Juan Jose Pinto - Bitcoin Mining in South America

JohnPaul: [00:00:00] Hey everyone, welcome to the podcast. I’m your host JohnPaul and this is Digital Gold. Known to many as the Bitcoin Kid, I started my own cryptocurrency out of my parents’ basement back in 2013. The goal of this show is to simplify the crypto world and explore how it changes the way the world thinks about money through conversations with thought leaders [00:00:16] in this space.

[00:00:17] JohnPaul is the founder and CEO of Orm Capital Ventures. All opinions expressed by JP and podcast guests are solely their own and do not reflect the opinions of Orm Capital Ventures. This podcast is intended for informational purposes only and should not be relied upon for investment decisions.

JohnPaul: [00:00:42] Welcome to the show. Today I’d like to introduce Juan Jose Pinto from Dr. Miner, my guest who has over 10 years experience of leading diverse multinational projects focused on the energy, blockchain and construction industries. Juan, welcome to the show. How are you doing today? I’m Juan. Thanks for the invite. [00:00:59] I’m glad to have you on. Can you talk a little bit more about how you started Dr. Miner and why you decided to name it that? Yeah, it’s a funny story because that was the way I actually got introduced to Bitcoin. I started with Bitcoin through mining because I always worked with energy in the past. Before

JohnPaul: [00:01:17] I started with crypto, I was working with energy generation, gas turbines and stuff like that. I had a friend who’s now the co-founder of the company who showed me a little bit of talk to me about the miners. There was some machine making money. Everybody got introduced this way. To me, I didn’t buy it by the beginning. I thought it could be a scam or something [00:01:37] like that. He forced me to dig into it even though he didn’t know much about it because he knew I was involved with energy and he knew it had to do something with it. Then by the moment, I realized that the connection between energy and the technology and heart money because it’s basically transforming energy into heart money. It’s a way to transform

JohnPaul: [00:01:56] energy into wealth directly. I fall in love with the technology and that’s when we started together. We were three at the beginning. There was a third guy who at the end left the country and didn’t continue on the project. He was the one who actually named the project Dr. Miner because at the beginning, our idea was we started with one, two miners. Then because [00:02:17] of the situation in Venezuela was so bad and it’s still bad. But at that moment, I think it was the peak around 2016-2015. We wanted to sell miners. We started with ETH mining, with GPU mining. We were selling equipment to house owners. It was a mean for them to

Juan: [00:02:35] buy food on their table. The moment we started selling without any brand, then they started asking for help and they have many questions not only for the miners but for the technology. We said, okay, we’re the specialist here and we’re specialists who also operate the machine, the internal surgery to the machines. Then he came up with his name. He’s a marketing [00:02:57] guy and we liked it. We sit together in a table having a beer because we were friends since high school. Then the project started and then we started growing from there to right now. We have already built a row, more than 10 milliwatts in mining farms. We’re operating around 50 better hush right now. We have been a lot since that day and we’re happy

Juan: [00:03:18] about that. That’s huge. That progress that you mentioned every single day, coming into the mining facility, building it out, improving the process. I find it so interesting, Juan, that me and you started very similarly. I also started mining store with a GPU company focusing on helping individuals at their houses, going to their houses, setting up the rigs and had the same [00:03:37] problem. People wanted support. They wanted to ask, how do I fix this machine? That’s just, I believe, how this whole industry as the roots of it was that individual home miner. Now we are at the size where we’re scaling and facilities are building 10, 20, 30, 50 megawatts of power.

JohnPaul: [00:03:53] So how do you see miners growing in South America, either the big players or even yourself in your

Juan: [00:03:59] own company? It’s very interesting the question because we did have some discoveries recently about specifically Venezuela, which is one of the biggest mining countries in the region besides Paraguay, which is the second one, and Argentina. In terms of Venezuela specifically, I will say that even though industry have moved towards industrial operations, larger infrastructures, [00:04:21] there is still a huge amount of domestic miners in Venezuela because it’s a way for them to escape the economic situation. So through mining, they found a way to create money from the energy they have at their houses because of the subsidized prices. And I think that’s also happening in Iran, but that’s in specific places where energy is subsidized to the regular people they found a way

Juan: [00:04:45] to transform energy into money. And because it’s generalized in this way. But in my opinion, I think when you see the percentage of dominance of Chinese miners decreasing, the same is happening here with the domestic miners, even though there’s still a lot, it’s following the same trend worldwide. I think most of them are already looking for [00:05:05] hosting infrastructure, larger facilities for industrial miners to host their equipment. And we all know it’s not an easy task to run a miner inside a home, all the noise, the heat. But yeah, I see the industry growing into that direction. That’s why we’re growing that much. The industry has grown the same way that our company’s doctor miner has grown. We’ve been following the

Juan: [00:05:26] industry. We’ve moved from domestic mining towards industrial mining because cryptocurrency mining is becoming one of the basic industries of the world together with oil and gas, communications. This is the direction where I see the industry going. I definitely agree with you there on the fact that energy and wealth and the ability to have all of these Venezuelans run their machines and [00:05:47] their house to generate money. That’s a whole nother source of income. So what I’ve heard is that because the power prices are in dollars, US dollars, or there’s something to do with the US dollar exchange rate. And the fact that exchange rate keeps dropping, which then is making the power even cheaper, is that true? Or how does the subsidies work in Venezuela? And because it seems like a

Juan: [00:06:07] great way for these people to have an out of the current resume there in the current financial system, just in general. Absolutely. The reason why the prices are so low is because they’re fixed or local currency rate, which is falling by the day at 30% daily. It’s absolutely crazy. I will say it’s worthless. Our local currency isn’t being used already. We’re using dollars everywhere and [00:06:30] every shop there accepting dollars. Our local currency doesn’t exist anymore. And if it doesn’t exist and they’re charging you the electricity in Bolivars in that currency, basically you get free energy because at the end you don’t even need to pay. If you go to pay, it’s going to be like less than a penny for one mining farm, which is something that’s changing because now the

Juan: [00:06:50] energy supplier is come to an agreement with miners because it’s not sustainable for miners to mine at zero cost. There’s no free launch. There has to be a cost. But for domestic miners that are so small, they’re unrejectable for the energy supplier, they’re still getting this benefit of the subsidized energy that’s being in the country since 20 years ago. The reason is because of a [00:07:12] large and huge natural resources that we have here that are well known by the world. We have the number one oil reserves and number eight gas reserves. We also have one of the strongest rivers in the world. So we have the third hydro power dam, the third largest hydro power dam in the world running in the country. So we are a very resourceful country in terms of energy.

Juan: [00:07:36] So that’s the reason why it has been subsidized. There’s another story now that of course the infrastructure isn’t working properly and there’s a lot of maintenance to be done. And the reason is also because of the energy is cheap. Who wants to fix a gas turbine if it doesn’t generate its money if you’re just giving away the energy. But that’s what things are changing now here. [00:07:56] Now that we are, we miners are showing a new value for energy. The government is realizing that there’s a sector, there’s an industry that’s adding value or giving value in exchange of that energy. And we are trying to motivate the recovery of all the electric infrastructure here in the country through mine. No, that is huge. I want to touch on that farther about rejuvenating the

Juan: [00:08:17] electrical infrastructure in Venezuela. Before I talk on that, how has this devaluation of the currency affected either your day to day life or others day to day lives in Venezuela? Because I think people in the United States where most of our listeners are, they don’t necessarily have that problem and they don’t can’t really fathom what it looks like to lose 30% on the currency either in [00:08:37] a week or day or a month. Yeah, man, it’s really sad. I will say it’s really sad at the beginning. It’s crazy. You’re even laughing at the screen when you see the price changing by the day. Like you are 30% poorer than the day before. What do you do? You try to find alternatives and that’s basically why Bitcoin has been so popular here in Venezuela because we were forced to try it. There was no

Juan: [00:08:57] other way. Anything that they will offer you will accept it because you needed a way to escape from the inflation that was eating your money, eating your savings by the day. That’s one of the main reasons why government intervention over money is so catastrophic for the economy. I’m all towards libertarian economy. Venezuela is a great case for how extreme government control over money. [00:09:22] It’s catastrophic for the economy and it can really hurt the population. After all this crisis right now, there’s around 94% of the population is already living in poor conditions and I don’t see the situation improving. Maybe a little bit right now that we are already not officially, but we can say we’re dollarized. The only reason why we’re not dollarized is because

Juan: [00:09:47] of the problems between the US government and the Venezuelan government that are well known. I don’t know if that’s going to change with the new president there, but for now I can say we’re dollarized and that’s opening up the economy together with Bitcoin again and try to lift it up. It’s starting to lift up the consequences of all the inflation that we’re still years away to get [00:10:08] away from it. It’s a huge injury you will have for the rest of the years in the economy. And so I did read an article that USDC, which is Coinbase’s stablecoin, got approval from the US government because there are sanctions in place for US companies to give money, give USDC to people that were in the resume that the US government supports.

Juan: [00:10:33] Did you hear about that at all? And then if you didn’t, how is the Bitcoin conversation right now in Venezuela with the price hitting $19,000? Is this an active conversation where everyone’s talking about it? Or is it similar to the US how it’s not really having much of a conversation at all? I did hear about those news. I think it didn’t work out because people are already used to [00:10:51] it every day. Not everybody, not 100% of the Venezuelans are using Bitcoin every day. But I will say a larger amount. I will say there’s a huge discussion. There was a podcast actually that I was in like two weeks ago specifically talking about if Venezuela is already Bitcoin is or not. And there’s debate around it. But I will say between 10% which is huge, 10% to 15% of

Juan: [00:11:16] the population has already got involved with Bitcoin in a certain way. They already have savings in Bitcoin and they were using it every day for buying normal goods, basic goods, all the people that work with us in our company and our suppliers and everybody who is involved in the industry, in the mining industry that’s growing very fast here are already involved with Bitcoin. [00:11:35] I would say that this proposal that happened with the USDC on Binance didn’t really work out because we were already using it. There’s people using Binance to exchange Ether. There’s people saving Ether to exchange for Bolivars directly in the Binance platform so it’s already happening. That’s great to hear that there’s already progress being made in that

Juan: [00:11:55] this whole community of Venezuelans are starting to not only store their wealth in Bitcoin but are now using it on those day-to-day transactions which a lot of people say Bitcoin can’t be used on because it’s too volatile. But what we’re seeing is that it’s actually less volatile than some of these major state-backed currencies that Venezuelan, Bolivia are being one of them. You mentioned the [00:12:14] energy grid. And I also agree that Bitcoin miners can improve the energy grid. And here in Iowa in the United States, we’re at one of our facilities. We do something called demand response and what that is for people who don’t know. It’s where we turn off our mining facility when the price of power becomes very expensive on the grid. And it makes more sense for that energy company to

Juan: [00:12:34] sell the power back to the consumers or more appropriately to not have to go back and buy expensive power on the grid. It’s easier and cheaper for them just to tell us to turn off.

JohnPaul: [00:12:42] That allowed us to get a really low power price. So Juan, how do you see this interaction

Juan: [00:12:47] happening on a grid where it’s struggling? And it really needs this type of innovation that Bitcoin mining can bring? That’s a great tool that you use there. And I think that’s what mining is for. Mining is like a tool or a solution for the energy industry and for energy suppliers, for energy generators. We’re doing kind of the same. But the difference here is not that we’re [00:13:06] using the power that isn’t being used. But we are going to the places where there’s energy infrastructure and energy generation infrastructure that needs to be maintained, that it’s damaged in a way because of lack of maintenance. We show an incentive for the government to fix the turbine in exchange of energy generation of the mines. So we build mines near the gas turbines that need

Juan: [00:13:30] to be maintained. And with the money that’s made from the mine, we improve all the other turbines in the infrastructure, in the power generator. So to give you an example, there was a gas turbine infrastructure in one city in Venezuela that had in theory 80 milliwatts of capacity. And at the time we arrived there, that was like one year ago, it was running only at 10 milliwatts capacity [00:13:53] because there was four turbines of 20 milliwatts each. Three of them turbines were turned off. And one of the turbines that was running was running running at half capacity. So what we did was we asked the government to, or we asked the power generator to give us two milliwatts for us to build a two milliwatt farm. And with the money we were making from that two milliwatt farm, we were

Juan: [00:14:13] able to repair two of the turbines that were turned off beside the one that was running. And to do maintenance to the one that was running and lifted up to 20 milliwatts. So we went from 10 milliwatts, we transformed a gas turbine infrastructure that was running at 10 milliwatt to 60 milliwatt. And we were still running at two. So the government had 50 milliwatts plus of energy to distribute [00:14:37] to the country and to the population that was desperate asking for it because there’s huge blackouts of energy here. So we prove how mining can be a solution for the energy industry to start rebuilding itself. Specifically in places where energy isn’t being paid as the one that you’re saying in Iowa, that isn’t being paid that much. In Venezuela it’s been paid zero. So we are paying

Juan: [00:14:59] something and for them it’s an incentive to grow and to improve infrastructure they have there. And so these natural gas turbines, you’re not using stranded natural gas like flare mining like they’re trying to do in Texas. You’re physically going to the power company and saying these turbines are in this generation of facility. Let’s get them to work. Let’s get them making money. So what was [00:15:19] the problem before though? Because in the US when we generate power these turbines are selling to the grid and there’s a buyer. Was it just not enough buyers? Were they not consistent enough? Was the grid not good enough to get the power to the end customer? Do you know why they end up turning off? Because there are buyers but as I said the electricity is so cheap that buyers are

Juan: [00:15:36] paying zero. So there are buyers that are getting the energy for free. So at the end they are buyers. They’re just users. That’s the crazy thing that’s happening here. And that’s been going on for 20 years you said. So what is the government going to realize that the energy sector is the biggest sector for most countries in the world and it is for Venezuela as well. But how do you [00:15:53] support them if they have this subsidized rate? It’s crazy. It’s been subsidized for 20 years and in 2010 when they realized it wasn’t sustainable instead of changing the electricity rate they just built or installed around. We were running only on hydro on 15 gigawatt of hydro and then they installed 15 gigawatt of gas turbines all at like backup generation for every state in total in

Juan: [00:16:17] 15 gigawatts extra of gas turbine. So they run the next 10 years with this backup and now they collapse. So the only way and I’m not when I offer this solution for the energy sector I’m not trying to help the government. I’m trying to help the people because there’s people here that lives every day with 10 hours of blackout. They forget it’s bad. They don’t have access to internet. There’s [00:16:39] this huge crisis that’s happening here for the people. And I don’t think that it’s going to help the government to get out of the way or to live power. It’s just hurting people. The government doesn’t care if people it’s hard or not. So our idea is to try to fix the energy system to give energy to the people, to the people to have energy at their houses. No, you’re exactly right. Bitcoin

Juan: [00:16:58] mining is a tool for the individual, for the people who have access to any type of energy and who are willing to take the knowledge and the willingness to learn to free themselves of this repressive financial system. If you’re in Venezuela or multiple other states across the US in the world, that’s why I think mining at home is still going to be around. Even though we’re talking about the [00:17:19] institutionalization of mining and it growing, working hand in hand with these electric companies is important. And it’s how you rebuild the grid. I think it’s how you rebuild the grid in these countries, which eight hour blackouts, 10 hour blackouts, that’s horrible. That’s really bad for people. They can’t plan their life. They don’t know if they’re going to be able to charge their

Juan: [00:17:37] phone, do work. There’s a lot of issues there. So I’m glad to hear that you are making this a reality one showing that Bitcoin mining isn’t just an energy sucking mechanism. And it’s not bad. It just uses the stranded power around the world and provides a way to be valued. The worst thing in many is specifically in that area that I was sending you where we fixed, [00:17:57] we lift up like 50 milliwatts of energy through mining. We fixed 50 milliwatts of energy thanks to mining. Before that, the people in that specific area were thinking like we were going to destroy the grid. Like they were saying, there’s no energy for us. Now you’re going to come here and destroy and take the energy that’s available. Now you’re going to destroy the grid and it’s going to be worse.

Juan: [00:18:17] And after two, three months and we started lifting up the energy and they started receiving the energy they realized and they were like, I can’t believe it’s exactly the opposite of the idea that I had with this industry. I thought it was a sucking as you’re saying, it’s a sucking machine of energy. And at the end, it’s actually creating and executing wealth. It’s a tool for the industry. [00:18:35] I’m glad you were able to show that as a case study. And I hope we can get that message out to more people because it is so important. These energy companies, they have just an organ up in actually in Washington state. They said, no, no more energy, no more Bitcoin miners in Grant County, because we don’t want you taking our all of our hydropower. But they have massive data centers

Juan: [00:18:55] up there with Microsoft, Facebook, but in their eyes, Bitcoin mining doesn’t help anyone. It’s not worth it. But we’re seeing that complete opposite in Venezuela. And that’s that makes me really excited just just the future of this whole industry. Yeah, and it’s not even including. I didn’t even have to explain to them the importance of mining for Bitcoin and important of Bitcoin for the world. [00:19:14] I didn’t even need to explain this to them. And they already realized the value of the industry. Now imagine if you add all the impact that this industry and importantly that this industry has in the trust of this new financial system that’s overtaking the dollar and all the other fiat currencies. I think slowly people is going to realize it’s easier. It’s always easier to show

Juan: [00:19:35] it in places that needed like Venezuela, like Venezuelans got involved with Bitcoin like earlier than anywhere because we were forced to we didn’t have any choice. And same is happening with mining. And I think it’s going to happen with the rest of the world slowly, but it’s going to happen at the end. And I agree with you because Bitcoin mining is a hundred year game. It’s a game [00:19:53] that people were playing and using energy for the next 100 years. I don’t think many people realize that. Are you an investor looking for Bitcoin exposure? If so, Bitcoin mining provides daily payouts and lets you dollar cost average your way into a Bitcoin position.

[00:20:08] Orm Capital Ventures provides the bridge to the Bitcoin mining industry for institutional

Juan: [00:20:13] investors and energy companies through 24-7 management, directly line incentives, and over seven years of mining experience. Orm’s managed mining program is the most secure way to enter the mining industry. Reach out to us at ormcapitalvengers.com to learn more about the program and talk to the team. So Dr. Miner was created with this goal to help Venezuelans, to help people in South America [00:20:36] into mining, educate them, answer their questions. What are you working on the future and what are you excited about one coming up? Yeah, one month ago we launched the first Latin America mining pool in partnership with Luxor. It was an idea that we had since the beginning of this year because it has higher efficiency to connect to a closer server or closer stratum, you’re graphically

Juan: [00:20:56] talking. And also because I think the industry needs to be decentralized. Not only the Latin American region, the Latin American industry of mining needs to be independent from China. At the end, we should be following the philosophy of the technology, which is the centralization. We cannot concentrate all the power of the hashrate power into one country. Most miners were [00:21:18] located at the beginning in China because of the obsolescence of the mining equipment that miners were forced to mine at the places where the miners were fabricated or were manufactured. And that was in China. So that was most of miners were in China. But now that the technology has stabilized a little bit and equipment can last longer. For example, the S9s have been four years

Juan: [00:21:38] and we’re still running them like crazy here in Venezuela. Most of the S9s have come here. And now that this happened, miners have started to grow in areas far away from the manufacturing place like China. That’s why China is losing stake in the mining industry. But in terms of the pools, we’re still giving them too much power. And I think that’s not positive. Most of the reasons are [00:22:01] that they are offering lower fees that we don’t really know if they are true or not because nobody really checks if they are charging you 0.5%, 0.2% in the mining pools. So because of the idea that it was running in our heads in the beginning of the year, we decided to do a mining pool here in Latin America. Let’s give the example because we don’t want to be the only one. We want other

Juan: [00:22:22] pools to develop here. And I assure you, we’re in the future. The industry here, the local industry in Latin America keeps growing as it’s growing in Paraguay and Argentina. I think they’re going to be other pools launching to offer better services to compete with us. And the idea is that the idea behind all this is to help the centralization of the industry, which is at the end good for [00:22:42] Bitcoin and good for the users. And it’s better for everyone. And so I want to hit on a key component that you mentioned, the S9 miners. So for people that don’t know, these miners came out in 2016. They are 13 and a half terra hashes, which the new ones that are about 110 terra hashes. They run about 1,350 watts without any overclocking. That’s 100 watts per joules or per terra hash.

JohnPaul: [00:23:06] So can you explain why you’re able to still run them? So I think there’s a false premise that

Juan: [00:23:11] Bitcoin miners go obsolete very quickly. The hardware is only last a year or two. I would say that the cheaper the energy, the lower generation equipment you should be running, because it makes more economic sense. Because even if it’s true that the newer generation has better efficiency in terms of energy, it also has a very high price in terms of terra hash. [00:23:30] An S19 has 10 times more expensive than an S9 in terms of terra hash in the price per terra hash. So for us that the energy isn’t that expensive. The percentage in the operational cost of energy isn’t that high. It makes a better ROI to use older equipment by far. But I will recover the investment in six months or five months for larger infrastructure with S9s. And it can take me a year

Juan: [00:23:53] for S19s because it’s too expensive the equipment. Even though it consumes less energy for places with cheaper energy, it doesn’t make economic sense. We’re still hungry for S9s and there’s actually an outage of it. We’re just fine in China. There’s no more in the United States. There’s no more in Canada. We used to source them, but we’re still not interested in new generation [00:24:16] on last month because I know Bitman is stopping them manufacturing them because they want people to buy their new equipment so they can make more money. That’s the only reason I can think of because for us it’s more profitable to keep running S9s and E9s, lower generation equipment. It’s the price per terra hash. It’s all about it. Steve Barbour says that the

Juan: [00:24:36] end efficiency isn’t only about energy consumption. It’s also about how much money you spend. The more money you spend, the less efficient the investment is. Also, the less efficient is a project. You’re exactly right. That’s why we see the cost per terra hash being such an important metric to track when you’re getting into mining. One, here’s a question for you as you just hit on. [00:24:55] Do you think it’s more important to have a low cost power or to time the market and get in at a right the right time or a time where maybe that cost per terra hash to buy new equipment is lower?

JohnPaul: [00:25:06] What do you think is more important? For me, I will say low power because I’m used to it.

Juan: [00:25:10] If you have a low waste operational cost in the whole mining industry, you’re already winning because this is a mathematical game theory where as long as you have lower operational costs, you will always be competitive. You will always make money. That’s from the start. It’s more valuable to have lower energy. It’s also very important because there are people in Venezuela [00:25:30] who lost money with mining because they were buying S9s in 2018, in the beginning of 2018, and the end of 2017 when the market got absolutely crazy because of Bitcoin hitting 20k. There was people paying for an S9, around $6,000, $5,000. So I wouldn’t say it’s only energy. I think timing, the purchase of the equipment is extremely important and people have to be

Juan: [00:25:52] careful right now as we enter in the new bull market. I think prices are not going to be that attractive and I think people can follow into them just because Bitcoin is pumping. And at the end, when Bitcoin corrects, the mining will correct stronger than Bitcoin and they could lose money. So I think it’s extremely important to know when to buy the miners. So yeah, both things are [00:26:11] important. I definitely agree with you on that. An allocation of capital is super important.

JohnPaul: [00:26:16] So one, what advice would you give to any of the 18 year old Venezuelans out there that are

Juan: [00:26:21] listening to this podcast or that are interested in improving their life and improving the community? For the Venezuelans that are interested in mining specifically, I will say it’s true. It happens. Don’t do it only for the money. Even though it’s going to make you money, you have to believe in the technology. It’s going to be more profitable at the end, long term, if you will live in the [00:26:39] industry. If you think the distant energy actually, it’s going to thrive in the future, which I think believe me, this industry is growing. This isn’t just a game of guys playing with computers as I thought at the beginning. Most of the people that starts with this business thinks this is just a guy’s playing with computers. This is not this technology that in an industry that it’s protecting

Juan: [00:27:00] one of the largest technologies and discoveries in the world, like this is Bitcoin. So yeah, be careful with the timing. As I said, plan your operation and strategically

JohnPaul: [00:27:09] think long term and welcome to the team. Welcome to the team.

Juan: [00:27:15] Where can I listen to connect with you online? And where’s the best place to stay updated about Dr. Miner and new developments? Yeah, we normally we have a telegram group in Dr. Miner, Ad Dr. Miner in telegram. It’s an Spanish group for English speaking conversation. It can be on Twitter mainly, which is Ad Dr. Miner. And on Instagram, we also have a large community on [00:27:37] Instagram, which you see in some a lot. We post a lot of the information there, not selling services or stuff like that, just talking about the industries we’re doing here, about where we see the industry going and the new changes. And so that was that’s Ad Dr. Miner on Instagram, correct? Yeah. Awesome. I just followed you guys. So there you go. One more follower to the 3000 plus you guys have.

Juan: [00:27:56] Do you have any other questions or anything you want to talk about one before heading off today on the podcast? Actually questions about you, basically, about the two companies that you are running. I knew about mining, but I didn’t hear about autumn capital ventures. I read that was more about financial products related to mining. And I thought it was really interesting. Yeah,

[00:28:14] sure. I’m happy to touch on it. So, Orm Capital Ventures is the company that we created to interact

Juan: [00:28:20] with financial partners with larger institutional clients, with people who are looking to get exposure to Bitcoin mining and Bitcoin hashrate through financial vehicles and products. So, it’s our parent company, which means it now owns the mining store brand and the mining store website and it owns all of our operations. But it’s really the vehicle where we at Orm hope to bring in the [00:28:42] next wave of investors into the space and where we expect to change the energy and the financing world as we know it. Wow, man. I’ve heard about some tools similar to this one, but I don’t think they’re following the right path. What I read was very nice because you will get involved institutional money that’s coming from Bitcoin in next year. They will maybe be interested in

Juan: [00:29:04] mining also without getting involved with all the hustle of building the mining infrastructure and stuff. I don’t know if you have already have clients, you have already offered it, which kind of product specifically are you offering? I don’t know if that’s already going. We do have clients in the more traditional side where we mine with them and we actually joined [00:29:22] together and they’re able to mine cryptocurrency and we give them very good rates almost at our cost and we take a fee for our performance and for aligning those incentives, which is the most important thing as you’re seeing and making a profitable mining operation, even in Venezuela with the power producers. That’s really our main target now. But then as we move on, we are building

Juan: [00:29:42] out a retail product for retail investors on the mining store side. And then for institutional level investors, we’re looking at bonds, different types of ways to raise debt financing, different types of ways to ensure the product and ensure the mining profitability. I’m working on being able to provide insurance to the debt and to the interest payments for the mining operations, [00:30:02] which will make it so that you can really scale these facilities. Financing is just coming into the mining space today. And as you mentioned, the cost per teras is one of the key components of building a good operation. And so we’re working on how do you bring in the massive amounts of capital that are out there that have traditionally financed these large energy projects to finance

Juan: [00:30:20] 50 to 250 megawatt mining facilities all across the US where we have tons and tons of stranded energy. And it’s very linked with the energy industry and you’re connected directly with the energy suppliers. And one last question, and regarding also financial tools, but for the miners specifically, what’s your opinion about the hash refutures? They were released like one year ago, I think, [00:30:39] I don’t know if you have used them already. I’ve looked into them and I just can’t the different kind of quotes we’ve gotten from some of these brokers. We just I just couldn’t pull the trigger on it because the value that they were willing to pay for that hash wasn’t worth the discount. And they don’t pay you all the money upfront. So it’s okay, I’m going to get

Juan: [00:30:57] paid on a day to day basis. But the quotes weren’t good enough or weren’t enough for us to sell that hash right off or to commit to selling the hash right at a flat rate. But they were paying us all up front. And then we were we got that capital and we could buy new machines. That would be awesome. But if we’re only getting the capital as we mine it, then it’s okay, this is a great [00:31:14] way to lock in our profits. But there’s other ways to do that, which I think are more feasible with like hedges on the option contracts and ensuring you can lock in your Bitcoin price for those potentially newly mined bitcoins. So I’m not using them, but I think someone will build some products. And I think I know a lot of smaller groups are working on some amazing products. I

Juan: [00:31:33] love talking to their teams. If you’re looking to build hash rate products, reach out and I’d love to talk farther. But yeah, one, I still have not used it. What about you? I was working in a product actually that was very similar to hash rate futures. I don’t know if you heard about hash market. It’s sealed under development. The idea with hash market was almost [00:31:49] the same as a hash rate features. It was a it was a platform to connect buyers of hash rate or renters of hash rate and sellers. The sellers will be the miners, of course. And the idea was for sellers to secure their profit in dollars to same as the hash rate futures. And as you say, there can be other financial tools that can be used as an alternative like hedging with a

Juan: [00:32:08] Bitcoin price and stuff like that. But the idea was that miners could render equipment in the future and get the revenue of the miners at a fixed rate in terms of dollars so that miners could pay for the electricity on the operational cost that they have per month that are linked to the dollar and not to Bitcoin. So they can protect and gain the volatility of Bitcoin long term or at least [00:32:32] in two months or three months. If you’re, for example, if you’re thinking right now that Bitcoin is at $19 or 500 and you think the Abitun is going down, maybe next month is going to be at 14k. So I’m going to secure my profits for the next six months at this current production revenue that the machines are making. So you go to hash market and you sell it to somebody who

Juan: [00:32:51] thinks that Bitcoin is going to 30k. So they’re ready to buy the hash rate from you with a discount and at 19k because they think it’s going to be to 30k the production of the machine. So it’s the same as the hash refutors as you say and the markets will decide on this count. As you say, the hash refutors they decided this count. Here in the hash market, [00:33:09] the buyers and sellers will decide what the discount is, what the best discount is and it’s more like an open market. But still there’s this advantage that miners are going to be receiving the money before mining as you are demanding with the hash refutors. It’s the same. And there was going to be a contract and miners were going to be receiving by the time they were mining. It

Juan: [00:33:29] wasn’t enough from payment. Exactly. I think there was a lot to be said about how people can work on building these different financial products, just the mining process and how it works and how those funds are distributed and how the cost of new facilities and the cost of that capital. There’s a lot of key components to make a mining facility work. But I think for [00:33:49] being solved and I think the financial institutions are realizing there’s an opportunity in this space as you mentioned and it’s not going away. The more the industry mature, I think it’s going to be a time where they will be willing to pay upfront and trust the operation. It’s going to be more like a personal contract, a direct contract. It’s not easy to develop in a generalized way,

Juan: [00:34:06] like in a platform that I was talking about. It’s difficult for me to give you money upfront for the hash. Are you going to provide me? If later you can turn off the machine and then don’t return on the promise. Of course. And that’s one of the hardest things to do in this facility. And I think insurance and financing and all that will lead into making a better hash rate marketplace. [00:34:23] Juan, I wanted to thank you one last time for coming on the podcast Digital Gold. It was an amazing time to have you. And hopefully everyone who listened can get an understanding of how mining in Venezuela and South America is changing and how Bitcoin mining is here to stay and how it’s able to work with the electrical industries around the world. Thanks. Thanks, man. Thanks. Thanks

Juan: [00:34:40] for inviting us. Hi to everybody. Hello to everybody. I invite you to everybody.

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