Presumably the company in question could easily manufacture a whole bunch for itself and get a significant portion of the bitcoin market
They can get 100% of the mining and transaction fees market by snapping their fingers. Once they’ve made their initial investment into manufacturing the chip, the marginal cost of making more of them is minimal. Far below the $30k they’re selling the 1 TH solution for.
They can grab 50%+ of the mining market for themselves pretty easily. Then, they can increase their capacity to keep up with the growth of the network for cheap—all while they sell their processors to others, who pay much more for the mining capacity they get, than it costs for Butterfly Labs to make more.
(although it would have to be careful about destroying the currency’s value).
It’s possible to crash the currency if you’re in a position where you can reliably mine more than 50% of the blocks. When you have more than 50% of the network’s computing power, you can exclude other miners—gain 100% of the market by simply ignoring everyone else’s blocks. The P2P network will respect your chain, because it’s longer. Then, you can impose any transaction fees you like, or refuse to process any transactions at all.
However, unless you intentionally do things like that to crash the currency, its value doesn’t come from the miners. It comes from people who use it for transactions and for storing value, which aren’t necessarily the same people who mine the currency.
They can get 100% of the mining and transaction fees market by snapping their fingers. Once they’ve made their initial investment into manufacturing the chip, the marginal cost of making more of them is minimal. Far below the $30k they’re selling the 1 TH solution for.
They can grab 50%+ of the mining market for themselves pretty easily. Then, they can increase their capacity to keep up with the growth of the network for cheap—all while they sell their processors to others, who pay much more for the mining capacity they get, than it costs for Butterfly Labs to make more.
It’s possible to crash the currency if you’re in a position where you can reliably mine more than 50% of the blocks. When you have more than 50% of the network’s computing power, you can exclude other miners—gain 100% of the market by simply ignoring everyone else’s blocks. The P2P network will respect your chain, because it’s longer. Then, you can impose any transaction fees you like, or refuse to process any transactions at all.
However, unless you intentionally do things like that to crash the currency, its value doesn’t come from the miners. It comes from people who use it for transactions and for storing value, which aren’t necessarily the same people who mine the currency.