CVA Podcast: Alejandro De La Torre, Poolin

Transcript

[Music] hello hello this is your host shiraz ahmed ready to kick off another bite size episode of the crypto valley association podcast a special thank you to seba bank for supporting this initiative as they pursue their mission to redefine finance for the new economy now let's discover together the growing trends of this fast-moving space and try to shed some light on the mysteries it contains today we're joined by alejandro de la torre vice president of poulin more than just the mining pool they have the vision of making the world a better place through decentralization and are on the mission to become a blotching all ecological comprehensive service

platform so let's dive straight in to the world of mining hello alejandro how are you doing today i'm doing well thanks travis thanks for the opportunity course my pleasure how about we start things off today by getting some insights on on where you first started in the blockchain world i started in 2013 so pretty early on i realized that bitcoin was here to stay and it was an important financial tool i until 13 there was not a lot of companies around so i decided to you know start a handful of them some of them were failures others were not uh one of them one of them was acquired by bitmain i uh it was m a so i joined the bin main team

in 2000 that was like around 2016. it was 7 2016-17 and in in bitmain i started btc.com alongside five other guys we grew bt.com to be the largest mining pool for two years in a row we also did a handful of other things like analytics apis a wallet and also mining operations i was there for three years the other guys who started pc.com three of them decided to you know branch off on their own and this that was pooling i joined the team six months after they started when i joined we started mining bitcoin and we grew pulling from zero half percent of the global bitcoin hash rate to be

around 15 of the global bitcoin hash rate in one year that second largest mining pool we also expanded into many other venues like avenues like mining operations and synthetic mining uh yes wow okay great i mean you mentioned hash rate would you just like to clarify just for our audience what hash rate is just very briefly of course so hash rate is basically the term that we use which basically means computing power of a mining equipment it's called hashtag because the com the the mining rig as it's called the computer and basically a mining rig is highly specialized computer that does one thing and that one thing is mine bitcoin but to mine bitcoin they have to

hash i'm not going to get too much into technicalities but it's called hashing so that's why we call it hash rate okay uh great great thank you thanks so much and and why don't you tell us more about what makes pooling more than just a mining pool of course well the the reason is because we have the mining farm operations and the synthetic mining we have a whole list of also financial tools available for our miners we were the first mining pool to provide interest bearing accounts also just all sorts of financial tools lending borrowing to our miners which you know traditionally mining in the past has been very difficult to to get money to to to to receive money to expand your

operations so we we decided you know to provide that option for our miners and not only is it that we're more of a mining pool than a mining pool because of our different avenues but also because we we really do push for professionalism for for for 24-hour support we have a whole list of things that we do very differently from other mining pools that has helped us you know propelled us to be the second largest mining pool in the world wow wow incredible great and we'll we'll get back more into that in a bit but you know i was just reading the headlines uh the other day and i just saw el salvador accepting bitcoin as the legal tender is now forever etched on the blockchain as

mining bull pooling adds as the headline to block 686 938 i mean that's a that's quite incredible tell me more about that sure so thank you yes we're we're very we're very happy very proud to be the pool to uh have done this essentially it's it's it's kind of very simple when someone finds a bitcoin block you're able to add like a small amount of words and and so we we we went ahead and added that headline to that small small area of the bitcoin block essentially making that you know like uh stay forever in the bitcoin blockchain and it was such an important historic

moment for bitcoin that it became a legal tender in one in a country a sovereign nation we were also lucky because we you know we never know which who's going to mind the block i mean we have a better chance than you know a lot of other pools because we're very large but we got we got the block and we added the the the text and again i'm very proud of that and so it's the whole team incredible lane maybe we just stay on that subject for for a few more minutes i mean you mentioned el salvador accepting legal tenders being i mean very very important for bitcoin would you like to just provide us a little bit more insight on why you believe it's it's game-changing potentially even for bitcoin sure so the

i mean it's bitcoin is as a currency is only 11 years old and there's been uh there's been challenge behind challenge along that way i've been around for almost seven years of its history so i've been able to see a lot of the challenges we faced and you know we've been ridiculed and kicked on on the curb and laughed at by everyone however you know slowly every year things pick up a bit more and more and more and you know bitcoin is a viable currency that that that is not you know it's not controlled by any centralized controlling bot in any centralized body at all it's a new form of currency and it represents it's it's a whole new

world basically i don't know what it's going to bring in the future i think i think it's going to bring a better type of economy in the future because you know if it's not controlled by anyone then there's no weird things going on in the background like in some other cases so the el salvador accepting it as a digital as sorry as a currency as a legal legal tender is a step in the direction that we've been trying to do for the last well for me for seven years but the bitcoin community and bitcoin has a whole 11 years so it was it was a really really really good moment wow yeah incredible i couldn't couldn't agree more with you and and i mean if if we go now deeper into the mining area which

which is your expertise and we were actually just discussing about you being so far away from where we've where we first met in in in amsterdam i mean you're in austin texas now i mean i'm sure our audience is curious to to hear why you're currently over there and you know that i'm alluding a little bit to the news currently popping out of china so so tell us sure so yeah i met you in amsterdam lovely amsterdam i was i've been you know i grew up in europe spain holland germany portugal was one of the countries i would bounce around if around in europe but yeah the uh recently as as i mentioned earlier we're a large mining farm operator and all of our operations are in china

but recently the the government bans basically bitcoin mining we thought we didn't think it was going to happen you know we as i said not only i have been around for seven years but the ceo and the cto of of poulin and the ceo have also been around for probably even longer than me around eight years so they've seen they've seen every every single year there's been china is going to ban bitcoin news every single year and every single year it turns out to be some very small change that you perhaps for example in 2017 everyone was freaking out because china was going to ban bitcoin but it was just that you know bitcoin miners had to basically create a company and tell the

local governments what they were doing so they were never there it wasn't it wasn't a ban but everyone freaked out so we thought it was just going to be another day another day and another another year of china banning bitcoin but it turns out it's not true but this time it turned out to be true so we've had to scramble literally when the news i mean we were following this very closely very closely um we probably you know heard about this before literally anyone else in the world i got the next morning i was on my way to the u.s to start shipping these miners to to north america not only us but canada perhaps mexico down the line because north america has especially the us has favorable you know it's number one it's a stable economy a

stable government you know it's not like the government's just you know the chinese government can say what they want and do what they want but in the united states things are a bit different just to put it lightly so yeah we were kind of tired of the whole this whole entire instability so we're we're looking for stability and we have to turn on these miners we have hundreds and hundreds of megawatts worth of equipment so that equates to a lot of money not being made so yeah i'm in austin texas right now i've been traveling around the whole entire us i've been to basically almost every every state that you never heard of in the united states i've been there um

it's funny because it's the most random states that are that are really trying to push mining like wyoming for example wyoming there's i think i think there's like a million people in the whole state the state is very very large very big state and there's only a million people just there's literally no one it's just it's just like bacon so so but but the local government wants to push bitcoin money because bitcoin mining brings in a lot of jobs and there's a lot of there's a lot of electricity being produced in wyoming that is otherwise not being used stranded gas there's all sorts of all sorts of different things of different electrical generation that is otherwise just being wasted so the local government is trying to push bitcoin mining to bring jobs to bring revenue into the state but austin

texas i mean sorry texas itself is also very very um interesting and attractive because the electricity prices the power is very very cheap here texas has his own power grid which is actually the only state in the whole country that has his own power grid so it doesn't share it doesn't share power grid at all with the federal government or the the rest of the united states so it has its own it's quite interesting it's called aircon and it's a free market electrical grid which is i think the only one in the whole world if i'm not mistaken so for us you know we're free market guys we're capitalists we're bitcoin miners are very very capitalistic and very much attuned to free markets and whatnot so we we really like it here and

the texans um have been working uh over the years to to make the local government here more favorable for bitcoin mining the texans understand that there is a abundance of electricity in texas that is otherwise being not being used or being generated in locations very far away from where they need to be which is then otherwise just wasted so they want to create they want to use that energy and create again jobs create revenue and create another industry in their and their state [Music] okay great i mean wow thanks a lot for that deep dive there i mean maybe just touch upon you mentioned

why the united states american a little bit why about some of uh some of these areas as well and i want to really get deeper into some of the the energy elements that you alluded to but before we do that i mean why why not some other areas uh that we've seen for example like kazakhstan and other places around the world i mean you mentioned stability but is it only that i mean what are your thoughts about other other countries or other regions well that's a good question we are indeed looking at other regions in the world latin america is somewhere that we're keeping an eye on el salvador of course it's something since it's legal tender there you know it's just a matter of that that would be very stable of course because since it's legal tender it's not a problem at all

however el salvador actually i saw those pretty interesting because i don't know if the listeners or you have heard of bitcoin mining on volcanoes it was kind of a uh sort of a popular topic on uh in the industry but it's not so absurd as it sounds because bitcoin what that basically means is basically means geothermal energy and bitcoin mining has been has been mined with geothermal energy since day one uh our good friends in iceland have been there's some very massive uh farms in iceland that use a hundred percent renewable and this in this time geothermal energy so it's not so far-fetched at all so we're looking at el salvador we're looking at paraguay that has the second largest dam in in in

the whole entire globe the typo dam which has very low energy usage again green energy we're looking at iceland of course iceland however has has a very established mining industry so it's a bit more difficult to enter i i suppose norway sweden kazakhstan now kazakhstan has is over capacity already however their government has been trying to kind of organize the mining industry in the country which i think maybe it's it's a good thing they just created attacks actually one of the first place in the whole world that has actually created attacks for mining yeah and uh it's very very low but the government even in in the official press

release they said it's a symbolic price and a first step which to me reads like they're going to be pushing the price up but anyway it's it's a it's a way it's a way for the local government or the government of the country to actually you know also get their beak wet um to make some money as well so i i still i don't know how i don't have a very good opinion yet on how that's going to look but we'll see so yeah we're looking at other other areas across the globe for us it's important that we um find places where it's more uh you know like like i said earlier iceland geothermal el salvador geothermal paraguay it's a hydro power

for us those type of arrangements of electrical usage is very very much favorable wow great i think thank you for those the detailed inside and uh yeah mining volcano i mean that sounds both adventurous and quite uh quite quite cool nothing but the the crypto industry to uh to do something is that's crazy but um it's a very interesting one right the the energy priority and you mentioned energy usage as well and from this topic i want to go a little bit into proof of work right i mean you have a lot of companies that are now developing on proof of uh steak all right and i just want to get your uh it's gonna be a little longer question but kind of like your ideas on proof-of-work the the

longevity of proof-of-work and maybe some of the eco-implications of proof-of-work that we've seen some major influencers to not to not name any kind of mention at all is bitcoin really eco-friendly look at how much energy it's using etc i mean yeah long-winded question but i think you've kind of got the point uh sure so it's quite it's quite fascinating i always i always think it's fascinating because bitcoin is basically the only technology that we have today that can actually be traced to the amount of energy that is being used you can't trace for example the amount of playstations that are being used or at one given time which is probably which is much more than the amount of electricity used by bitcoin

miners or financial institutions how much electricity and power they use you can't trace that but with bitcoin it's possible to trace it's actually a very i find it fascinating that that this system itself actually allows for tracking of the energy usage which is it's new it's a new thing which gives ignorant or misinformed parties you know like the uh the the kind of easy uh easy uh criticism in bitcoin now proof of work is by far the most secure system for a decentralized digital currency or digital blockchain because you have to recreate the amount of electrical usage

in order to change the transactions that have been added into the blockchain so let's just break it down if you want to change the transaction that happened 30 minutes ago that's three blocks because a block comes every 10 minutes you would have to recreate the amount of electrical power that was created that was used to create those three blocks so that's that's in very that's impossible unless like you know the us china and europe decide to put all their electrical or you know like it's very very it's basically impossible to recreate the electrical energy usage of bitcoin to change the transaction so

that's what makes it extremely secure now proof of stake is much much it's less security and much more centralized now the centralization aspect i would like to focus on because it basically recreates the whole entire financial system that we have now which is you know if you own a lot of capital you're able to buy a lot of proof of stake coins and you gain a a much higher advantage or you get more proof of stake rewards than the than the guy down the street that's just working uh you know a working class guy so it kind of does not change much of the of the system that we have today and the security aspect is much

less like i said the proof of work you need to recreate the electrical usage the proof of stake it requires just capital and capital as we all know i'm sure all the listeners here understand this very well too is more or less easy to come by you can get a lot of capital and you can buy a lot of this of this coin thus the security of a proof-of-stake coin relies on the on the under like it's it's this achilles heel that you you can't you you can you can gain a lot of power in that system if you have a lot of capital to put up front so bitcoin mining proof of work allows for

iterations of mining machines let's say someone comes with a better mining machine this group of people will be able to get more bitcoin so there's there's a level of there's always the option that someone's going to build a better machine or someone's going to build a better software or someone's going to find very cheap cheaper electrical prices which will then give that person an advantage and proof of stake there's no such thing the proof of stake is all about how much money you got and that's how much more you're gonna get yeah no i i i definitely see that i mean a lot of areas i'd like to actually touch on with regards to that maybe just go rather quickly i mean you mentioned if somebody were to uh build a better a

better machine they could mine then more more or bitcoin what do you think then about uh quantum computing and then the ability to potentially kind of break everything there's uh shah 256 kind of being able to to mine faster do you have any journey thoughts on that yeah yeah sure i get this question a lot actually it's quite simple really i don't know if you have heard or the listeners i've heard of taproo taproo is actually a bitcoin upgrade i helped lead the mining pools to basically lock in this software upgrade but just like tap root that's a software upgrade that's going to lock in that's locked in and it's going to upgrade in november just like we've done that as an industry we can actually upgrade bitcoin to a

algorithm that is quantum resistant so it's just a matter of really like the the whole entire people fail to understand that if quantum computing comes out the whole internet will be at risk it's not just bitcoin everything is going to be at risk everything everything banking email protocols everything is going to be at risk and everyone's going to have to upgrade to a algorithm that is quantum resistant so it it will change it will change the game for everyone but bitcoin has the the the possibility and the ability to upgrade so it's just a matter of upgrading it's not a big deal okay yeah very very interesting and we touched a little bit about the kind of volcanoes to do thermal energy i mean do

you want to speak about the eco implications of proof work just just a little bit for for our lessons yeah so uh like the majority of bitcoin mining right now i would say more than 50 is done in with green energy like i said earlier iceland has been mining bitcoin which iceland represents a pretty big chunk of the bitcoin mining uh hash rate global bitcoin mining hash rate has been geothermal most of the i'd say more than 50 around 60 70 percent of the mining that used to occur in china was hydro so if you if you take into account how much of the mining was done in china which was around sixty percent seventy percent of that sixty percent was hydro so you're i i don't know the math but that was a

pretty large percentage already that was green now and then you have already coming up paraguay north america has a lot of hydro a lot of geothermal and texas has a lot of stranded gas that is otherwise being flared or being uh used for other industries so so basically bitcoin mining comes and provides an avenue for flaring for stranded gas to and for for excess hydro excess green solar and wind uh for it to be used it actually impels or propels sorry impulse propels the green sustainable energy revolution because uh if you are a a solar power company

that's setting up a solar plant and you're what you do is sell to the grid what happens is that if the grid it doesn't need your energy you can then send that surplus energy to a bitcoin mining farm that the solar power company either owns or has a you know joint venture with another with miners and that will help them make the venture much more profitable now nowadays with bitcoin mining these green electrical startups or companies can have a different avenue of revenue generation through bitcoin mining so it actually makes it much more viable for someone to say okay i want to start up a bunch of

wind power and let's say 70 of that is being bought by the grade but let's say the grade doesn't need that 30 oh okay well we'll set up a mining farm and now that energy which would otherwise be wasted is now generating funds for my wind farm and now i have a better cash flow and i can expand even more mm-hmm mark and yeah can fuel the whole a whole new financial market i mean it's it's truly truly fascinating i mean thank thank you so much for those insights and i'm sure we could go much much deeper but unfortunately we are edging closer to to the end of this episode i wanted to leave you some time to get to give us your vision of the future of the

blockchain industry as a whole and maybe even uh that of the crypto markets sure so i think i think we're going to see as i said we're going to see bitcoin mining become a viable cash flow generation money generation for a lot of green um power plants uh we're going to see a distribution of decentralized mining with the china banning bitcoin it's now a sort of a new dawn for bitcoin mining because now all these machines are going to be going to all parts of the globe and we're going to see even stronger network and what i relate a stronger security network which comes from proof of work with a stronger value in the currency now don't don't you know this is my own opinion

but that's that's what i think and i think i think el salvador accepting bitcoin's legal tender is just one domino to fall i think uh central america is probably one of the most interesting places for for bitcoin because uh central america is you know not necessarily the most richest area of the world and they've been you know their currencies are not that strong now they tap into a decentralized currency like bitcoin which is what el salvador did it could present to whole entire new way of of economy maybe you know let's say guatemala or honduras starts accepting bitcoin too then the three countries could you know trade with each other in a currency that

is arguably stronger than their fiat currency and this will also create less volatility for bitcoin as you know bitcoin volatility has been always on going on a downtrend every single year voluntarily is less and less in bitcoin um i'll be at some crazy black swan events like you know trying to abandon bitcoin for real but i think i think it's going to be i think bitcoin is here to stay and um it's going to be a great future we'll see wow well that's a great note to finish on and then thank you so much alejandro for for joining us to today thank you sharas and uh make sure to like and subscribe awesome thank you so much and uh if you enjoyed this conversation feel free to check out more on our website

cryptovalley.swiss where we host plenty of events educational material and even provide information on how you can join our growing community thanks again alejandro for joining us thank you thank you for the opportunity wonderful our pleasure stay tuned stay safe and until next time from the crypto valley in switzerland bye [Music]