Since being introduced by Satoshi Nakamoto in 2008, Bitcoin has swiftly evolved to transform the way we imagine global currency in a digital world. Developed by programmers and released as open-source software in 2009, Bitcoin is credited as the first decentralized digital currency, commonly referred to as cryptocurrency, serving as an alternative peer-to-peer payment system.
Deviating from traditional payment methods, transactions are direct between users, without the need for third-party systems, such as physical dollars, coins or credit cards. Additionally, bitcoins can be exchanged for other forms of currency, products or services.
Bitcoin transactions are verified by a network of nodes, then recorded in a publicly distributed ledger known as a “blockchain”, which authenticates bitcoins as monetary units of measurement – or money. Bitcoin mining refers to bitcoins created as a reward in which users verify and record transactions in the blockchain. Users who mine successfully receive fees per transaction in the form of new bitcoins.
In 2015, the total number of merchants accepting bitcoins as currency surpassed 100,000 -- with users being charged less than 2% per transaction, as opposed to the 2-3% processing fee assessed by credit card companies. Even with the impressive strides made, the Bitcoin space has a lot of room to grow.
Much like Gold, bitcoins can be used to store value, minus being a tangible form of currency. Yet, Bitcoin currently has a market cap of around $12.5 billion, while the market cap of gold is $7 trillion. Noticing the potential of the emerging marketplace, one young entrepreneur stepped away from a promising career path to focus on building a bitcoin empire.
Founded in 2013 by 27-year-old Marco Streng, Genesis Mining stands as the largest bitcoin cloud mining company in the world. Boasting more than 300,000 daily customers, the startup has grown to become a global power that employs over 100 full-time staffers from all parts of the world.
Prior to developing the idea for Genesis Mining, Streng was on pace to become a mathematician, dropping out of college amidst his training to pursue his business idea full-time. Strong would eventually team up with two unlikely entrepreneurs and began incubating a concept that would eventually reshape how today’s digital generation makes purchases and accumulates wealth.
"In 5-10 years, Bitcoin, or one of the other cryptocurrencies, will be well established and accepted as a currency." - Marco Streng
Boot-strapping from the start, as the growth of the company began to accelerate, venture capitalists began expressing interest in funding the startup, but the founding team decided against taking outside investment. Instead, the team turned to using profits to fuel growth, which is a very uncommon tactic for hyper-growth startups.
In March, the Genesis team adjusted their strategy by launching Logos Fund, an investment fund catering to top-tier venture capitalists. To date, the fund has raised a reported $100 million in assets. which went on to raise a reported $100 million in assets under management. Now, Genesis Mining is respected as one of the few companies within the Bitcoin industry that has created a highly profitable and sustainable business model.
I spoke with Marco Streng about the vision behind his company, battling the skepticisms surrounding the changing industry, and his ambitious plan for reshaping global currency.
What specific void or opportunity did you discover that inspired the idea to launch Genesis Mining?
Marco Streng: We found that there was a lack of trustworthy mining companies in the altcoin market. Not enough providers were enabling users to mine the coins they were most interested in. After establishing our brand and a reputation as a reliable and trustworthy mining company, we also entered into the Bitcoin mining space.
With the space developing so rapidly -- What have been the biggest challenges or surprises you’ve experience while building your business?
Marco Streng: The cryptocurrency world as a whole moves at an incredible speed. Almost on a daily basis, something in the market changes, and we have to adapt our strategy and business accordingly. If you are not smart and fast in the cryptocurrency world -- you are out.
Each co-founder comes from a very interesting background — How did the three of you come together and what does each member bring to the table the gives the company an edge in the space?
Marco Streng: Two of us have a background in mathematics and physics; one already had experience in running a company. Also, everyone brought in good and valuable contacts, such as our entire legal team. The vibe between us is very good, and 99% of the time we quickly reach consensus about how to go forward. We all also share the same goal: making this world a better place by spreading the idea of cryptocurrencies.
How do you see the Bitcoin industry evolving in the next 5-10 years and where does General Mining fit into your vision of the future?
Marco Streng: It is hard to forecast what is going to happen in the next five days in crypto-land. In 5-10 years, Bitcoin, or one of the other cryptocurrencies, will be well established and accepted as a currency. Smart contracts and second layer technologies like lightning will play an important role in some parts of the financial industry. Mining and proof-of-work will probably still be used for some major cryptocurrencies such as Bitcoin, but the industry will be more settled and the product cycles will be much longer. Cloud computing is still in the the early stages of its development, and due to its enormous computational power, we will probably be able provide services beyond mining.
Describe the potential in the Bitcoin space and how you believe people should be looking at the industry?
Marco Streng: Bitcoin has the potential to become the most important non-government form of money, or even the one and only form of money. In other words: if Bitcoin succeeds in becoming a good store of value the Bitcoin price can easily go up by a factor of 500. This would just take into account being used only as store-of-value. However, Bitcoin is so much more: with second layer technologies it could facilitate very fast and cheap payments all over the world. Projects like Rootstock would allow Bitcoins to be used in smart contracts and so on. So the potential is enormous, which is why Bitcoiners often encourageone another with the phrase "to-the-moon!”
Bitcoin is understood as a form of currency for the future — But what other functions does Bitcoin serve and what added value does the industry add to the new economy?
Marco Streng: Bitcoins are durable, divisible, easy to transfer and Bitcoin is a scarce commodity. Because it is easy to divide, simple and cheap to transfer and almost impossible to counterfeit one could argue that Bitcoin are a better store of value than gold. Global micropayments - with 2nd layer technologies like Lightning, it would be possible to transfer even the smallest amounts from one person to the other in almost no time and at almost no cost. Bitcoin could then be used for micropayments of any sort around the world. Complex contracts can be written and their execution can be guaranteed on a blockchain (called rootstock); Bitcoin would be the currency used for such smartcontracts.
How do you see the growth of the Bitcoin industry shaping the global economy and impacting politics, social enterprising, e-commerce, etc. ?
Marco Streng: The world is getting smaller every day. Traveling by airplane became relatively cheap, and technologies like the internet, email and skype allow people from distant places to work together. For example, programmers in San Francisco and Armenia can work together without ever meeting. But, how do they get paid? With the legacy of the financial system, it takes a long time to make wires, and they are expensive too. How is it possible to tip someone who created great content? Bitcoin and other cryptocurrencies will allow all of that. Not only will we be able to easily move around the world and share information, but we will also be able to transfer value between each other quickly and almost no cost. This will allow us to create many new solutions for consumers. Crowdfunding of projects becomes a lot easier, workers that work abroad to earn money for their families can be paid without delay.
Smartcontracts will replace expensive third parties and will make businesses between entities easier and safer. But these are just the simple obvious low-hanging fruits. The interesting question is what people will come up with going forward. The technology is young. It's reminiscent of the early days of the internet where no one had youtube, wikipedia and online universities in mind. You could speculate about the future but no one new exactly what shape the tech would take.
You travel at least 30 weeks per year all around the world to expand the business — Describe what your hustle is like and how you balance the different demands of the job?
Marco Streng: We have teams all around the world working to innovate and improve our services, so one of my chief goals as we travel is to make sure those teams are empowered to stay innovative and delivering top of industry services for our customers. I also believe strongly in the fact that the success of Cryptocurrency and fintech rely on community support and innovation. That's why all of our leadership regularly attends and speaks at industry conferences to help imagine the future with other leaders in these efforts.
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