Part 12/17:
He emphasizes that during bull markets, increased Bitcoin prices can cause hash rate to soar, but physical limitations—like chip supply and infrastructure—prevent instantaneous scaling. He illustrates that historical trends show industry growth lagging behind price rallies due to real-world constraints. “You can't just click your fingers to double the hash rate,” Dan remarks.
The Asymmetric Nature of Mining Economics
A core concept Dan elaborates on is the asymmetry of Bitcoin mining: its downside protection and exponential upside potential. As Bitcoin's price falls, high-cost miners shut down, reducing global hash rate, which benefits low-cost miners by increasing their share of the network and making their operations more profitable on a per-coin basis.