Disclaimers: I, Jason Hommel, am now paid to research and write about TEXITcoin. My wife and I own both TEXITcoin and we are miners of TEXITcoin (TXC = the trading symbol for TEXITcoin). We also wish to begin trading TEXITcoin.
This article presents a look into how crypto mining supports crypto value, and how the crypto value supports crypto mining, specifically in view of TEXITcoin.
The value of gold lies, in large part, in the cost to mine it. But the value also lies in the scarcity, and the utility. Only about 1.6% of new gold is added to the existing above ground supply each year. And gold has a high value for the weight, and that creates both privacy and transportability. Critics of gold say that gold itself is not inherently valuable. The value of gold lies in the people’s perception of the utility of gold, or in other words, their perception of the utility of it carrying a high value for a unit of weight which gives it features such as transportability.
Crypto currencies mimic several of these factors. They have limited supply. Few coins are added as time goes on. There is a high cost to mine the coins with expensive computers that cost real world electricity to create the scarce coins. But crypto is actually better because they are more easily purchased by anyone with a cell phone, and more transportable, given the zero weight. And the currency can be transported instantly anywhere in the world with an extremely low cost. In contrast, gold dealers are hard to find, and shipping gold can cost up to 1% of the value, and is risky and dangerous.
With Bitcoin, we can all see intuitively, that the higher value of the coins creates a greater incentive to buy more computers to mine bitcoin. It’s harder with crypto to see that the mining itself also creates a value for the coins. The point, though, is that if someone is willing to spend money on mining a coin, or mining gold, if the price of the crypto or gold goes down enough, the miner, whether crypto or gold, may just choose to buy the crypto or gold instead. So in that sense, the desire to spend money on mining it, also becomes a floor under the price of the coins.
See this chart on how both mining power and bitcoin value correlate:
This url is the source of the chart, and provides more interactive details: https://newhedge.io/terminal/bitcoin/hashrate-vs-price
Before we get into the correlations between hashpower and crypto value, let’s quickly examine two cases where they don’t correlate at all.
First, if a person spent $100 million on a network in the basement and premined all their own coins, but nobody knew about it, the value of the coins would be zero. So there has to be a community of people involved, or the computers and network are worth nothing.
Second, XRP, or ripple, is almost exactly that. It’s a premined coin, so there is no active mining network, but it is used is for facilitating fast and cheap transactions between bankers around the world. That use creates a demand and a market cap of about $83 billion, without involving the public. But most fully or mostly pre-mined crypto currencies go nowhere.
https://coinmarketcap.com/currencies/xrp
TEXITcoin, known as TXC, represents a new way of thinking about cryptocurrency mining and value. The plan, led by Bobby Gray, aims to build the world’s largest privately owned crypto mine network that can be the backbone of other projects and apps that create additional revenue streams for TEXITcoin, and additional demand for the TXC currency.
The Bitcoin network has many flaws, one of which is that it’s difficult to build apps that run on top of it, due to the high transaction costs, which also limit its use as a circulating currency.
At the present, the TEXITcoin project is under a year old, and 512 people are mining TXC, and this number is growing fast – between 36% and 59% each month. As more people join, the growth rate actually speeds up, creating a snowball effect.
These transparent statistics are being published at https://payout.minetxc.com/statistics so that everyone can monitor the growth rates in real time.
What makes a cryptocurrency valuable? One factor is the size of its mining network. Think of it like a bank’s security system – the bigger and stronger it is, the more people trust the bank. In crypto, a larger mining network means better security and reliability. This, and low transaction fees, can encourage other people to build useful apps on the network, which creates more demand for the currency. These apps can vary widely from other crypto currencies to games and much more.
https://en.wikipedia.org/wiki/Decentralized_application
TEXITcoin plans to build a mining network that’s at least about one-thirteenth the size of Litecoin and Dogecoin’s combined network, which is a meaningful size in the crypto world. This implies a market cap for TEXITcoin of about $3 billion.
Looking at Pi Network also helps us understand TEXITcoin’s potential. Pi Network reached a market value of $3.8 billion using a similar community growth model, basically, an affiliate program. Confirm at coinmarketcap.com:
https://coinmarketcap.com/currencies/pinetwork
However, TEXITcoin offers several important advantages over Pi. First, TEXITcoin has real mining computers and facilities, while Pi still uses simulated mining. Second, TEXITcoin generates actual revenue from mining other cryptocurrencies to cover its electrical costs. Third, TXC can be traded instantly between users through its app at market prices, making it more useful as a real currency. Fourth, TEXITcoin focuses on building a strong community in a specific geographic area, starting with Texas.
If we use Pi Network’s success as a guide, we can estimate TEXITcoin’s potential value. Pi reached $3.8 billion in market value with a far less robust overall system. TEXITcoin aims to be one-thirteenth the size of Litecoin and Dogecoin combined, which would put its value around $3 billion (their combined value of about $39 billion divided by 13). These similar targets, reached through different calculations, suggest this goal is reasonable.
Right now, TEXITcoin has a market value of $2.5 million, with each coin worth about ten cents.
This implies a potential growth of 1000 times from ten cents to $100 per coin.
This currently ranks TEXITcoin around 5000th among all cryptocurrencies, out of several million cryptocurrencies. The project has mined 25 million coins so far, which is 7% of the total 353 million coins that will exist over the next 137 years. This controlled release of new coins helps maintain their value over time.
The project shows good financial management. Of the $850,000 raised from selling mining power, only $14,000 has gone to electricity costs. This efficiency comes from a clever system where the project buys more mining power than it sells to participants, and the extra mining power can be used to mine other cryptocurrencies. About half of the money goes to affiliate rewards for people who bring in new miners, and about 10% goes to buying more mining computers. They’ve also built up $300,000 in savings, showing they’re planning for the long term.
One unique feature of TEXITcoin is how easy it is to use as actual money. Users can trade coins instantly through the TEXITcoin app at market prices, without needing an exchange account. This makes it more practical as a real currency, not just an investment. Creating demand and use as a real circulating currency can really drive real world value.
Because TEXITcoin is building a level 1 mining network, and using extra mining power to mine other cryptocurrencies, it can afford to lower the transaction fees, which increases the demand for use as a currency. Every part of this plan supports all the other parts!
The project’s focus on Texas creates natural growth opportunities. With 30 million people in Texas, reaching the goal of 250,000 participants means convincing less than 1% of Texans to join. This regional focus helps build a stronger community and speeds up adoption through local connections. But literally anyone around the world can buy the TEXITcoin itself.
Like any cryptocurrency, TEXITcoin will likely see big price swings. Bitcoin’s price once dropped from $9 to 6 cents in 2010 before eventually reaching much higher values. However, TEXITcoin has advantages that help it handle these swings. The project can keep running through price drops because it makes money from mining other cryptocurrencies. This means it doesn’t depend on constant price increases or new people joining to survive.
The combination of real mining operations, sustainable business practices, and strong community growth makes TEXITcoin’s ambitious goals seem achievable. While the potential returns might sound too good to be true, they’re based on actual infrastructure, proven business models, and examples of similar (but inferior plans) that already succeeded in the crypto market. The project faces challenges, including market swings, but its strong foundation and multiple sources of value give it a strong chance of success.
NOTE THE FOLLOWING FORWARD-LOOKING DISCLAIMER: “This communication may contain forward-looking statements regarding TEXITcoin’s future performance, which are based on management’s possible theoretical valuations. Actual results may differ materially due to various factors including market conditions, competitive landscape, and regulatory changes. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof, and TEXITcoin undertakes no obligation to update them unless required by law.”
As I continue to investigate TEXITcoin, and watch their continued commitment to transparency, I am more assured of its future success.
The growth of the network of people, and the growth of the network of computers, is far more likely to continue growing. And TEXITcoin is growing. Fast!
See my prior articles:
“Why We Bought Texitcoin”:
“TEXITcoin as a Currency”
I have been asked (and paid) to poke holes in TEXITcoin, or better yet, deeply study it and come to my conclusions as to the validity of their opportunity and overall plan. I have a long history as a well respected independent researcher, and I am tasked with both understanding and presenting my feedback and views to my own readers, and with the TXC team, as they hope that they may make improvements where necessary, and/or use my work as a tool to further bolster their claims.