{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Episode 001 - FOCUS ON FINTECH Series: Cryptocurrency Mining Explained - Aurum Capital Ventures (with John Paul Baric, Founder & CEO)","description":"Introduction Welcome to Distilling Venture Capital.  I am your host, Bill Griesinger Distilling VC is a visionary podcast that provides an insightful and informed view of the key trends affecting the VC and tech startup world.  My mission is to cut through and go beyond the hype that tends to dominate the tech landscape.  And provide you with information you can use. Episode Introduction: I would like to introduce Today\u2019s Episode topic as follows;   We hear a great deal about cryptocurrencies, mostly Bitcoin, and the impact they are having on the financial services and investing landscape, with respect to how we define money, e-commerce, make investments, and even what Central Banks are doing to authorize\/issue their own digital currency or stable currency, etc. On the other hand, we don\u2019t hear much or may understand very little about the derivation and creation of cryptocurrencies themselves.  Where do they come from?  What is their intrinsic value and utility?  How is all of this accomplished? So, today We\u2019re going to get into what I consider a very interesting segment of the crypto-currency world \u2013 Crypto-Mining - that we don\u2019t often hear that much about but yet is vitally important to our ability to be able to utilize these digital currencies, digital assets to conduct financial transactions:  Crypto-currency Mining To answer these questions and distill down our understanding of the crypto-mining industry, I am joined by JP Baric who is the Founder and CEO of an technology\/energy company directly involved in multiple aspects of the crypto-mining industry, operating as Aurum Capital Ventures   Aurum Capital Ventures is leading the way not only in the development and deployment of turnkey crypto-mining technology in the field\u2026but also efforts to bring much needed liquidity and financing to the mining and cryptocurrency markets themselves\u2026 So, we\u2019ll dig into those topics\u2026   Welcome JP and thanks for joining me today.  To kick off today\u2019s conversation, JP, perhaps you can provide a little background about the origins around the formation of your Company and identify its core goals and objectives.    What you Will Learn in Today\u2019s Episode: Define Cryptocurrency-Mining & How it Works   The Future of Crypto-Mining Crypto-Currency and Crypto-Mining are Fully Transparent Markets, by Design The Search for the Best Equipment and Cheapest Source of Energy  How Aurum Capital Ventures is Changing the Game and Mindset Regarding Crypto-Mining and the Production of Energy Aurum is Both a Buyer and Seller of Energy Aurum is Redefining How Energy is Consumed and Transmitted Aurum is Creating Unique Investment Vehicles to bring needed liquidity \u2013 both debt and equity capital \u2013 to the Crypto-Mining and Crypto-Currency  How Crypto-Miners are Rewarded What is a Halving Event and What does it Mean for Cryptocurrency Mining? And Much More\u2026   Cryptocurrency Mining Explained Miners are, in effect, getting paid for their work as auditors.  They are doing the work of verifying previous bitcoin transactions.  It is said that, miners are, in effect, "minting" digital currency\u2026 By verifying transactions, miners are helping to prevent the "double-spending problem," a scenario in which a bitcoin owner illicitly spends the same bitcoin twice  In addition to rewarding miners and supporting the bitcoin ecosystem, mining serves another vital purpose:  It is the only way to release new cryptocurrency into circulation.  In other words, miners are basically "minting" digital currency The primary draw for most Bitcoin miners is the prospect of being rewarded with valuable bitcoin tokens To earn bitcoins through mining, you need to meet two conditions.  One is a matter of effort; one is a matter of luck: 1) You have to verify ~1MB worth of transactions. This is the easy part. 2) You have to be the first miner to arrive at the right answer to a numeric problem. This process is also known as, proof of work The integrity and value of crypto is predicated upon the ability of miners to confirm, validate a 1MB block   We just had a pre-designed reduction in the reward that miners can earn when mining, referred to as a Halving Event:  On May 12, 2020, Yesterday, the reward for mining Bitcoin just dropped from 12.5 BTC to 6.25 BTC, for validating a 1MB Block -   This is what crypto- miners face all over the world.  Block-halving is hardcoded into how Bitcoin operates.  Its business as usual and it means that Bitcoin is doing exactly what it is supposed to do according to the original design of Satoshi Nakamoto. Halving Event - So, when we talk about miners being motivated and incentivized by being rewarded with Bitcoin for successfully delivering a proof of work,  Describe what a \u201chalving\u201d event is and what it means \u2013 how it affects crypto-mining activity Why is There a Halving Event? There can only ever exist a maximum of 21 million bitcoins.  Therefore, the reward for making new ones needs to be reduced periodically in order to bring sustainability to its value.  That\u2019s exactly what blockhalving accomplishes once every 210,000 blocks (roughly every four years). The creation of \u201cmining pools\u201d Business Problem that Aurum Capital Ventures is Solving Mining is a very capital and energy intensive business and is presently \u201coversupplied\u201d globally Description of the main Business Problem Aurum solves \u2013 Its value proposition Where geographically are your major deployments? Discussion of Iowa, NY and other major installations Unique concept and approach to the energy component of operations Business Model Characteristics Your Bus. Model has Multiple Revenue Sources: Turnkey Mining Equip Deployments & hosting services;  Speed & Efficiency through repeatable process of Power procurement, infrastructure deployment, and remote management Running your own Mining servers Managed Services Selling used equipment to established network Defining and Solving the Capital Procurement Obstacles of the Crypto-Mining Industry: One of your firm\u2019s stated GOALS: There exists a lack of liquidity in the space.  JP explains how Aurum is creating unique investment vehicles to enable institutional capital to enter the space to provide liquidity Launch Global Bitcoin Mining Fund to allow for better market liquidity and transparency in the sector;  JP Baric Explains Securitization of mining hash rate (hash rate tokens);  JP Baric Explains Launching vehicles like investment trusts and funds that offer investors exposure  Goal: Enables Liquidity Unique Financing Approach: Issuance of secured, insured bond to finance equipment and projects Attractive risk-adjusted return characteristics for investors Opportunities for arbitrage in power contracts Providing increase in credit and capital to Aurum and the entire market Providing investment banks Mining, b\/c it\u2019s an infrastructure investment is easier for institutions to get into to than Bitcoin purchasing Not currently in the prospectus of the major Energy Funds to invest in energy consumption products \u2013 they are only focused on energy generation - Bitcoin is not part of their investment thesis. Allows exposure to underlying Bitcoin asset and mine Bitcoins at a discount relative to the volatile Bitcoin market price itself.  JP Explains Competitive Advantages Modular, mobile equipment deployment \u2013 more efficient Rapid Payback\/Utilization of \u201cStranded Energy\u201d - Aurum\u2019s mobile mining deployments profitably monetize any type of stranded energy anywhere in the world Situation where the value of the underlying collateral (mining equipment) can increase in value during life of the equip. and related financing, due to a halving event of Bitcoin Allows you to build inventory of equipment for deployment now, in advance of halving event that you know occurs approx. every four years JP Baric explains Aurum\u2019s business model advantages relative to competitors such as Genesis Mining Closing Remarks JP provides an overview of where he sees things headed for crypto-mining industry in general\u2026 We\u2019ve just had this Halving Event \u2013 what are some key things that happen next as it relates to Crypto-Mining? JP explains Aurum\u2019s leverage, differentiation and its expertise to bring to market top equipment and energy sources required by Miners and the financial liquidity mechanism to make it happen \u2013 keeping with Aurum\u2019s core mission Contact Information for Aurum Capital Ventures Those seeking additional information and wishing to learn more about Aurum Capital Ventures: JP\u2019s Twitter Account \u2013 @JPBaric Sign up for Investor Newsletter at: Aurumcapitalventures.com Thank you for joining me for this edition of DVC.  I hope you found the topic interesting and useful.  I am currently working on the DVC website.  In the meantime, Please send questions and your comments regarding today\u2019s episode to: bill@ccs.capital Stay tuned for my next Episode, coming very soon, where I will I am going to provide a follow-up to Episode 001, Unicorn-Mania, where I will dig into and discuss the sagas of WeWork and Uber in the context of Unicorn-mania.  Thank you again and I look forward to joining you for my next Episode of Distilling VC. 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