The Most Bullish Case for Bitcoin Mining You've Ever Heard

First, let's start with where the mining industry is today. Currently the Bitcoin network pays out $10.7 billion in Bitcoin per year. This is the Total Addressable Market(TAM) for the mining industry.

29.5M * 365 = $10,767,500,000

This is relatively small in comparison to many other industries. But Bitcoin is still a very new technology and the mining industry won't be this small forever.

Fast forward 20 years and it's 2043. Bitcoin has become the global reserve asset/currency of the world. The price in USD or you can think of the buying power is $10,000,000 per coin. The world has seen exponential technological and economical growth off the back of the Bitcoin revolution. 

I think 20 years is a reasonable time. Let's use the internet as an example. In 2000-2001 the dot com bubble was bursting. The hype had all been on the back of a technological breakthrough called the internet. There were A LOT of bullshit companies without real business models failing. This feels very similar to all the other crypto tokens today.

As the bubble burst it didn't change the breakthrough that was the internet and out of the ashes the most valuable companies in the world rose up. You know them as FAANG(Facebook, Amazon, Apple, Netflix, Google). The internet went on to become the global dominate communications and information network of the world.

Notice that you don't send any information or communication by snail mail that takes 3-5 business days anymore, because you can send it instantly for virtually no cost. Sound familiar? 

Every single company in the world had to become an "internet business" or risk being disrupted by a company that was. The companies that didn't... well they are no longer with us. I think the adoption speed of Bitcoin will look similar. 

Revenue From Transactions

The transaction number is important because fees will make up a serious amount of revenue for miners. Block space will be incredibly scarce and like the traditional financial system today. Your average person will unlikely use the base layer very much or even at all. 

Right now, if we look at the Fedwire statistics there are on average 784,209 wire payments per day or 196,052,238 per year. This would cover the transaction limits of the base layer of Bitcoin. Not to mention everyone in the world could use the base layer if they wanted to unlike the Fedwire payments system today.

I don't think it would be unreasonable at all for the average transaction fee to be $100 USD. Before you say how ridiculous that sounds international wire payments are around $45 today and again take 3-5 business days.

As governments battle each other with currency wars and sanctions, look no further than what the USA did to Russia by seizing $300B held at the New York Federal Reserve. I'll bet that Russia and every other country and corporation in the world would gladly pay the high fees to insure their reserves could never be seized. 

There are 31,536,000 seconds in a year. With a 7 TPS limit that means the base layer could do 220,752,000 transactions per year. 220,752,000 * $100 = $22,075,200,000 in miner revenue from fees.

Revenue From The Block Reward

Now fast forward to the year 2043. 

Price: $10,000,000

Block Reward: 0.1953125(rounding to .19 for easy numbers)

So $1.9 million of Bitcoin would be released into circulation every 10 minutes. That comes out to $273,600,000 per day or $99,864,000,000 per year. Add up the block reward and transaction fees and the TAM of miners comes out to $121,939,200,000.

What Does The Future Look Like For Miners?

The future looks great! A growing industry is good for all participants. There will be insane demand for ASIC manufacturers, hosting providers, master electricians, repair facilities, everything that goes into the mining industry. All of it will experience tremendous growth. 

If you are fortunate enough to be reading this and can find a way to be a valuable part of this growing industry your future looks extremely bright. If you haven't found your way yet, don't give up. Learn a skill that is in high demand and you will be rewarded handsomely as this industry continues to grow. 

I'll leave you with a final thought. We are not fighting over the same pieces of the pie. The pie is about to 10x in size and there is going to be more pieces than any of us could eat on our own. Encourage more intelligent people to come work in this industry. We are going to need as many smart and capable people as we can get to make this vision for the future a reality. 


Wilson Mining


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