the whole database can be swept to cover up the crime. Bitcoin has the inherent advantage of real-time, open transaction reporting and track- ing,andtherefore the ability to catchillicit activ- ities as theyhappen. As bitcoin is recorded in the public blockchain, not only can you see these transactions in real time, but the moment you try to cash out these transactions, you are sub- ject to the same know-your-customer rules that govern all current banking transactions. The other advantage of bitcoin over cash or

fiat money is the growing community of pub- licly available sources reporting stolen digital wallets as they get discovered. What this real- time reporting enables is the ability for financial institutions and law enforcement agencies to mine this data and catch criminals in the act. TheBitfuryCrystal Blockchainsoftware solution does just that: it helps banks and law enforce- ment agencies mine these publicly available records and risk score transactions. As bitcoin analytics solutions such as Crystal Blockchain become more accepted and vetted by banks and financial institutions around the globe, they will increasingly ease the fears and uncertainty associated with bitcoin, and will make it more acceptable and less of a criminalmyth for all. For years, world leaders have been debating

the virtues of balancing privacy with transpar- ency. Bitcoin blockchain technology is about to put an end to the debate. Bitcoinwas brilliantly designed to combine transparency and privacy.


: What does bitcoin’s rise mean for bit- coin miners, the value chain, and the

geographies trying to attract investment into mining operations?

: For miners, all of this means more busi- ness. This bull market creates a virtuous

cycle: as bitcoin rises in value, it attracts more investors, which in turn boost the mining net- works. As activities continue to grow, they attract larger institutions, which are increas- ingly looking into bitcoin and blockchain as new viable technology solutions, mining included. It is not that far-fetched that major institutions will start adding mining to their infrastructure as they get more engaged and entrenched withcryptocurrencies, blockchains and distributed ledgers and systems. Long-term, the mining infrastructure win-

ners will be those who have (1) the most effi- cient equipment, (2) access to low-cost energy, and (3) excellence and experience in mining datacentre operations. As amatter of fact, inno- vation in mining is starting to have a real impact on the green energy front: advanced mining solutions are giving rise to mobile min- ing datacentres, which capture trapped energy and redistribute it. Imagine if you could build or resurrect a hydro dam in a remote region, where high-voltage lines are not available. You can deploy these mobile mining datacentres to capture this energy and redistribute its output, giving rise to new regional developments, which are off limits for hard-to-reachregions or

February/March 2021



regions in developing countries. Bitcoin min- ing canbe deployed in sites with less than1MW of power, at the size of a shipping container, and the equipment could adapt its consump- tion to a variable power supply. Bitcoin mining equipment requires significantly less initial investment, less ongoing maintenance, and is simpler to deploy and operate, which makes it attractive even for small power plants. Bitcoin mining speeds up the adoption of

renewable energies too, in ways that previous technological innovations have not. The eco- nomic benefits this creates are incalculable, even before you consider the impending costs of climate change. Renewable energy is cheaper and abundant, and bitcoin mining companies like Bitfury are building datacentres in coun- tries that offer it, such as Norway. The more bit- coin mining increases, the more economic incentive there will be for energy producers to augment or even replace their grids with renewable energy sources.

discuss at this point. What we can point to is our energy grid-balancing operations in Alberta, Canada, which are reducing mining operations during peak energy consumption times to support the grid.


significantly around the world, including into new regions such as Canada and the Nordic region. China attracted a lot of mining opera- tions in the past as three of the four main min- ing equipment producers are Chinese compa- nies, withwide support of local capital and sup- pliers, so it was natural to place their mining infrastructure in China. Since then, the bitcoin mining industry has received significant Western institutional capital, which favours Western jurisdictions for assets allocation. Because of that, today we see a much more bal- anced distribution of mining operations across the globe, including fast growth of bitcoinmin- ing datacentres in the US and Canada.■


Valery Vavilov is founder and CEO of Bitfury. 49

: Is it an element of concern that a major- ity of bitcoin mining capacity is concen-

trated in China?

: Bitfury has increasingly diversified its mining operations and we have expanded

: Canyougive us anexample of any opera- tions that ‘captured trapped energy and

redistributed it’ or sped the adoption of renewable energies?

: Bitfury has two trapped energy projects under way, which we are not at liberty to

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