In this VIP insider series interview Fyygex got the exciting opportunity to talk with Kristaps Mors, the CEO of Power Mining who has first hand experience of actual Bitcoin mining. Story of the man who actually creates Bitcoins! Interested? Read on…
Fyggex: How did you get into Bitcoin?
I guess it started a couple of years ago, just as a speculation. I saw the bitcoin price going up and of course, was a bit interested. At that point, Bitcoin was around 300 to 400 euros. So I bought around 10 bitcoins or so, and then decided that I will just do some gambling and see what happens later and after a couple of years, the value of this initially small investment or speculation grew from 3k EUR to 150k EUR or so. After that, together with a partner, we decided that we want to get involved in this crypto and Bitcoin space a bit more. We wanted to do some Bitcoin mining and we bought a lot of Bitcoin ASIC miners, built crypto mining containers to host them. I guess that’s how me and my partner Janis started to get into this space.
Fyggex: You have a website where you write about things you do in your investments. Why did you decide to start with that?
Yes, I have a blog. It’s a hobby of mine where I write about different kinds of investments like P2P platforms and crypto and a bit about stocks as well. But mostly, the blog covers different kinds of P2P investing platforms – these investment platforms are mostly not regulated. There are different kinds of scams. And many of them are coming from Baltic states. Some of them have already shut down and it seemed interesting to write about them and review them. Then maybe help some other investors not to lose more money on these types of platforms.
Fyggex: Is this something you do in your free time because I saw on your LinkedIn that you are the CEO of Power Mining and MaxTraffic?
Yes, I am CEO of two companies so one is MaxTraffic, that’s a digital marketing automation platform. So, that’s the main project I’m working on, the other company Power Mining is related to crypto and Bitcoin mining. In this company we rebuild shipping containers to, basically, small data centers so you can place your basic Bitcoin ASIC miners in a container and connect to electricity and that’s it. It’s very easy to get started with them. We have got orders from Belgium, USA, Australia, Slovakia, France, and the latest order, we will now send it to Congo. So all over the world.
Fyggex: Do you think that the high price of bitcoin attracts or scares people off right now?
I think that’s quite easy – the media is starting to cover it much more and the retail investors are getting really interested about Bitcoin only when it really goes up, and goes up fast. The same was in 2017, when the price went from, I think it was about $1-2k per Bitcoin at the beginning of the year and in December it went up to $20k so at that point the situation was the same. When the price went super high you couldn’t order Bitcoin miners – everything was booked and you needed to wait half a year to get anything from China. But the interest was huge so if you had any Bitcoin miners, people were ready to pay a lot, and now we are seeing the same.
Fyggex: Why is Bitcoin your favorite?
Well, in my view, the only real property that makes or gives any value to crypto is decentralization, and I think Bitcoin is the only cryptocurrency that has this property. There is not one person or a company or one organization that can somehow influence it. You can also not really shut it down. You can make a payment to anyone. And no one can then freeze the money or return it. So basically if you send the money, the transaction will be done. In most of other cryptocurrencies, there are some kind of key persons or weak spots like they are either technically not really decentralized and you can shut down some kind of key component. Or let’s say if you look at the second biggest coin which is Ethereum, in that case, Vitalik is a huge authority, and one person can influence a lot on what will happen next. So if any government or someone would use some kind of tactics to make some pressure on this one person, basically they can influence what happens to Ethereum development.
Fyggex: How come you haven’t invested in any other cryptocurrencies, do you want to elaborate a little bit?
Over the years I’ve played around with different kinds of cryptos. My journey, like for many other crypto investors starts with Bitcoin. At first they buy some bitcoins and later read about all the other super interesting coins and how they will be the next revolution and have these amazing innovations, impressive teams and so on. So then they probably buy some other coins. But then after a while, when people get more educated, their focus comes back to Bitcoin, and typically all these new flashy coins turn out to have some kind of issues and cannot deliver on their promises. So my view is that the crypto space in general, is super risky and speculative. And if you kind of look at it from the investment side, then I think getting exposure to the best part of this whole asset class is not a bad idea. I don’t see how Bitcoin will disappear, but I wouldn’t be surprised if like 90% of everything else in time will disappear or become completely irrelevant. So doing lots of diversification doesn’t make any sense, at least to me. That’s if you don’t want to spend a ton of time and speculate.
Fyggex: What do you see is the biggest lack in Bitcoin?
I guess, for many people it’s the slowness. Maybe some people would like to see things happen faster, which from one side maybe is a bad thing but from the other side, it’s also important to really check any change that is done, and to be a bit careful. So that you don’t make any big problems later, which has happened to a lot of different coins, that there was some kind of technical problem and security issue or something else. So it depends how you look at it. I mean, it’s good for what it does.
Fyggex: What is your view of biggest threats to Bitcoin?
I guess some kind of regulation can be a threat. If we assume that countries want to implement some kind of AML and KYC policies and limit the way so you can transact between currencies and Bitcoin, that could become an issue. So right now, everything in crypto is kind of a wild west, like there are no rules, you can do whatever you want, you can buy bitcoin, exchange to other kinds of currencies, change it back and send it to anyone and so on. And then maybe a bit harder is to convert it back to dollar or euro. But it still can be done, but if later, let’s say the situation changes so that any exchange must ask you to provide lots of documents for any transaction that could probably slow that adoption of Bitcoin and other cryptocurrencies and make this whole process a bit more complicated.
Fyggex: What has been the most difficult for you personally with your Bitcoin journey?
Since I started, one of the key things when you buy bitcoin is about how you store it and not to lose it, which is not that easy to do. In the bank you can go and renew your password. If you lose your password or keys or access to the exchange or let’s say if your coins are stored in a crypto exchange and that exchange shuts down then you have lost everything. One of the first exchanges that I used was Bitcoin-24.de – it was based in Germany, and at that point it was the second biggest exchange in the world and the biggest one in Europe. And it was so badly built that someone did a DDoS attack on them, and overloaded their server and this exchange suddenly started to duplicate all the transactions that you did there. So if you let’s say, sold Bitcoin to the euro, then suddenly you got two transactions and you’ve got double the amount of euros, and the opposite. So, just by exchanging the crypto to the euro and back you could suddenly make in your account like that you have hundreds of bitcoins, and so on. So, the first people who noticed it, tried to cash everything out. For a while that worked and they emptied this exchange and then it was just shut down. And then later Mt. Gox was shut down as well. So these are the first two exchanges that I used and I think in both of them I’ve lost at least some part of my capital, that I had at that time. Then there was another one that I used which was called BTC-E. I didn’t lose anything in this exchange, but it was later shut down by the FBI as well because it was laundering stolen money from Mt. Gox. And over the years, the situation has improved a bit and we have exchanges right now like Coinbase, Kraken and Binance. So these seem to be somewhat stable. But still, you have to remember that anything can happen and you can not really rely on them and it’s not really a good idea to store crypto in them. But for new investors that’s still a big risk because there are still hundreds of smaller exchanges that once in a while, repeat the same thing. Either are too weak technically and get hacked, or do some kind of exit scam.
Fyggex: Apart from these like obvious scams, how do you see the risk of the Bitcoin investment for beginners?
I think, for beginners, the best way to get some kind of exposure is maybe buying it from apps like Revolut or something like that. If it’s a small amount. If you want to invest larger amounts then of course you have to educate yourself about storage and security and you have to take bigger responsibility on your own.
Fyggex: The world has more cryptos than traditional currencies. Why are new ones still created? And why don’t you think people stay with Bitcoin and Ethereum?
I guess the biggest motivation for those who create new cryptocurrencies is to just get rich fast, so it’s basically about doing some marketing. And if you are good at that and you can find people who want to buy your new cryptocurrency, it is just like printing money out of thin air so you don’t have to add any value. You just have to convince people that your currency will increase in price. That’ll make some people rich and that’s it. So completely unregulated space and it’s a way to take advantage of some investors who don’t really do much research or don’t care when they lose their money.
Fyggex: How do you see the future of Bitcoin? How do you think this community will develop during the coming years?
This year we’ve seen several companies who have decided that they want to buy bitcoin and place it on their balance sheets. MicroStrategy is the biggest example or most well known, but there are some other companies as well. A couple of days ago Elon Musk added Bitcoin in his Twitter account. That kind of increased attention to it and we will have more of these companies that manage a lot of assets and decide to get some exposure to Bitcoin. If countries start to invest in bitcoin, considering that they also have access to nuclear power plants or some huge resources of energy, that would be interesting to see.
Fyggex: How is it in Latvia and how is the local people’s view on Bitcoin and crypto overall?
I say it’s probably similar to everywhere else. There are people who think it’s just another scam, all the crypto currencies are just some kind of Ponzi schemes, scam and there’s no value at all it’s just burning energy. Then of course there are some optimists who think that Bitcoin will go to 1 million and they will be millionaires, and everything between these 2 categories. Probably the same as everywhere else.
Fyggex: Do you think that the government, the tax authority and the police of the economic crimes unit could stop trading Bitcoin for individuals?
I don’t think that. In Latvia, these institutions really don’t care about it. I saw on the news that there are a couple of Bitcoin ATMs that were removed because they didn’t have some kind of licenses. But in general, I don’t think that anyone is paying too much attention to what happens to crypto because it’s still not a big part of financial activity.
Fyggex: Do you think that could happen anywhere else in the world, that the government could stop trading currencies?
Sure, I mean, there are countries that try to add limitations. I think recently, there was some news that India will try to ban trading, using or buying crypto so we will see how it goes. But there have been that kind of announcements once in a while from one or another country. But in general, it’s not something that you can very easily limit.
Fyggex: Some people talk about Ethereum challenging the status of Bitcoin. What is your view on that?
I think that Ethereum is still like a playground, so they are always talking about some new stuff that they are going to develop or that will be developed in some kind of next future version. But there are a ton of issues and I think it’s in a much more experimental stage, than Bitcoin. So I don’t really see it as a threat to Bitcoin.
Fyggex: Thank you for sharing your views with our audience and community Kristarps, we look forward to stay in touch and wish you a successful journey ahead with your company. Your insights are very much appreciated, thank you.
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