bitcoin mining myths

1. Alex Petrov / about mining myths

2. Bitcoin is too volatile to be a store of value
Digital Currencies Are Primarily Used for Illicit Activity
Alex Petrov twitter @sysmannet @AIBC Malta conference
Bitcoin is a bubble ?
Myths about mining…. about bitcoin…
Bitcoin has no real-world uses
Bitcoin doesn’t have real value
Bitcoin is bad for the environment
Bitcoin generating a lot of CO2
https://www.coinbase.com/learn/crypto-basics/7-biggest-bitcoin-myths
https://www.investopedia.com/tech/top-bitcoin-myths/
Bitcoin at risk of Quantum Computer
Mining is not profitable
mining on cpu
https://fortune.com/2021/03/17/bitcoin-myths-bubble-miners-energy-waste-stablecoin/

3. Story of Horseless … cars
in 1899, Smith announced his vehicle, the Horsey Horseless.
According to his patent, it was a “new and original design for a vehicle body, and it has for its object to provide a design of this character that shall be both useful
and ornamental, to make it more comfortable for passengers”
If a car looks like a horse, actual horses won’t be scared of it.
More simply, it was a car with a big wooden horse head stuck on the front of it.
Smith said, “and before he could discover his error and see that he had been fooled, the strange carriage would have passed, and it would then be too late to
grow frantic and fractious.”
Problem solved.
Added bonus: The hollow equine bust doubled as a fuel tank.

4. History / Fear of Electrcity
• Fear of something new
• Fear of less understadable
• Fear of changes

5. - no even close 1:1 analogies
- new features, new rules
- new pros, cons.
- whale oil / oil
- cars / hourseless
- steam machines / hourses
- railroads
- electricity
… etc
Alex Petrov twitter @sysmannet @AIBC Malta conference

6. Converting Physical Assets
▪ Lower cost of storage & higher capasity
▪ Lower cost transfer … 10Kg paper vs 10 emails
▪ Increase 100x speed of transfer
▪ Simplicity of handling, processing + new features
▪ Easy - Processing, Search & Statistics
▪ Cost of production, emission
▪ Real-time & feed-back
NEW FEATURES wider usage, higher efficiency, higher value
NEW FEATURES New possibilities, new pros & cons
No analogies 1:1 in properties, it’s new sets fo pros/cons, features + new possibilities + new risks
Alex Petrov twitter @sysmannet @AIBC Malta conference
to electronical form …
- 150-200kg paper per year bank footprint / by statista data
- 30 million kg of PVC is used for banking card manufacturing yearly

7. Physical economy, crypto economy
Crypto Currencies with another world, there old analogies and some old
definition are not working
Market-cap Price * Amount is not working perfectly
BITCOIN MARKETCAP?
▪ Cost of infrastructure
▪ Use cases, efficiency, benefits & their cost
▪ Side effects & advanced feattures
▪ All businesses + investments
▪ Amount of users.
▪ Developers community
▪ Count of transactions & their nature
Alex Petrov twitter @sysmannet @AIBC Malta conference

8. Cost of Physical Assets, Manufacturing, Store
How much energy does it take (on average) to produce 1 kilogram of the
following materials?
Paper (from standing timber): 25-50MJ (6,950 to 13,900 watt-hours) / 700L of pure-water/1kg
Wood (from standing timber): 3-7MJ (830 to 1,950 watt-hours).
Steel (from recycled steel): 6-15MJ (1,665 to 4,170 watt-hours).
Aluminum (from 100 % recycled aluminum): 11.35-17MJ (3,150 to 4,750 watt-hours)
Iron (from iron ore): 20-25MJ (5,550 to 6,950 watt-hours)
Glass (from sand, etcetera): 18-35MJ (5,000 to 9,700 watt-hours)
Steel (from iron): 20-50MJ (5,550 to 13,900 watt-hours)
Plastics (from crude oil): 62-108MJ (17,200 to 31,950 watt-hours)
Copper (from sulfide ore): 60-125MJ (16,600 to 34,700 watt-hours)
Aluminum 219 MJ (60,800 watt-hours) / most re-use
Paper scanning 1000 pages 200-700$,
Paper documentation storage 1000 – ~150-250$/year
Bank per cusomter ~150(EU) ~200kg(US) of paper / year / by statista
Alex Petrov twitter @sysmannet @AIBC Malta conference

9. What is result of efficiency ?
▪ Manual work
▪ Low speed
▪ Low efficiency
▪ In-accuracy
▪ Damages
▪ Laser engraving
▪ High Efficiency
▪ High Speed
▪ High Accuracy
▪ No Damages
New features
▪ Drawing
▪ 3D
▪ Cutting
Alex Petrov twitter @sysmannet @AIBC Malta conference

10. What is result of efficiency ?
1914 Ford innovation: assembly line
• Increase workers efficiency
• 1000 cars per day
Ford model T 3000 parts in 84 distinct steps assembly, from 12 hours
per car to 90 minutes per car, price from 850$ to 360$.
The gains in productivity allowed Ford to increase worker pay from
$1.50 per day to $5.00 per day once employees reached three years of
service on the assembly line. Ford continued on to reduce the hourly
work week while continuously lowering the Model T price.
Innovation – Robots & Automatisation… Efficiency evolution again…
▪ Accuracy of work.
▪ Quality of product.
▪ Cost of production.
Now 1700-2400 cars per day… fuf …is it only 170-240% of speed…
looks almost the same… but modern car consist from 15-25k parts.
K-Waves, economy cycles, grow driven by innovations
Alex Petrov twitter @sysmannet @AIBC Malta conference

11. Power consumption vs Efficiency
Question1: Consumption ? Question2: Name the most efficient ?
Scooter 125 - 1.58L/100Km
Ford Fiesta - 7.5L/100Km
Heavy Truck 35 - 35-40L/100Km
max load 150kg / own 103kg
~max load 550+Kg
(impacting breaking)
own weight 1234 kg
25 000kg
own weight 10350 kg
35.000kg/ 200 ~ 175
276L/100Km
25.000kg/ 303 ~ 82
182L/100Km
35.000kg/ 550 ~ 63 cars
477L/100Km
35.000kg/ 1784 ~ 14 cars
147L/100Km
35-40L/100Km
Q3: move 35 000 kg per 100km
Alex Petrov / about mining myths / AIBC 2021 - twitter.com/sysmannet

12. Power consumption vs Efficiency
Question1: Consumption ? Question2: Name the most efficient ?
4L/gallon per 1 second
Heavy Train - 600L/100Km
Heavy Truck 35 - 35-40L/100Km
440 tons
12l/100km
Boing MAX-7 till 5 L/100km
12 500 - 50 000 tons
25 000kg
own weight 10350 kg
Alex Petrov / about mining myths / AIBC 2021 - twitter.com/sysmannet

13. Golden Engineering triangle
Alex Petrov / about mining myths / AIBC 2021 - twitter.com/sysmannet
https://twitter.com/sysmannet/status/1204282422344503296
https://fastgood.cheap
Some rules throughout the universe work the same universal way,
equally applicable for machine engineering, or building IT systems or even blockchains...

14. Little bit of History:
* CPU 1955/ 1970 intel 4004
* GPU Graphics processors 1994
initially was designed for graphics,
but became universal parallel processing unit
* ASIC’s invented in 1967
allow us to use satellites/WiFi/GPS/ 3G/5G/LTE,
allow to make personal computers wide market,
allow to make mobile phones - portable
* FPGA 1984 EP300 /1985 XC2064
arrays of programmable logic blocks
- used for prototyping IC, CPU, ASIC’s, Video, fast processing
Alex Petrov twitter @sysmannet @AIBC Malta conference
Power, efficiency - cpu , gpu, fpga , asics
✅

15. Transaction processing infrastructure evolution, high competitive market
forced to optimize CPU -> ASIC’s as results
~ 200 000 times faster speed @ 50 000 times lower power consumption.
CPU as not able to archive power efficiency / performance
16/10/8nm 110,000 3300 0.031
Alex Petrov twitter @sysmannet @AIBC Malta conference
✅
✅

16. btcroot r&d
13
difference Data Centers
Power Usage Effectiveness (PUE) - is an important industry metric for measuring the energy
efficiency of a data center’s infrastructure
Average Data Centers PUE
Europe: 1.7 (was 2.33 in 2013)
North America: 1.8-2.4
Japan: 1.9-2.22
ASIA: 2.2-2.7
IT DCs Scenario PUE
Current avg Trends 1.9
Improved Operations 1.7
Best Practices 1.3
State-of-the-Art 1.2
Bitcoin DCs PUE
Current avg Trends 1.1
Improved Operations 1.05
Best Practices 1.02
State-of-the-Art / Trick 0.94
Alex Petrov twitter @sysmannet @AIBC Malta conference
1.6-2x more energy efficient
Power consumption illusions, efficiency
✅

17. btcroot r&d
Power consumption illusions, myths, sources
Alex Petrov twitter @sysmannet @AIBC Malta conference
Europe: 72% "Energy efficiency of the data center facility", 56% "Access to green and sustainable
energy sources.”
North America: 76% "Energy efficiency of the data center facility", 61% "Access to green and
sustainable energy sources".
Asia-Pacific: 67% "Energy efficiency of the data center facility", 68% "Access to green and sustainable
energy sources"
Bitcoin: 87+% "Energy efficiency of the data center facility", 83% "Access to green and sustainable
energy sources
✅

18. Power consumption illusions, efficiency, myths
- CO2 is generated only on electrical stations
burning fosil fuel and there a lof ot CO2.
- In 2019, total U.S. electricity generation by the
electric power industry of 4.13 trillion kilowatthours
(kWh) from all energy sources resulted in the
emission of 1.72 billion metric tons—1.90 billion
short tons of carbon dioxide (CO2).
https://www.eia.gov/energyexplained/electricity/data-and-statistics.php
https://www.eia.gov/tools/faqs/faq.php?id=74
- Mostly regular Datacenters located in cities,
and cities are far from power sources,
this leading to 12-30%
direct losses in transit/conv.
- Mining is not …
- Not generating CO2, literally zero
- Mining using 1.6-2x times more efficient Datacenters
- Mining using 1000x times more power efficient hardware
- Mining is migrating to cheaper sources, Cities not
- Mining not or less loosing in transit - higher efficiency
Alex Petrov twitter @sysmannet @AIBC Malta conference
✅
✅
✅
✅
✅
❌
❌
❌

19. Financial System vs Bitcoin?
5
NO ANALOGIES 1:1 … all different
Typical mistakes & false states
▪ VISA clearing and settlement - transport…
for VISA/Master, Bank, SEPA, SWIFT…
▪ 1 source -> 1 destination => 1 transaction
▪ 1 transaction per second => 1 TPS
2D Sender (1 source ) ==> Receiver (1 destrination) = 1 TPS
Bitcoin - has better felxibility
3D 5000 sources -> 3000 destonations, 2000 invoices paid at once.
1 Bitcoin transaction can do over 5x 2000 VISA transactions
Segwit, Schnorr, coinjoins, LN, MAST, Taproot
more correctly compare VISA vs LN - 1000x faster 1ms
▪
BITCOIN
In bitcoin transaction can contain = 500 inputs + 600 outputs,
200 invoices paid, 300 send operations complited at once.
One transaction bitcoin => can do more then 100…7000 of
transaction of VISA/SEPA/SWIFT… they has different nature &
not even close comparable
(max historically know 20000 inputs, 13890 outputs – year 2015)
Trx id:
0x7f276c0c3bf6169f3014572738c5f7bcb1b689e016c0dde439d781bbc34f28cd
201 input, 222 outputs, 731167 USD
✅
❌
✅
incorrect, it multi-dimentional nature
MTPS
Alex Petrov twitter @sysmannet @AIBC Malta conference

20. Financial System vs Bitcoin?
5
VISA BITCOIN diff times
Final transaction
2-3-5 days
(2880-7200 min)
15-17 min avg 200x
currency no yes
require banks
require bank
work hrs 8 x 5 days = 40hr
do no require bank
24/7+ = 168hr
4-5x
2d transactions
no
1d TPS
yes
MTPS
10-1000x
✅
✅
❌
Alex Petrov twitter @sysmannet @AIBC Malta conference

21. National risk assessment on money laundering
Banks
Accountancy
Service providers
Legal service
Providers
Money service business
Trust or company
Service providers
Estate agents
High value dealers
Retail betting
(unregulated gambling)
Casinos (regulated
gambling)
Cash
New payment methods
(e-money)
Digital currencies
34
14
17
18
11
11
10
10
10
21
10
5
Total
vulnerabilities
score
6
9
7
7
6
7
6
5
3
7
6
3
Total
likehood
score
211
120
112
119
64
77
56
48
32
147
60
15
Structural
risk
Structural
risk
level
High
High
High
Medium
Medium
Medium
Low
Low
Low
High
Medium
Low
158
90
84
71
64
58
42
36
24
88
45
11
Risk
with
mitigation
granding
Overall
risk
level
High
High
High
Medium
Medium
Medium
Low
Low
Low
High
Medium
Low
Themanticarea
Recently the UK government issued a national risk assessment,
concluded that the most vulnerable when it comes to money laundering
and terrorist financing are… …traditional banks, legal fin services…
Digital currencies has lowest risk ranking as more transparent.
In law, fraud is deliberate deception to secure unfair or unlawful gain, or
to deprive a victim of a legal right.
Money laundering is the act of concealing the transformation of profits
from illegal activities and corruption into ostensibly "legitimate" assets.
Higher crime rates are associated with certain locations and social
backgrounds.
Article URL QR code
False states about “fraudlent money” by nature
Alex Petrov twitter @sysmannet @AIBC Malta conference

22. Alex Petrov / about mining myths
@ twitter.com/sysmannet
Thanks for my research supporters:
- Bitfury 9 Years real expirience
- CEX.IO (Exchange since 2013)
- GMT.io (Mining Token Eko)
Thankyou!