August 2022
Locations
New locations in Waterville, Bangor, and Houlton coming soon. We finally have manuafturing underway to continue our expansion! If you know of a store that would like a bitcoin kiosk please let us know.
Announcements
In August we had the highest volume of customers purchasing BTC so far this year.
All About Energy
From: Magic Internet Money
By Jesse Berger
Bitcoin on Point: Market Rate
“The most important single central fact about a free market is that no exchange takes place unless both parties benefit.” -Milton Friedman, Economist & Political Philosopher
There are no interest rates to influence the cost of Bitcoin, which is neither free nor fixed. There are land, labor, and capital requirements needed to mine it and maintain the security of the network. Bitcoin miners, though, do not determine these costs for themselves like central banks and governments do with interest rates. Instead, the cost of Bitcoin is determined by a single, variable factor – demand.
How does this work? The computational difficulty of mining, which impacts the amount of energy that must be expended, directly affects costs. This difficulty is programmed to self-adjust every 2 weeks depending on the amount of mining resources joining or leaving the network. When there is more computing power directed towards mining, the difficulty and energy requirements are higher; when there is less power, energy and difficulty requirements are lower.
This means that Bitcoin is harder and expensive to mine when demand is high, but easier and cheaper to mine when demand is low. This mechanism for clearly identifying and adjusting the intersection of demand against its fixed supply results in the timely depiction of its production costs on the open market. In other words, Bitcoin is its own free market for determining its value as money.
It's hard to overstate the importance of energy and power generation. We take it for granted, living as most of us have, in a period of unprecedented energy abundance. Giant power plants ingest fuel and give off the electricity that powers industrial manufacturing, which in turn gives humans exponential leverage on their productive endeavors. Supply chains spanning multiple industries churn out several varieties of commodity-based fuel that can fly planes, drive trucks, run farm equipment, and maintain a cozy household temperature throughout the Maine winter. You've never heard anyone complain about their heating fuel bill being too low. But when you think of how much more you'd pay for that energy if you had to, it doesn't seem like such a bad deal compared to most of the other items we spend money on.
It's also hard not to read the tea leaves in this moment and conclude that energy is becoming more dear, and it might be poised to move rather quickly and sharply higher in price than would have been conceivable for most of our lives. Already in the European Union, economic warfare has ensnared energy commodities and is driving electricity prices sky high. Even absent the effects of economic warfare, a secular trend is forming in which energy becomes more dear. The moniker "ESG" might be younger than the ketchup in my fridge, but in its short existence it has achieved a level of corporate and government sponsorship unlike anything I can remember. If it can be taken as a sign of things to come - this rise to prominence by a movement whose core pillars include a mandate to curtail energy consumption - then energy will become more dear because the sponsors of the movement will see to it.
To this, the environmentalist will say "good" while the techno-optimist will remind the doomsayer that humans have a way of creating "zero to one" innovations, and someone somewhere someday will discover a source of energy that "we just, like, can't understand today because it doesn't exist yet, man." And to them, the bitcoiner will say, "bitcoin fixes this" because bitcoin creates an unprecedented opportunity in real economic terms to innovate in the direction of more efficient energy production, conversion, conservation, and consumption. The techno-optimist is more likely to be correct in his prediction because the economic incentive of bitcoin transaction time-stamping - commonly referred to as "mining" - exists.
It is against this backdrop that a major alternative cryptocurrency, ether, is divorcing itself from energy just as the bitcoin network is becoming a core component of the energy and electricity infrastructure in some parts of the world. Note a recent article by Coindesk which calls attention to the slowing of permit issuance for bitcoin mining projects by the Texas state grid operator. Using numbers from the article, the Texas grid demands a peak load of 80 gigawatts. It is expected that bitcoin mining projects will add 5 gigawatts of power generation to this grid before the end of next year... and that will leave somewhere between 10 and 20 gigawatts of projects awaiting permit. What is unique about this power production - and what the grid operators in the state seem to appreciate - is that it can be scaled down in more or less real time as there is stress on the non-bitcoin portion of the grid. Although a more thoughtful approach to mining expansion in the state is being taken, these mining operations are getting baked into state utility planning.
The competitive dynamics of bitcoin mining provide powerful economic incentives that drive towards cheaper, more available, more reliable, and more efficient power generation. And with all of the observable trends pointing towards a violent move higher in the cost of energy absent a paradigm shift, the moment is right for this kind of incentive.