Genesis Mining are the world’s largest cloud cryptocurrency mining company. Founded in 2013, the platform has established itself as one of the leading platforms for buying hashpower.
With more and more miners getting in on the act, however, mining difficulty rising, and critics outside the industry slamming its soaring environmental impact, many within the industry feel that mining isn’t quite what it used to be.
To find out more about these issues and how blockhain can be employed by companies, I spoke with Paulo Fiorio - marketing manager at Genesis Mining - at the CryptoCompare MJAC London Blockchain Summit last week, where he participated in a panel discussion on the centrality of blockchain to business.
Avi Rosten: With respect to the main question of the panel, do you think businesses who don’t use blockchain are at risk in the future?
Paulo Fiorio: Well blockchain is not for every business, it depends on their business model - for most businesses it doesn’t make any sense, to develop a blockchain is very expensive, for some businesses you just need a light database.
For example, with IBM and Maersk, they saw that with a shipment of flowers from Kenya to Rotterdam there were 30 organisations involved and 200 communications - you have all these people that need some help communicating,
If you have a blockchain you have a timestamp of when the transactions take place - in this case it would make sense.
AR: What would be an example for you of where blockchain doesn’t make sense?
PF: A hotel for example - you have a database of customers, sales - the only people who are using that are your employees so if you trust your employees you only need a database for that. A simple business doesn’t need it
But if you are dealing for example with a supply chain for dealing cars, you have many manufacturers that are providing the parts of a car, then it’s interesting…
AR: The first question I always ask ICOs is “why does this need blockchain?” Do you feel that question isn’t asked enough in the crypto and blockchain industry? Can it often just be a way of getting investment?
PF: Yes, people aren’t answering this question enough.
In the last few years there are a few key words that get people’s attention - ‘artificial intelligence,’ ‘internet of things.' In the 90s it was the internet, then a few years ago it was ‘big data’ - without questioning the application of that…
AR: Moving on to mining, does the transition need to happen away from Proof of Work: what about the environmental costs associated with mining?
PF: Most of the data centres are close to dams, gas pipelines - these places, if they weren’t data centers - they wouldn’t be selling the data to anyone - it was just a waste of energy.
In China they have huge dams and they are not selling the energy to anyone else, with the data centres going there they are creating jobs and stimulating the economy.
AR: So are you saying you see the future of mining as where there is surplus energy, where it’s underutilised?
PF: This is happening right now, the companies are going for these places - places with cheap electricity - they are getting this cheap electricity because no one was buying it…It’s a way to improve the local economy.
AR: A lot of people outside the crypto world are very concerned about the environmental impact of crypto…
PF: We are using green electricity. For example - in Iceland we are using geothermal energy: we go there for green energy and create jobs, energy which wasn’t being used. More and more companies are going for green energy as fossil energy is getting more and more expensive.
AR: What about the profitability of mining, if the bitcoin price drops so that it’s no longer very profitable - will it damage your business model?
PF: It can happen, but the price will bump again.
It’s a system that will regulate itself. Let’s say it reaches a certain price, miners will shut off their machines until the price reaches a profitable price again.
One of things we always focus on is keeping the costs very low, we go to places that have really cheap electricity, we saw competitors in the past that had data centres in the US in places that were very expensive and it broke them when the price dropped.
AR: Was it hard to find a place that was both cost efficient and green?
PF: No, there are so many places, every week I get 2 or 3 people telling me “you should come to Chile, Guatemala”…it’s always good for the people, it creates jobs and teaches people about cryptocurrency and blockchain.