20 W Kinzie
Bitcoin and Cryptocurrency Mining: The next big REIT Sector?
Chicago Blockchain Real Estate Collective
Wednesday, January 24, 2018
6:00 PM to 9:00 PM
For this month’s event, we will hear from the CBREC’s own Ben Hakes, who will be presenting his research on the potential for a new category of Real Estate Investment Trust: The Crypto Mining Facility.
Cryptographic proof-of-work mining is at the core of many bitcoin and open blockchain protocols. It’s role is to secure trust in a global peer-to-peer network through a costly signal; specifically, through a verifiable “waste” of energy. As open blockchains like bitcoin start to scale, they will demand increasing amounts of energy to be “wasted” in order to secure their networks. Estimates vary, but it’s likely that the bitcoin network alone consumes on the order of 3,000 – 5,000 MW as of Dec 2017.
Despite its critics, proof-of-work mining has its upside. As the legendary cypherpunk and Bit Gold creator (a precursor to bitcoin) Nick Szabo states: “[Blockchains] sacrifice computational efficiency and scalability — consume more cheap computational resources — in order to reduce and better leverage the great expense in human resources needed to maintain the relationships between strangers involved modern institutions such as markets, large firms, and governments.”
PoW mining allows human beings to trust in a protocol (similar to the way we trust HTTPS) to carry out out important transactions and not, as is the case now, in third parties that are inherently subject to self-interest and corruption.
This evening’s discussion will focus on:
(1) how bitcoin can be considered a store of energy (almost like a battery);
(2) why power plants, community renewable energy plants, and utility companies might be interested in mining bitcoin and other cryptocurrencies;
(3) the potential to run a crypto-mining facility under a REIT umbrella;
(4) the characteristics of real estate that would be attractive for mining cryptocurrencies; and, last but not least,
(5) the total market potential of the crypto mining REIT industry. Hint: we will use the $100+ billion Data Center REIT business as a proxy.
This meetup is a part of a series of monthly meetups held by the Chicago Blockchain Real Estate Collective. The CBREC is a volunteer-run community focused on the technology driving innovation and decentralization within the real estate ecosystem. CBREC meetups feature talks from blockchain researchers, software developers, entrepreneurs, venture capitalists, and public officials.
Please join us for this evening’s events and come have a drink with us afterwards at Public House, just down the street from the Chicago Blockchain Center.