Cryptocurrencies & Mining · Why Bitcoin? • limit 21 mn (79% mined already) • most stable and...
Transcript of Cryptocurrencies & Mining · Why Bitcoin? • limit 21 mn (79% mined already) • most stable and...
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