Dr. Marco KrohnCo-founder & CFO Genesis Mining

Cryptocurrencies & Mining

mkrohn5

What is so special about Bitcoin?

● Digital? USD ⇒ almost digital

● Decentral?

○ no central nodes / no single point of failure

(“SPOF”)

○ all nodes have (almost) the same information

● Why decentral? ⇒ E-Gold (1996 - 2009)

● Advantages?

○ censorship-resistance

○ resilience

○ no trust in third-parties required

● Disadvantages?

○ inefficient all nodes need to be updated

○ difficulty of reaching consensus proof-of-work

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network topology of Bitcoin

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Properties of Bitcoin

Non-inflationaryOnly a specific number of coins will ever be issued.

(Mostly) AnonymousYour name is not linked to

your transactions.

GlobalCan be sent to and from any

country

DivisbleEvery coin can be divided

into decimals.

Durable & AccessibleIt’s accessible data from every

device with an internet connection.

DecentralAn independent system with no

single controlling body or organization.

Open SourceAnyone can read the code; Volunteer to help write it;Or even copy it and create

a new currency.

Peer-To-PeerCoins are sent directly from

one user to another.

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Mining is the best consensus system for

public blockchains so far

Miners protect the blockchain and thus

enable a reliable transaction network

They are rewarded with freshly

generated currency units

How to reach consensus in a decentralized system?Proof-Of-Work is the suitable solution.

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CPU Mining (2010)

via standart computer cpus

GPU Mining (2011)

via graphic cardsFPGA Mining (2012)

field-programmable

gate arrays

ASIC Mining (2013)

application-specific

integrated circuits

~10x ~2x ~100x

A look into the mining hardware evolutionMore hashes per second means a higher probability to find a block

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Home Mining

Buying mining hardware from

manufacturers or retailers

Installation of hardware using mostly

standard PC accessories (PSU etc.)

Installation of software using mostly

community driven open source programs

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Miners are bought mostly in bulk orders

directly from manufacturers

Installation of hardware in large scale

facilities with optimized infrastructure

Using customized software for controlling and

hashpower optimization (e.g. Genesis Hive)

Large Scale Mining

Genesis Enigma Ethereum Mine

Genesis Bitcoin Mine

Investment Opportunities

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Economics of Mining

The model shows that in case of a continuous

profitability decrease the miner with the highest

efficiency continues to mine and increases his returns

when others are forced to stop mining.

Efficiency is key!

Hardware efficiency

Performance of the ASIC chips, the PCBs and other hardware components.

Infrastructure efficiency

A) Mining facility cooling and general structure. Economy of scale.

B) Hard- and software monitoring and maintenanceOversight of all processes.

Electricity rates

The price of the electricity and the option to scale while keeping the prices minimal.

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Bitcoin (BTC)

BTC price USD 5,000 – 6,000

Market Cap USD ~100 bn

Supply BTC 16,650,000

Max Supply BTC 21,000,000

Why Bitcoin?

• limit 21 mn (79% mined already)

• most stable and established cryptocurrency

• market cap ~ USD 100 billion

• mining technology close to the technological limit (~7 nm)

• “safe haven” cryptocurrency gold

• increasing transaction fees!

Why not?

• ongoing struggle about Bitcoins direction (“blocksize debate”)

• mining concentration

• increasing transaction fees!

• scalability?

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Ethereum (ETH)

ETH price ~USD 300

Market Cap USD 28 bn

Supply ETH 95,300,000

Why Ethereum?

• Block time = 14 seconds

• Multiple assets on the same chain

• Turing-complete programming language

• High-level programming language

• Smart contracts, ICOs

• GPU mining decentralized

Why not?

• young, fast-evolving technology (e.g. proof-of-stake)

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Zcash (ZEC)

ZEC price ~USD 225

Market Cap USD 480 mn

Supply ZEC 2,480,000

Why Zcash?

• Similar to Bitcoin

• equihash GPU mining decentralization

• Advanced anonymity (“ZK-SNARK”)

• Scarcity 21 million coins

• Mining just started

Why not?

• ZK = zero knowledge is a young technology that has not been tested for a very long time

• regulatory problems?

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IOTA (MIOTA)

MIOTA price ~USD 0.44

Market Cap USD 1.22 bn

Supply MIOTA 2,779,530,283

Max Supply MIOTA 2,779,530,283

Why IOTA?

• Tangle not a blockchain

• scalability!

Why not?

• young technology that has not been tested for a very long time attack vectors?

Thank you.

mkrohn5