Wuzhen·Genesis Mining CEO: Only the most innovative companies and the most efficient miners can survive

On November 8th, the “2019 World Blockchain Conference·Wuzhen” hosted by Babbitt was officially opened. The conference gathered more than 100 global blockchains, digital assets, AI, 5G experts and scholars, and technical geeks. Opinion leaders and founders of popular projects, with the theme of “application unbounded”, explored the application of blockchain, technology frontiers, industry trends and hot issues, and promoted blockchain technology and industrial innovation.

Genesis Mining CEO Marco Streng gave a keynote speech "Predictions of Mining." In his speech, Marco made predictions on the mining industry and gave five important trends in the development of the industry. First, the mining industry needs to be decentralized, including the level of the mining pool and the level of mining hardware. The industry needs to focus on the world. Second, enterprises need to have a more social responsibility and invest part of their profits and computing power into social public welfare and scientific research. Third, the industry needs to promote the use of clean energy; fourth, the future mining hardware efficiency will continue to increase, the chip size will continue to reduce the quantum effect; fifth, innovation must win, only the most efficient miners can survive Going down, the scale effect is also very important.

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The following is the full text of the speech:

Good afternoon everyone, I am very happy to be able to attend this meeting. I never thought I could come to such a beautiful town in Wuzhen, China!

Today we are talking about mining, which is the beginning of cryptocurrency. The Genesis Group is a very large overseas mining company. Our electricity is mainly from Europe. This place is very cold and the electricity is very cheap.

Mining has grown from a very small industry to a very large industry, as do miners. In 2013, when I started mining in the dormitory as a student, I started to try this industry. Our dormitory is only 10 square meters. We were very excited about the blockchain at the time. When we started Genesis in 2013, the price of Bitcoin increased a lot at that time. It went up from $100 to $200. The whole industry developed very fast, and at that time there was a very big gold rush, and many people thought Get bitcoin because each of them sees a dream of wealth here.

We have worked very hard and developed very fast, so that we can continue to expand the company. The first step is to go to China. In 2014, we came to China to expand our business and make our data center bigger and bigger. We are looking for low-cost energy and clean energy around the world. One place is Iceland, they are 100% clean and very cold. The electricity price was very cheap there, so we transferred the mining equipment there and then got a big expansion there. Today Genesis operates on more than three continents and has more than 10 data centers. We use 70 megawatts of electricity around the world, and we can imagine how big we are based on electricity consumption.

I want to talk about the future below. How will the world of mining continue? We have seen such a large mining business, and many people are committed to mining, and where will it go. In this regard, we have 5 predictions and 5 very important trends in the mining industry.

1. The mining industry will be decentralized. There are currently very big problems, and 2/3 of the computing power is hosted in China. Not only this, but also 2/3 of the computing power is in China, so the mining hardware is very concentrated and the mining pool is very concentrated. What does this mean? The vision of the blockchain is decentralization. Mining is the core support of Bitcoin. It should be distributed around the world. So it is very important that we have to make mining and data centers more dispersed around the world. Hash computing is a great innovation, often called a decentralized mining agreement. In fact, as you can see, this is the distribution of the current mining pool. We need to decentralize at the pool level. Then with the hardware distribution, it is also possible to decentralize the hardware distribution. There are many opportunities for miners, and in many parts of the world, their electricity prices are much lower than in China, and their climate is very suitable. In addition, there are many benefits. For example, in the Nordic countries or the United States, regulation is very clear, which is a very good advantage. We don't have to move all of our business out of China, but we need to decentralize mining and we need to focus on the world.

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2. The second prediction is very important, we are aware of environmental issues and corporate social responsibility. Large companies, Fortune 500 companies spend tens of billions of dollars into corporate social responsibility, I think this is very important. We need to be more aware of the contribution we make to the world, and in areas that may not be profitable, we must also look at these areas. So we have to invest a part of the return on investment and computing power in people and technology research that is needed, because I think technology is very important, it is the core of innovation. So science and technology need to be supported, so all the blockchain leaders must be aware of this.

3. Promote the use of clean energy. There are many criticisms in the industry, but these criticisms are not fully based. Many people say that the mining industry is very bad, this is not right. In fact, many studies have shown that the mining industry supports the renewable energy industry because the energy of mining is not mainly from fossil fuels, and 70% of the mining data centers are driven by hydropower. In fact, mining is a contribution to the world's renewable energy, so I think this is also very important, to emphasize this. Mining miners need to be aware of this and we need to enter the renewable energy industry. I want to invite everyone, especially to the Nordic region. There are many dams in the Nordic region, and a lot of geothermal energy is clean energy.

4. Of course, the mining industry also needs to lead the way in technology. Everyone knows that if you want to enter the mining industry, you need to constantly innovate to become a wave. Chips are becoming cheaper and more efficient in this industry. We can see that Samsung 7nm and TSMC's 5nm chips are coming soon. This is a very exciting time. It can be seen that the size of the chip is getting smaller and smaller, and there will be a quantum effect, which will play an increasingly important role. This is a very pioneering era.

5. The last prediction is that innovation will win, and innovation will win in mining. Mining mining is a cruel industry, and only the most innovative companies will win. We can see this picture here, we can see that the computing power of the network is growing more and more, and there is no high tolerance for the miners. We can see that the profitability of mining has decreased a lot in the past two years, and I emphasize three thresholds, one of which is the threshold, the red point, and its profitability is lower than the red line, meaning that all miners cannot survive. This means that their equipment is expensive and inefficient. When the profitability is below the red line, all miners will be out. When they are below orange, medium-efficiency miners will be out, they are priced lower, still at medium levels, and their mines are medium-sized. Who will survive? The company with the most efficient chips will survive. They have to achieve economies of scale, which can reduce costs, because they have such a large operation, can significantly reduce their operating expenses, in order to survive.

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Finally, I want to thank everyone for listening. I think it is a very exciting time. Mining is the core of the blockchain, which is indispensable for the public blockchain. It is very important for Bitcoin. I hope everyone is very excited about this technology, and its future makes us very excited. Thank you very much for listening!