Will DMB Blockchain Solutions survive Bitcoin halving? DMB Blockchain Solutions is a Canadian-based company listed on the TSX Venture Exchange and is doubling down on the BTC network. This belief in a massive bull market appearing post bitcoin-halving has companies taking on debt to finance their gamble.
DMG’s CEO and founder Dan Reitzik recently announced that his company had secured third-party financing to expand its fleet of ASIC processing hardware.
“DMB successfully negotiated third party financing for this recent purchase, believed to be one of the first instances of specific crypto equipment financing in the industry. This deployment of capital represents only 20% of the total amount offered to DMB under this non-dilutive debt financing.”
While the terms of the agreement are unknown, DMB is hedging its future on an internal forecast for network hash rate adjustments and token price post-halving.
While taking on debt in good times is a good idea for companies, debt can also creep up to a company and spiral out of control. DMG needs BTC to rise to counterbalance the 50% reduction in tokens awarded for discovered blocks – but if they do not rise, DMG is in trouble. Why? Their earnings will have fallen by 50%.
Satoshi Nakamoto already answered the question of how to remain profitable post halving in his whitepaper – by processing transactions, the long game, companies could remain solvent. However, many BTC block reward mining companies choose short-term profits over long-term growth.
Here’s what our own Kurt Wuckert Jr. has to say on this matter.
“We have been saying for a long time that Bitcoin miners need to transition from mining the inflation subsidy to mining for profitable transactions. Actually, Satoshi was saying this 12 years ago! The 1mb block size limit makes that a very complicated balance because individual users don’t like high fees, but BTC has no way to make up for it in volume. What happens next is anyone’s guess, but I would not be betting on parabolic gains from a blockchain that cannot handle a parabolic rise in demand.”
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