporatization of a centralized company by creating a decentralized community (Governance) that influences management decision-making through the project token ownership.

By the way, this approach allows the company to pass the well-known Howie test used by the SEC to determine whether a particular token is a security (read the next article about the Howie test). You may recall that one of the indicators of a security in the Howie test is the holder's expectation of profit from the efforts of others. If there is a community, the holder is not separate from the company and directly participates in its operation, which means that such tokens pass the Howie test and are not securities.

So, the Minto project has a market capitalization of about $3M, claims 55,000 TH/s of working Bitcoin mining capacity and demonstrates enviable efficiency compared to non-diversified mining companies, even with a much larger capitalization. Large companies, such as Marathon, are trapped in their own growth - in order to achieve the required indicators, they are forced to endlessly increase mining capacity, using almost all working capital and credit funds to purchase more miners. Here there is a paradox of growth - companies do not have time to expand the area and build hardware racks at the appropriate pace. For this reason, in large companies, a significant part of miners is always idle, while the funds spent on them are already reflected in the capitalization.

In addition, let’s not forget about mining profitability. The equipment of large companies is very different, and mining farms are scattered in different locations and powered by electricity at very different prices. Therefore, in unfavorable times, some of the unprofitable low-efficiency mining hardware has to be turned off. Thus, another blow is dealt to business efficiency, because the market cap grows, and the mining capacity drops.

The Hashrateindex service offers the term “hashprice”, which refers to how much you can earn per day from one terahash of mining power. Obviously, the higher the Bitcoin exchange rate and the lower the network difficulty, the more daily revenue can be expected. However, over the past months, everything has been going in exactly the opposite direction, and we have witnessed a continuous reduction of profitability:

In this respect, the graph that captures the Bitcoin price peak in 2017, which is explained by the low network difficulty, is even more eloquent.

However, miner prices are also subject to fluctuations and depend on the “hashprice". On the ASIC S19 price chart, it is easy to see Bitcoin’s familiar double top:

At least crypto winter allows you to get hardware at a lower price, but this does not mean that the miners you get immediately become operational and start earning.

Minto cannot compete with the mining giants in terms of market cap, but it easily takes over in terms of mining efficiency. Access to inexpensive electricity and full utilization of mining hardware ensure high profitability, and the exchange price of BTCMT project tokens (where 100 BTCMT is equivalent to 1 TH/s) is much more objectively set by the market than any similar security traded on stock exchanges.

Interestingly, among public companies, only a well-diversified business can provide efficiency comparable to Minto (e.g. Core Scientific and SOS Limited), which is quite fair: under current mining market conditions large company size is more of a negative than a positive sign. In this sense, Minto is in a state of balance and is ready to use any window of opportunity to increase capitalization by connecting an additional hashrate.

The tokens of the Minto mining company today look much more attractive than mining companies’ shares, since the distance between the token and the income of its holders is much less than the distance between the shares and the dividends paid on them (if any).

The Minto project is registered in Dubai, UAE, and is continuously developing in accordance with the roadmap. American industry benchmarks will always remain benchmarks for the classic market, but Minto and its concept have already opened the doors to a new understanding of digital finance based on blockchain technology, Bitcoin mining and the decentralized finance (DeFi) phenomenon.

Join Minto and earn income on Bitcoin mining as if the classic market has gone crazy and started paying dividends every day!

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