Wikipedia gives a list of the other ways: https://en.wikipedia.org/wiki/Depreciation#Methods_for_depre...
(I also vaguely remember a lot of people screaming bloody murder about how it's unfair to oil wells to get accelerated depreciation.)
Of course there are, and they should actually be using them. But then fundraising would be harder. They are cheating on accounting, in order to raise equity capital, and hoping that the price of bitcoin will go up in the future and cover the losses.
IIRC, tax authorities carefully regulate how quickly you are allowed to depreciate. The reason is that with depreciation you reduce your profit, and pay less in taxes. There is thus an incentive for firms to tweak depreciation and pull it forward, to either concentrate it in relatively more profitable years, or generally push tax payment further back into the future.
To counteract that, tax authorities often specify an upper limit on how much you may depreciate every year. These limits often distinguish by type of asset, and allow for faster depreciation for shorter-lived assets, but I could imagine that the tax code makes no provision for ultra-short-lived crypto mining equipment.
I think that’s overstating it. You’re always going to depreciate to 100% eventually[1], so faster depreciation just means you realize a loss (and reduce the tax bill) sooner rather than later.
[1] or sell for actual value, in which case you adjust the books to the actual loss of value which may before or less than the depreciation formula estimated.
Not sure how relevant it is to the issue described in the article: depreciations that are too small, thus front loading profits - but it might be that the tax code prohibits larger depreciations.
If a crypto-miner becomes unprofitable to run, selling it for less than the "after depreciation basis" effectively accelerates the depreciation.
What the article is saying is that standard accounting practices might obfuscate miners true profitability over the lifetime of depreciable hardware. My argument is basically that, as I believe PoW is guaranteed to be unsustainable in the long run, all of the miners who are eventually left "holding the bag" when the music stops (and by holding the bag I mean have invested millions in mining equipment that is suddenly worthless) will be unprofitable at that point.
To argue it somewhat differently: systems like Ethereum have essentially come to the same conclusion I have, and will be phasing mining out altogether for PoS. The reason Bitcoin isn't doing that is because miners have considerable more power over the direction of the protocol. Which might be fine if PoW we're long-term sustainable, but it's not.
> I don’t think it ends well.
That last line renders your whole point about the author simply being interested in the economics of mining for the sake of mining (rather than economic sustainability of the practice) inaccurate as well as making you a hypocrite!
The argument falls apart without Bitcoin stagnating into obscurity, so the same point is (less) obviously implied.
Some investors are constrained in what kind of assets they can invest in, so buying stocks of Bitcoin miners might seem like a reasonable proxy for buying Bitcoin outright (similar to how some investors looking for gold exposure actually buy gold mining stocks). The point of this article is that that strategy might be inferior to buying Bitcoin outright because the stocks are overvalued compared to their intrinsic capability of producing Bitcoin (note how Bitcoin price predictions aren't even discussed). It's a classical value-based investment thesis that might lead to the opposite conclusion at different stock prices.
The author says that he holds short positions, and I can imagine that he's probably used derivatives to hedge out BTC price movement risk and purely bet on his thesis that those miners' stocks will perform worse than the price of Bitcoin itself.