David Ben Melech

David Ben Melech is a freelance financial / technology writer and former securities attorney.

A Conversation with Genesis Mining CEO Marco Streng

Genesis Mining CEO Marco Streng studied mathematics at the Ludwig-Maximilian University of Munich before co-founding Genesis Mining in 2013 and becoming a passionate advocate for blockchain technology and cryptocurrency.
Genesis Mining operates state of the art data centers all over the world, enabling customers to rent hash power to mine Bitcoin, Ethereum, and other cryptocurrencies. Genesis Mining now serves nearly two million customers globally.
I recently had the opportunity to talk to Genesis Mining CEO Marco Streng and discuss the state of the blockchain, the future of cryptocurrency, and the challenges and opportunities presenting themselves in the cloud mining space.
What is the biggest challenge you are facing right now?
The undeniable fact is that we are in a highly volatile industry. Regardless of what we do, there is always the risk that the market will enter another bear cycle, which can make forecasting sales and allocating resources difficult. Over the years, we have invested in other projects that have allowed us to diversify some of this risk, so that we can weather any storm that hits the crypto industry.
What lessons from the short history of cryptocurrency inform your current work?
We understand that the market works in cycles, so when things are either good or bad, we have the industry experience to realize that either way, change will eventually come.
Now that Bitcoin is nearly ten years old, are you seeing the industry mature?
Absolutely. I think compared to the quantum leaps that have been done in the initial years where you had nearly every six months, major milestones or major gains in efficiency just on the chip level, now it really is more gradual and we've seeing a slower increase of efficiency. It's really become a heavy industry. Compared to the beginning of the gold mining industry, for example, people were able to go into the river and find gold nuggets. Now there's big capital backing involved, large financial commitments, and you have to be really fully committed to the space in order to be successful.
We offer solutions to our customers in the cloud so that they don't have to take these huge upfront commitments, and they can buy their hashing power in the cloud. This is very important because our goal is to give everyone the ability to participate in mining. Unfortunately, this is only possible now for large scale players. So we, as a large scale player, offer this entry to the mining market, to everyone, in the cloud. I think that's very important also for the whole industry.
In the wake of a number of high-profile attacks and token thefts, how does Genesis Mining assure and improve safety and security?
Because we offer daily payouts to our customers, at any given time, we are not holding a large portion of their coins, so while we do face the risk of being hacked like everyone else, the overall risk of loss for us is quite low.
Why mining compared to buying the cryptocurrency directly?
I don't even want to compare it, necessarily. I think they are two very important asset classes. You can buy the coins directly, or you can mine them. Personally, I think it makes sense if you want to get exposure to the cryptocurrency space, to have a healthy portfolio of mining and coins.
For example, you can mine gold, and you can also buy gold. What we say to miners is that comparing to what they can achieve if they would do it in their home and do it alone, they will have to overcome a lot of hurdles and would quickly realize also their electricity costs at home is not comparable, and getting less and less competitive. The benefits you have through economies of scale and all the knowledge that we have gathered over the last five years of operations, this is what we're giving to our customers, so that they can mine with the highest efficiency, and get the best ROI for their mining investment.
What will be the impact of the planned halving of Bitcoin in May 2020?
This is not the first halving we have overcome and I personally think that halving is an important factor for Bitcoin. I think it's important that it's there obviously because of the fundamental economics and the fact that Bitcoin is limited to 21 million. So you have to have these halving events occurring. I think for the mining space it's actually also great, because it strengthens the competitiveness of the whole industry. Only the most efficient players will be able to remain. And that drives everyone to innovate and to stay ahead of the curve. And if you can do so, then you have a great chance to overcome difficult times and continue to produce while others have to stop.
What is the future for Genesis Mining?
We have been operating now for five years, since really the beginning of the industry. Back then, people were still mining at home. Of course, the advantage that we have is the time and all the experience that we have within the space. We are doing everything to stay ahead of the curve and constantly reinvest in our technologies. We have really made major investments over the past several years to be able to offer now to our customers, for example, something which is called Radiant, which basically is the technology that consists of all these benefits that we have made over time. It also uses our in-house optimization tool, which we call Genesis Hive, which basically optimizes these data centers to a maximum. I think that blockchain and blockchain infrastructure mining is our daily bread and butter and this is where we are strongest at. This is where we come from and this is where we are going further.


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