Top Crypto-Mining Executive Explains Why "We're Hoarding The Coins"

Authored by Mac Slavo via SHTFplan.com,

If the price action in crypto currencies over the last several months has proven anything, it’s that the blockchain has gone fully mainstream with global investors, major financial institutions and governments showing significant interest in the space. While a number of blockchain projects are moving onto the stage, the primary focus for investors has been Bitcoin, which has seen an increase of over 1,600% in 2017. And according to Frank Holmes, there is much more to come.

In an interview with SGT Report, Holmes, the Chairman of Hive Blockchain Technologies, the world’s only publicly traded blockchain mining company explains that, while roughly 78% of the available 21 million Bitcoins, or about 16.4 million, have been mined up to this point, there are probably only about 10 million coins in actual circulation around the world because somewhere on the order of 25% have been lost forever due to misplaced wallet access keys and other issues. Moreover, of those 10 million or so available coins, it has been widely reported that about 1000 “whales,” or high net worth investors, own some 40% of the coins, creating a scarcity in the market that has left millions of global investors chasing a limited supply of BTC.

Holmes suggests that this limited availability works to the advantage of cryptocurrency miners who use expensive computer hardware mining rigs to process transactions on the blockchain, because with so much investment capital moving into the space they can hoard the coins they mine and sell into the market during price spikes while loading up on more coins when markets dip. Hive currently mines Ethereum, Ethereum Classic, Bitcoin and will soon move into Litecoin and other popular cryptocurrencies using the same strategy:

We’re hoarding the coins… we mine virgin coins and in fact we are getting offered premiums for our coins because they’ve never been tainted.

 

We never buy the coins… anytime it has a huge surge we will sell one, two or three percent… and as soon as it corrects we just mine more and replenish ourselves…

 

We want to wait until we get at least 20,000 coins and then we can turn around and use our quant models, so we’re doing things very unique…

Most crypto currencies have a maximum supply of coins that can ever be mined. As Bitcoin demonstrates, a percentage of those already-mined coins will be lost. Another percentage will be locked up by high net worth and long-term investors. These mechanics create a situation where, perhaps only a little over half of the actual listed circulation of coins is actually circulating.

With this being the case it’s not difficult to see why, as tens of billions of dollars, and perhaps even trillions as has been suggested by investment gurus, continue to pile into these assets, prices for top tier crypto currencies could continue to rise exponentially in coming months and years.

Comments

peterk Arnold Mon, 12/11/2017 - 20:07 Permalink

I have 2 smelly socks .... both are unique in the world and can never be duplicated.There can never be more of these   2 smelly unique socks ,  they are limited in supply.They cant be used for anything, that is to buy anything. I think this fullfills all of  bitcoins characterisitcs...... these socks must be worth a fortune it seems. Bitcoin  is  just a tulip pyramid bubble scheme .... I pay you bitcoins to procces the transaction (mine)  that serves no purpose other than  the mining itself. This is  a pyramid scheme .It worlks well in a sphere of unsophisticated investors, millenials. You have a few  big players  spruiking an illiquid market.. making headlines... now the public is moving in... recepie for a short imo.Yes i will short it.

In reply to by Arnold

Laowei Gweilo Bumpo Mon, 12/11/2017 - 23:27 Permalink

>>> "Top Crypto-Mining Executive Explains Why "We're Hoarding The Coins" <<<He did? All he said that was the advantage of a Miner Stock (over an ETF) is that ETFs are having trouble because they could be connected to money laundering, which is not really true.... And really I don't think anyone gives two-shits if ANYONE's coins are "virgin" or not.It was a good listen but the headline confuses me because it was such an irrelevant part of the conversation o.0

In reply to by Bumpo

flapdoodle Monkeymitts Tue, 12/12/2017 - 08:18 Permalink

At least diamonds are shiny and attract hot women......but that doesn't change the fact that the diamond miners and Amsterdam/TelAviv diamond merchants have safes FULL of top quality diamonds which they dare not let out on the market at once lest the entire price structure collapse. An aside: if you have a nice diamond you just bought, just as an exercise try to sell it for the same/better price. Good luck.

In reply to by Monkeymitts

Son of Captain Nemo peterk Mon, 12/11/2017 - 22:18 Permalink

"I have 2 smelly socks .... both are unique in the world and can never be duplicated."

pet

Someone else brought that up earlier today on WB7s paper BTC Christmas ornament artwork... He basically stated that BTC coins should be collectable like with coins to a numismatics collector -scratches could be assessed luster of the "Buttcoin" etc. ... I told him that it was a great idea given the fantasy world of digital currency, but that he better hurry before Max Keiser of RT News trolls ZH and builds a campaign to make BTC coins numismatic collectible so that he can make "more" fake money then he already has!!!

Maybe we can renovate out of business Federated stores like Macy's or Sears' or Walmarts that can be converted into BTC coin stores and herd them into their "temples" to be downsized by deranged police officers like this one (https://southfront.org/graphic-video-unarmed-man-pleading-for-his-life-…)?...

With all of this irrational delusional greedy fucked up behavior we are witnessing unravel every fucking day for the last 5 months...

At some point it does you good just to wear a shit eating grin and "watch it all come apart" at high speed!...

As this will get worse with each passing day!

In reply to by peterk

Giant Meteor Herp and Derp Mon, 12/11/2017 - 23:50 Permalink

Be careful .."At the peak of the mania, the price of tulip bulbs went up twenty-fold in just one month.To put that into perspective, a person who had invested $1,000 in tulip bulbs would have seen their investment balloon to $20,000. With gains such as these, it is not hard to understand the mad rush to buy tulip bulbs at any cost. Tulip bulb mania affected the public psyche to an extreme. One drunk man in a bar started peeling and eating what he thought was an onion, while it was actually the bar owner’s tulip bulb on display. The infuriated bar owner had this man jailed for many months."http://www.thebubblebubble.com/tulipmania/

In reply to by Herp and Derp

rbianco3 Automatic Choke Mon, 12/11/2017 - 19:48 Permalink

Same question- the reason I clicked on this "click bait" article or ZH is being paid to scare coins from people. You will be seeing many scare tactics in the coming days to get those coins from your hands and into the hands of those that thought Bitcoin was going to collapse and now they cannot control you.Not possible to taint a coin because any one bit flipped means it's not a coin anymore, just like the old days of batch Cobol and Control Files!The only sketchy thing being done is high tech firms (and tax backed Universities) creating special chips made for mining that give them a competitive advantage in mining. 

In reply to by Automatic Choke

Automatic Choke jmack Mon, 12/11/2017 - 20:36 Permalink

Yes, this keeps coming up, and I remain massively confused (not \sarc, for real).Everybody keeps talking about the anonymousity of bitcoin transactions, but it seems to me that the blockchain ledger provides exactly the opposite.  The more bombproof (i.e. unhackable) the ledger is, the more foolproof is the evidence trail of coin changing hands.   Your only hope of being anonymous is the secrecy of the link between you and your wallet....but if you ever transact for fiat (buying or selling) and deal in other than cash (i.e. pay by check, bank wire, credit card), then you have provided somebody else a link between you and your wallet.    Alternately, if any of the exchanges where you transact are hacked or answer to a govt summons, the same link is provided.I understand, as you say, that a newly mined coin with no ledger entries is preferable for criminal activity, but isn't there a ledger entry noting the creation of the coin and its assignment to your wallet?   And if you do partake in criminal activity, and ever want to convert the proceeds to fiat, you have the same issue (unless you transact for cash).   Seems to me that for anonymous transactions, cryptos still are a far distant second to a suitcase full of green folding stuff.

In reply to by jmack

jmack Automatic Choke Mon, 12/11/2017 - 22:10 Permalink

    If you are buying from the miner, presumably, you know they are not LEO.  Also,  bitcoin is anonymous to a degree you can make a wallet that is not linked to your real world identity, but that does not do any good if an entity is can track that back thru all the transactions until it transacts into a known account.       But that is simple to bypass, depending on how much volume you are talking about.  you can sell bitcoin for cash, you can buy amazon gift cards for bitcoin, you can go to a mixer like shapeshifter.io or changelly to switch between btc an another altcoin that has better anonymity features.    you can get anonymity from bitcoin, but you will pay a premium in cost and time.  And too, people are willing to be the cutout in the ledger chain, through peer to peer selling, to gain that premium.

In reply to by Automatic Choke

threeputting Automatic Choke Tue, 12/12/2017 - 03:35 Permalink

No need to feel confused. You're 100% correct.In the beginning, no one was really watching the network, and it was easy to transact anonymously. But in recent years, blockchain analysis has made great advancements, and firms have popped up to provide this service to government agencies (IRS, DEA, FBI, etc. have all been purchasing contracts from firms like Chainalysis for the past few years...this is how they busted the guy with the Gox coins in Greece, and took down the darknet markets and numerous darknet vendors.)Not only is bitcoin not anonymous, it's essentially the least anonymous currency in the history of mankind. But it wasn't like this initally, and the people weren't trying to deceive you in the beginning when they talked about anonymity.For these reasons alone I believe bitcoin will ultimately fail as a store of value, because people desire privacy, anonymity, and fungibility. And we already know it doesn't scale so can't be used to transact globally. So what's left?

In reply to by Automatic Choke

The_merovingian Automatic Choke Tue, 12/12/2017 - 04:16 Permalink

Think of Bitcoin as a Swiss numbered bank account. It does not have your name on it, just a number. As the bank account holder, you are the only one with a “key” or password (with Bitcoin it’s called a private key) to access that bank account. Authorities can track transfers to and from that account but they cannot link it to somebody unless the Swiss authority changes the law, which they did after the GFC or they physically see you accessing that account.  For Bitcoin, the only way for authorities to link a wallet to a physical person is to monitor any access to that wallet by looking up the transaction on the open ledger. If you used an exchange instead of a P2P market, they can track your transactions back to the exchange and simply ask them for your information.There are ways to remain anonymous and/or stay under the radar.First, try to avoid exchanges and only use P2P markets (ie: Bisq.io, bitcoin.de etc…), especially when you want to cash out.Second, always use a VPN for any transaction.Third, have at least 2 wallets (they are free) and only transfer any BTC to your secure wallet after you’ve either tumbled your coin or had them converted into fully anonymous cryptos (Monero, Bcash) and back.  If you follow those steps, it is impossible for any authority to find you or even know how much BTC you own. Also remember, the FBI was able to shut down Silk road & al, because they were sloppy and gave personal information away, not because they were able to track their BTC holdings.

In reply to by Automatic Choke

PN7 spastic_colon Tue, 12/12/2017 - 01:19 Permalink

You are correct.  If you go to a crypto exchange like Kraken, the values of Litecoin, Ethereum Monero and many other coins are priced in bitcoin.Dollar pricing is mostly to help the "unsophisticated-in-crypto" potential investors form an idea of the value of bitcoin etc, by comparison to a value system with which they are already familiar. 

In reply to by spastic_colon

DC Beastie Boy Mon, 12/11/2017 - 19:16 Permalink

Trillions and Quadrillions more in Alts

I’m really starting to agree with the tulip bulb analogy.

The BTC backers are saying there’s only 21M, not really it’s been forked a few times. Also, there’s 1000s of Alts.

It’s like investing in Ford when they launched and realizing there’s several other manufacturers. In this case, there’s thousands of other crypto manufacturers.

You really think smart money is piling into BTC? Why not BCH and ETH and LTC and IOTA futures?

Holy shit, there’s more than one of these?

Yeah it’s like that and will be. And they’re all setting up USD and other govt currency pairs daily.

Kafir Goyim DC Beastie Boy Mon, 12/11/2017 - 19:50 Permalink

BTC is the reserve currency, just like USD is.  If you want some IOTA (God help you), you first need to buy BTC, and then you can buy IOTA.  Sure, some exchanges offer direct fiat to alt transactions, but it's the exception, not the rule.So, for the forseeable future you must travel through BTC to get to an alt coin.  That soaks up a certain amount of BTC, just like oil transactions soak up USD.  People tend to have some in their account, soaking up some of the liquidity.I agree that BTC won't be the crypto reserve currency in 2030, probably.  Some other crypto (not ETH) will rise to prominence.  I also suspect that USD won't be the world reserve currency in 2030.  Still, for now, it's BTC and USD.  Finally, your analogy with Ford is a good one, but you got a bit lost toward the end.  Cryptos are like stocks.  Do you get scared of owning AAPL because there are other companies on the NASDAQ?  Or do you recognize that AAPL still worth owning, even though other companies exist in the world?  Not all cryptos solve the same problem.  They are as different as AAPL and GE.  So having multiple cryptos in the world should not frighten you anymore than having multiple public companies in the world.

In reply to by DC Beastie Boy

DC Beastie Boy Kafir Goyim Mon, 12/11/2017 - 20:51 Permalink

Thanks for the well thought out reply, most members just say fuck you or some other insult.

Actually the biggest pair for IOTA is USD

https://coinmarketcap.com/currencies/iota/#markets

And the two biggest pairs for LTC are in USD

https://coinmarketcap.com/currencies/litecoin/#markets

BTC will be turned off like a light switch this market is way too diversified.

These exchanges don’t give a shit about BTC, they only care about volume. And BTC has been a way to get it. The miners don’t really give a shit either, they’ll all start mining BCH or any other Alt faster than you can yell “Sell Mortimer Sell!”

https://m.youtube.com/watch?v=obAoPP1bdIM

In reply to by Kafir Goyim

nope-1004 Mon, 12/11/2017 - 19:04 Permalink

Speculators hoard, not people that are using it daily as a new alternative to the USD.  This kinda proves that it's truly not a new monetary system, but a speculative investment.  So..... what happens when everyone goes for the exits?