1/ Instead of discussing a BTC mining death spiral, perhaps we should be talking about EOS Block Producers turning off their operations. Although the narrative is that EOS BPs are financially well-off, many are currently underwater...
2/ In this survey filled out by block producers, the break-even cost for them was ~$4 per EOS. EOS is currently trading at $1.80. medium.com/@altShiftDev/s…
3/ Given there is no difficulty adjustment mechanism in EOS, BPs are going to be forced to either downsize their operations/cut costs or, in some cases, completely shut down.
4/ It seems that we are actually starting to see the latter play out here. Of the top 81 BPs (who are the only ones who receive rewards) ~10% are currently turned off.
More specifically, there are quite literally getting free rewards for doing nothing.
More specifically, there are quite literally getting free rewards for doing nothing.
5/ In an efficient market, people would stop voting for these BPs, but that doesn't seem to be the case here.
I don't blame the BPs, though. Why operate at a loss?
I don't blame the BPs, though. Why operate at a loss?
6/ Unless EOS price rebounds substantially, I think we are going to see more BPs shut down. The other option is to increase BP rewards (could adjust dynamically based off of EOS price).
