🏎 $575 mining contracts hidden in cars

Gm, this is the doodhwala, the only crypto newsletter that’s as action-packed as an episode of Roadies.

Seriously this one is 🔥

Here’s what we got for you today:

• Miners are selling QUICK 😭

• Not another algo stablecoin 🤦‍♂️

• The oldest Mining Scam caught 🫡

• Nach and Numbers 🔢

• Meme of the day 📉

Let’s get into it.

Miners are selling QUICK

Everyone’s having a rough time rn.

• FTX users and investors

• Sam Bankman Fried with his reputation

• Argentina football fans (mainly Bengalis and Malayalis)

Another group that’s facing the recession blues is Bitcoin Miners.

Bitcoin miners are facing real selling pressure in this bear market.

What’s happening?

So here’s how Bitcoin mining works:

➗ To mine a new block, miners have to solve a complex mathematical problem (so Alia Bhatt can forget about it)

🔥 To solve this problem, miners need a lot of processing power through GPUs and other hardware equipment

💨 And miners need to solve this problem fast because the fastest to solve wins the 💰

🖥 To solve it first, they need A LOT more processing power (more hardware)

⚡️ This hardware equipment needs A TON of power to run (i.e electricity bills the size of the constitution)

💰 But the reward for solving this problem is…papadi chat…Bitcoin 🔥

And given the price of Bitcoin so far, the rewards > the cost.

So, errbody is happy….right?!

Nope.

In the past year, the price of Bitcoin has been down-only. And the FTX collapse made it worse. Like when you had a bad day at the office, and you gotta then go through traffic! 😭

Miners are now aggressively selling.

Miners are facing problems on multiple fronts:

1️⃣ Mining Difficulty

Mining Difficulty is at an all-time high.

This means it is SUPER HARD to solve the problem quickly.

Miners need more power to do it, which increases their electricity costs. 💰

2️⃣ Energy Crisis

Energy costs are soaring rn. (been to a petrol pump lately? 😭)

Miners have to pay a lot more for electricity to be the first ones to solve the problem.

3️⃣ Bitcoin Price

With the overall cost to mine increasing, the price of the reward is decreasing.

Bitcoin price is dropping hard.

And miners have no option but to sell their rewards + their reserves, in order to keep up with the costs.

This has affected Bitcoin mining companies the most, forcing a few of them to almost shut shop.

Check out the list of publicly listed mining companies and their shares’ closing price 💀

There’s more red here than in the Red Wedding episode of Game Of Thrones. 🙃

And this might be the case for quite some time.

We just have to pray that it doesn't get worse and Bitcoin doesn't fall further.

Fingers crossed. 🤞

Not another algo stablecoin 🤦‍♂️

Algo stablecoins are like the toothbrush mustache. This one 👇

No one can ever have one without being canceled.

But one blockchain is bringing back algo stablecoins.

It’s a blockchain you think about as often as you think about changing your bedsheets, which is not often enough.

Yup, Cardano is set to launch an algo stablecoin. 🤡

They must be KWONfused, they shouldn’t DO this all over again.

Cardano is teaming up with COTI (not Corgi the 🐶 with the cute 🍑) to launch an over-collateralized algo stablecoin called DEJD (not Deji, KSI’s Youtuber brother).

Here are a few deets about it:

• over-collateralized stablecoin: Backed by reserves of ADA (Cardano’s native currency) and SHEN (native coin of DEJD)

• pegged to the dollar: each DEJD will be pegged to $1 at least that's the hope

• partnering with DEXes: DEJD will be paid out as rewards to users who provide liquidity on decentralized exchange

And it’s very similar to LUNA aka what our nightmares are made of. 🌖

The difference is Terra had an incentive for users to keep buying its algo stablecoin - UST.

This reason was earning high yields on Anchor Protocol.

DEJD is kinda doing this by giving out rewards for providing liquidity.

It's outsourcing the incentives to decentralized exchanges.

After — Luna — UST — Poverty — Terra — do you trust ALGO stablecoins? Let us know by replying to this email. 👀

The oldest Mining Scam caught

Estonia.

It’s a country you think of so little, you didn’t even realize this isn’t where Estonia is.

This is where Estonia is.

Estonia is also home to one of the OLDEST crypto scams ever.

And it’s worth half a big billion dollars. 👀

Get strapped in, we’re in for a ride.

Meet Sergei and Ivan (the most Estonian-sounding names you’ve ever heard of!)

In 2015, they set up a company called HashFlare.

Remember, this was pre-ICOs, pre-Ethereum too. So calling yourself anything crypto got you a lot of money.

👰‍♀️ Crypto bridal wear👨‍🍳 Crypto culinary arts school🗑 Crypto garbage disposal

HashFlare was a 🛠 Crypto Mining Service, and their scam process was simple:

1️⃣ Get people excited about mining2️⃣ Get investors to pay for mining rigs3️⃣ Sell mining contracts to users4️⃣ Mine Bitcoin, ETH, DASH, and ZEC5️⃣ Sell the crypto for dividends through a bank6️⃣ Pay dividends to users

Guess which step they stopped after?

You guessed it - step 3.

I don’t know what’s worse here, defrauding customers, or defrauding customers by mining Zcash.

I mean, look at the ZEC price since 2017 

After raising $25 million from investors and selling mining contracts worth $575 million, they vanished.

Just like Parag Agarwal after getting fired from Twitter, seriously can someone please check on Parag.

Back to the scamstars.

They ended up hiding their money in:

• 75 properties

• 6 luxury cars

• bunch of bank accounts

• bunch of crypto exchanges (let’s hope it wasn’t on FTX)

Poor Sergei and Ivan:

Mining companies are getting wrecked real quick, it doesn’t matter if they’re mining Bitcoin or not lol.

But watch out for those scams.

We’re talking about how to stay away from crypto scams.

So, if you’re down at 9 PM IST, hop on to the doodhwala daily’s daily Twitter Spaces.

Nach and Numbers

$1.2 billion — the amount of cash held by FTX on its balance sheet according to bankruptcy documents 🫡

381 days — since Bitcoin hits its all-time high of $69,000 back in November 2021. That’s the last time I could afford electricity 😭

19 — the number of properties purchased by Sam-Bankman Fried’s parents in the Bahamas in the last 2 years. The cost? $121 million funded by the good ol’ customers of FTX 🙃

7% — the current Ethereum staking rewards on staking pools such as Lido. The total ETH asked on Ethereum 2.0 is 15 million ETH worth $18 BILLION 🤑

-95% — Justin Bieber’s return on his Bored Ape Yacht Club NFT which he purchased for $1.3 million, and now he’s like Baby Baby NOOOOOOO 😭

30 — the number of crypto meetups happening in Bangalore during ETH India, the first ETH Global event in 🇮🇳

Register for these events here.

Milky Meme of the Day

If you want more doodh then, be sure to follow our Twitter (@DoodhwalaDaily)

That’s all for today bhaiyo aur bheno! Naale Sigona!

Aakash "Dahi Cheeni" Athawasya & Arvind "Doodh Peda" Krishna

Yo! Our legal and financial advisors (aka our good ol’ conscience) have asked us to add this boring disclaimer.

None of what you read here is financial advice. We aren’t here to get you to buy or sell a crypto. We’re only here to tell you what’s up in crypto today and make you laugh. So, if you screwed up on a trade, that’s on you G. Stay safe in the markets.