Q1 2021 PermianChain Outlook with Mohamed El-Masri, Founder & CEO
19 January 2021
What stage has PermianChain reached?
PermianChain is built around four blocks that perform different functions and support the different user groups we are aiming to support. These foundation blocks are: PermianChain Investor, PermianChain Dealer, PermianChain Supplier and PermianChain Miner. As we come into 2021, all four blocks are around 99% complete and our target is to have them ready for full commercial launch befoe the end of the first quarter of 2021.
Importantly, all four blocks will have an existing book of business available as soon as they go live because our private beta testing phase attracted a healthy and active userbase that has served as our proof-of-concept before commercializing the four diffrent blocks.
, which includes PermianChain Dealer as a back-office administrative function, is in the process of being licensed to Canada-based exempt market dealer Windermere Capital
. Windermere Capital will be onboarding Brox Equity as the first issuer of digital security on the PermianChain Investor. As a result, Windermere can now allow direct investments in natural resources projects from eligible accredited investors under available prospectus exemptions, keeping costs low by managing both investment and reward so that there is minimal requirement for back-office services [A press release can be found here
In the case of PermianChain Supplier
, more than 700 million cubic feet (MMcf) of natural gas is already in the process of being registered on the PermianChain blockchain for tokenization. This process is taking place under a Smart Offtake Agreement (SOTA) model that is utilizing the Digital Energy Currency (DEC)
that we have developed for buying and selling of energy reserves. This means that exploration and production companies will have access to an untapped market for an auxiliary source of revenue allowing peer-to-peer (P2P) energy trading.
, meanwhile, already has more than 37,000 terahash of computing power ready to be directed to the platform, and our supply of Whatsminer M31S mining rigs is sold out until June 2021. Using PermianChain Miner, crypto-miners of all sizes will be able to earn bitcoin through full or fractional ownership of one of our mining rigs. PermianChain Miner allows crypto-miners to manage their power purchases and choose their own co-location on power sites that are registered by users of PermianChain Supplier. The platform will also allow crypto-miners to choose their own mining pool as we integrated APIs from Binance Pool, SlushPool and other reputable mining pools. PermianChain Miner is providing the freedom of choice to crypto-miners, allowing them to manage their daily power consumption, co-location choices and unlocking access to additional sources of liquidity.
In short, after three years of patient development, we are ready to start delivering on our potential. We are really looking forward to helping the oil and gas sector evolve, creating a new way for market dealers and their investors to take part in natural gas and crypto-mining projects while delivering cheap, consistent power for the crypto-sector which could have a positive impact on the communities where such projects are located.
What has the feedback been like from oil and gas projects?
We have received very positive feedback from oil and gas companies globally. From the Middle East to North America, we have public and private sector prospects that are looking to adopt our tokenization solutions and implement SOTAs using DEC smart contracts. Our initial focus is on the Canadian market, more precisely in the Province of Alberta, due to its rich natural gas reserves. We see a major natural gas market challenge that needs to be addressed in Alberta. Our success in Canada will create the template for our future global expansion plans. There is also considerable focus in the province on bringing down CO2 emissions generated by the oil and gas projects. Regulators are increasingly enforcing measures designed to stop flaring and trapped gas release, deploying technology such as drones to test the air around active projects even in remote locations. Because of PermainChain's partnerhsip with companies such as Brox Energy, we offer a way for oil and gas projects to cost-efficiently harness gas that would otherwise be wasted, there is a significant appetite for what we can deliver through the tokenization of resources to create value in resource finance and sustainability. I elaborated more on this in our case study titled; Oil, Natural Gas and Blockchain
which was published by the Blockchain Research Institute (BRI)
to their corporate members and introduced by Don Tapscott, Chairman at BRI.
What is Bitcoin mining?
Without getting too far into the nitty gritty, bitcoin rewards are generated by running application specific integrated circuits (ASICs) that find blocks on the Bitcoin network to solve equations known as hashes, which are then allocated to the ASICs that contributed to solving the equation. The solved block which includes the hash function is then stored on the bitcoin blockchain which is global, transparent and immutable. Bitcoin rewards are paid out directly to the digital wallets that are associated to the mining pool accounts that the ASICs’ hash power is directed to. Once bitcoin pay-outs are issued, they are available to be traded by the owner. The blockchain creates a permanent record of ownership as it changes, ensuring complete market transparency.
When bitcoin emerged in 2008, the hashes were simple enough to be solved with a home computer, but the system was designed to make the hashes more complex as demand has risen, so more computing power and more electric power is needed to solve them more quickly. As we head into 2021, bitcoin miners need an advanced, and relatively expensive, set-up in order to be quick enough to solve a hash before anyone else.
What role does PermianChain play in the bitcoin mining process?
PermianChain Miner offers the opportunity for people to take part in a mining project using some of the fastest hardware available on the market. Additionally, bitcoin miners that already own ASICs can access low-cost natural gas power generation via our digital energy marketplace from users of PermianChain Supplier. This enables bitcoin miners to manage operational expenses efficiently and remain competitive as the demand for bitcoin energy continues to rise.
In short, mining offers a way of generating bitcoin and PermianChain makes it possible for virtually everyone to participate in the mining process cost-efficiently.
What are the benefits of getting involved in bitcoin mining as opposed to bitcoin trading?
There are very few credible rules of investment that apply in every situation and across every sector, but there are two rules that I always come back to. Firstly, I only invest what I can afford to lose. Secondly, I always spread my risk so that my exposure is limited if one sector hits the buffers.
Bitcoin surged ahead at the end of 2020, and has recently reached and sustained historic highs. This makes it a really interesting space to be involved in, but it’s also currently very expensive to get involved. What would have cost you US$5,000 in March 2020 will cost you over US$35,000 in January 2021 [You can see today’s price here
Bitcoin mining offers a way of earning bitcoin or portions of bitcoin without trading fees and without the direct exposure to the price volatility, though miners are exposed, but regardless of what happens to the price of bitcoin, a miner will continue to generate more bitcoin, hence increasing their bitcoin holdings daily. They can still decide to then trade their bitcoin on cryptocurrency exchanged or they can hold onto (HODL) their supply as a store of wealth in what we call a programmable savings account. As a result, this mining process is growing in prominence across the public and private institutions.
Also, if you calculate how much it would cost you to buy one bitcoin today versus using that same amount to purchase your own ASICs for mining bitcoin you can see a significant opportunity on the long-term. You can identify how much bitcoin you can generate when mining under a specific budget by using our bitcoin mining calculator. [Click here
to access the calculator].
Has the rise of bitcoin prices during the second half of 2020 led to more interest in PermianChain’s bitcoin mining offering?
There has certainly been a surge in interest in what we are doing as the market has become more bullish, but also as we have gotten closer to full launch of our foundation blocks. For example we’ve seen a 270% increase in customers for our Crypto Mining Management
We’ve designed PermianChain to work from various perspectives, and this has fitted the unusual times that we’ve hit over the last twelve months.
From the crypto perspective, we are making it simple for participants of all sizes to contribute to the fast-rising bitcoin sector through mining, offering full and fractional ownership of the necessary hardware with rewards allocated directly into wallets. We also offer the opportunity for customers to bring us their own rigs for us to manage at our remote partner sites which are distributed across Alberta, Canada. We are currently partnered with the Brox group of companies for this matter
. As operating partner, Brox powers our bitcoin mining operations with natural gas that would have been wasted. Utilizing the DEC smart contract we are creating a new revenue stream for oil and gas projects and helping them enhance their environmental credentials at a time when the sector is under increasing scrutiny. 2020’s unique circumstances meant that many natural gas projects are very receptive to opportunities.
Finally, exempt market dealers and financial advisors can use PermianChain to offer their clients and investors a relatively low-cost opportunity to participate in the new energy era that is entering the complicated and fast-growing crypto sector. Related to this, our digital solutions is an opportunity for the oil and gas sector to access untapped capital sources from the cryptocurrency market
which currently has a market cap of around US $1.0 trillion.
The rise in prices during 2020 has renewed interest in the crypto sector, but there was already a healthy demand for what we are creating from the oil and gas, crypto and financial sectors.
PermianChain is a proprietary technology platform that brings together the crypto-mining and oil and gas sectors. Using a permissioned access blockchain, PermianChain makes it possible to utilise stranded and wasted energy resources, unlocking liquidity and transforming the way that oil and gas projects are funded, produced, bought and sold. Established in 2018, PermianChain Technologies is a pioneer member of the Blockchain Research Institute (BRI) and start-up member of the Petroleum Technology Alliance Canada (PTAC).