{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Episode 009 - Cryptocurrency Mining\/Energy Operator Aurum Capital Ventures - (Revisit 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: Welcome back everyone.  Well, today I have the pleasure of welcoming back to the program JP Baric, CEO and Founder at Aurum Capital Ventures, which is engaged in the crypto-mining business.  JP thank you for coming back to join me on the show.    So, the last time we did a program was in mid-May, about 5 months ago, and I introduced Aurum Capital Ventures then as a technology\/energy company directly involved in multiple aspects of the crypto-mining industry \u2013 and we delved into the many interesting aspects of your business model.  I have received a lot of positive feedback to that show \u2013 so glad you\u2019re here to do this again\u2026 Crypto-currency Mining involves sourcing and utilizing the most advanced equipment, for sure, which you guys provide, but also one of the key components that has a huge impact on the cost and viability of crypto-mining itself \u2013 is the cost and amount of energy consumed \u2013 and, therefore, the energy component and its costs have a huge impact on the industry and its success Aurum has developed a truly innovative vision and approach to this aspect (Energy) of the business.  And I wanted to provide a platform here today for you to explore in-depth how you think about and approach the idea of generating, producing and sourcing energy at the core of   Please introduce and present this in the way you think would be most helpful and useful for our listeners to appreciate the impact of this vision Energy Utilization & Economics of Crypto-Mining: JP provides a deep-dive into the interrelated metrics and dynamics of Energy and Crypto-mining.  Here is what you will learn: Terahash Rate \u2013 core measure of energy usage in crypto-mining Can predict and model the Terahash rate for mining equipment.  USD per terahash \u2013 how much we make on a USD basis - the speed of how fast a mining machine runs.   Price per terahash dropped to 7.5 cents \u2013 when BTC crashed (March).  Was 13 cents per terahash.   Today, sitting at 8 cents per terahash with BTC at roughly $12,000 today.    Amount of new machines on the network has grown \u2013 at 8 cents per TH \u2013 betting that price of BTC will continue to rise\u2026 Miners all over the world are thus, searching for most cost-effective energy costs.   Cost\/Mwh Rates in crypto-mining Old machines vs. New machines and economics Revisit the halving event from May 12, 2020 \u2013 when reward for mining was, by design, the reward went from 12.5 BTC to 6.25 BTC \u2013 Impact? Inflation Rate of BTC (1.8% infl. Rate) compared to USD inflation\u2026digital currency has a lower effective inflation rate than the fiat currency! BTC price may be volatile but depends on what you compare it to New equip. is coming online line as fast as the manufactures can produce them.  Most are made in Taiwan and China Coming into facilities that have power in the 4cent to 5 cent range Mining Machines: The S-9s are the older;  Newer are the Ant Miner S19 Pros are 30 Juuls per terahash.   Square Announces Purchase of $50MM BTC for its Balance Sheet Here\u2019s a perhaps diversion from our main topic related to mining & energy, but it\u2019s related to Bitcoin and the larger ecosystem.  So, here\u2019s some industry news I wanted to get your opinion on re Square \u2013 We all know them as the POS payment company. not only does Square have the retail app and footprint now, but they\u2019ve also got a lot of very granular, small business merchant data. They've turned that into Square Capital and the small business lending business.  And the data on the consumer side, the spending side, the merchant acquiring side, and visibility into SMB finances to drive the business forward, creates a pretty tight loop, closed ecosystem.  Square just recently announced \u2013 put out a press release actually \u2013 that they had purchased around $50MM of Bitcoin\u2026Now other major financial services companies have bought substantial sums of BTC too, but didn\u2019t necessarily announce it by press release \u2013 What\u2019s going on here in your view? This from another podcast I listen to called ReBank.  Their comments regarding Square purchase of BTC Will Beeson (ReBank):  \u201cIt's like investing in treasury assets, and you use them to run your business.  It's about 1% of Square's assets.  And I think the bigger question is, is this Square, or is this a representation of broader investment theory?  Like is Bitcoin now something of an asset class that institutional investors and traditional institutional investors are taking more seriously and are viewing either as an inflation hedge or an option on potential future upside.\u201d Lex Sokolin (ReBank\/Consensys):  \u201cAll you have to do is look at venture investments and Andreessen Horowitz with hundreds of millions of dollars in dedicated crypto funds and that being true for the long tail of Silicon Valley players as well. And so when people who want to be like Square and want to have that same outcome, or like Twitter or venture funds that want to be like Andreessen, which is by the way, 100% of anyone who is an entrepreneurship, when they see these actions being taken, they're both symbolic, but they're also inspirational.\u201d Then, if that weren\u2019t innovative enough, Aurum Capital Ventures is also focused on leading efforts to bring much needed liquidity and financing to the mining and cryptocurrency markets themselves\u2026Can you elaborate on why this is important and what you are doing to facilitate attracting mainstream forms of capital to the industry? Other Learnings from 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 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 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 RemarksContact Information for Aurum Capital Ventures Those seeking additional information and wishing to learn more about Aurum Capital Ventures: JP\u2019s Twitter Account \u2013 @JPBaric Email:  jp@aurumventures.com Sign up for Investor Newsletter at: Aurumcapitalventures.com Launching new podcast called \u201cDigital Gold\u201d   Thank you for joining me for this edition of DVC.  I hope you found our discussion today with JP Baric and Aurum Capital Ventures interesting and useful.   Stay tuned for my next Episode, where I will have a very special guest of a high-profile company getting lots of buzz, that just went public via a SPAC in just the last few weeks.  Think electric truck technology \u2013 like big, 18-wheeler truck \u2013 industry.   That\u2019s all I\u2019m giving you for now.  Stay tuned\u2026 Thank you again and I look forward to joining you for my next Episode of Distilling VC. 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