Will Bitcoin become the new gold standard?
Edwin The business of Bitcoin mining has exploded over the past year in tandem with the huge growth of the blockchain industry. During the Bitcoin boom of late 2017, mining profitability was through the roof.
As the price of Bitcoin fell and then stabilized around $8000, mining profitability fell with it, leading miners around the world to have to think critically about how their operations would stay profitable.
Recently, Finance Magnates spoke to John Kingdon, Managing Director of the Third Bladetec Bitcoin Mine, about the mine’s unique ownership model and the evolving role of Bitcoin in the world economy.
A Cooperatively- Owned Mine for a Decentralized Network
“The Third Bladetec Bitcoin Mine is going to be the largest Bitcoin in the UK,” John said, simply. “It is the first Bitcoin mine of its kind to be offered to qualified investors. It’s 100 percent shareholder-owned, and its sole purpose is to mine Bitcoin.”
Visit to bitcoin to Paypal
John went on to explain that the mine had been modeled on a forestry fund that operated on the principles of cooperative, collective ownership of assets. “You would raise money, and with that money, you would buy land and then plant trees. [You would then] grow the trees over thirty years…and after 30 years, mature-grown timber would be cut down and sold on the market, and then the land would be sold as well, which would turn cash.”
“At that point,” he continued, “the company would be shut down in an orderly way, and all the proceeds would be sent to the shareholders.”
John said that Bladetec is taking the forestry model and applying it to Bitcoin mining–” we are raising money. With that money, we are buying miners and electricity, and a little bit of administration…instead of a 30-year return, it’s a two-year return.”
“The minimum investment is £5000. We’re looking to raise between £3 [million] and £10 million…the larger the raise, the better the return, because the administration fees become smaller and smaller percentage-wise,” he said.
”We’re Trying to Bring Crypto Into the Light”
We asked John why Bladetec’s mines will be located in the UK while other areas of the world may have lower rates when it comes to the cost of electricity. John explained that in addition to having access to discounted electricity in the UK, the decision to establish Bladetec in Britain was made because “we’re trying to bring crypto into the light.”
“Having [the mine] be in another country is maybe something that’s one degree out of somebody’s comfort factor. The idea is that it’s a British company… it’s built, designed, and operated in Britain.” Shareholders can visit the mine as they please.
”The World is Going Crypto”
“What Bitcoin becomes will be based on the users that create it, and partly because of us–miners are quite involved in where Bitcoin goes. My point of view is that because of Bitcoin’s market share, it becomes the gold standard for cryptocurrencies… it might not be what you use to buy a cup of tea or a pint down at the pub. It will be [where you] store your savings, as it were…Bitcoin [will become] your bank account.