In poker, a common train of thought is that being the aggressor is better than being the caller. Why, since there is always the possibility that your opponent folds.
Publicly traded block reward miners seem to have noted this high-risk strategy and are adopting this tactic in their approach to earning revenue from the BTC network. Lately, there have been several headlines where publicly listed block reward miners—HIVE Blockchain, DMG, Argo, and Riot Blockchain—went all-in on the BTC network by expanding their fleet of ASIC hardware miners.
The all-in bet on BTC isn’t the show of confidence one might initially assume. It is really a ‘Hail Mary’ on their bet in case the market does not respond with the magical price increase they’re projecting. Their leaders realize they need a Plan B to offset the reduction in token awards, so they are using the “Last Man Standing” strategy as insurance in case their earnings decline which we expect.
Last Man Standing strategy
The “Last Man Standing” strategy is credible and seen in other industries so not uncommon.
At first glance, this strategy makes sense to those that are not familiar with blockchain technology and principles. There is a broad consensus that the block reward mining sector is on the verge of shrinking as participants exit the sector now that the halving has erased their profit margin. Online you’ll find several articles predicting the miner capitulation or “mining death spiral.”
Many of these firms have publicly stated that their game plan includes surviving long enough to reap a higher share of the block subsidy reward once others leave. They are structuring themselves to be in position for this perceived windfall. If the price “moons,” that’s even better.
The other side of going all-in on BTC is these companies have a much shorter time frame to find their prospective success.
Public companies reporting quarterly results realize they will not have to face the full fire…