Why Mexico’s Second Richest Man Invested In Bitcoin

Video transcription

I bought Bitcoins around 500 dollar and then l saw it start going up, so I thought I’m a genius at investment.

His name is Ricardo, Salinas, Plego, the founder and chairman of grupo Salinas with a fortune estimated at 12.6 billion dollars.

He is the second richest man in Mexico. Not long ago, Salinas revealed that 10 of his liquid assets are in Bitcoin. That may look a little irresponsible in Latin American conservative business circles. It’s a joke, it’s made of air. It has nothing tangible to back it up.

You know you heard all the arguments, so what is the rationale behind Salinas massive Bitcoin allocation, and why is Latin America a promising market for digital gold? to find out join us in our latest coin telegraph interview.

What’s up everyone, l’m giovanni! Welcome back to another coin! Telegraph show today I have the pleasure to be joined by Ricardo Salinas founder and chairman at grupo Salinas. How are you doing today? Ricardo, I am doing very well.

Hello from Mexico to everybody, so Ricardo. I would like to know what was the first time you heard about Bitcoin well, it was, I was invited to a conference in New York city. I think it was organized by sap. You know the guys that do enterprise software and there were different sessions and one of the sessions.

This guy from grayscale showed up and he gave us the whole talk about Bitcoin and how he’s going to take over, and l thought man this is really interesting. It immediately attracted my attention, l said: well, let’s try it out and see what happens and l put in a small amount. It was trading at the 200 per Bitcoin, it was 2013, I didn’t understand this thing about the wallet and buying it in the exchange and so forth.

...

It was very complicated. So what I liked about great scale, was they simplified it. Basically you’d put your money in a trust. Then this trust would do the investment they would take care of the whole thing they would take care of the custody they sent you, you know a monthly  statement.

Oh, that was a very good arrangement and eventually that that trust turned into gbtc, which is now an exchange-traded product. So I was very happy about it, but I’ll tell you the next part, which is very interesting. This was on the 1st of november. It was 200 and then l looked at it again on the 20th of november and it was already 550.

...

So I thought I’m a genius at investment,  I said I want to add some more so added a lot more and stayed in there for all the way until 2017. We made a very nice trading, profit cool.  What is the property of Bitcoin that attracted your attention back then a digital asset that can be traded freely across the world.

I think that’s the most powerful thing you know um, because we have digital assets like fiat, currency, digital money, it’s very difficult to make that digital money or fiat money travel across the world. So if I have some pesos right now – and i wanted to send you – don’t know – a thousand dollars – we’d have to first sell those pesos buy the dollars, get the dollars, buy some euros figure out how to send their euros to Europe, and then you could collect your money over there very difficult, so I’m because we’re in the payment business here in Mexico, we’re really big in that it attracted my attention as a payment vehicle, but then I figured out that no, it was not the payment issue. It’s the store of value that really makes it valuable. So that’s where we are today, I’m a big believer in the store value function.

...

Why do you think that Bitcoin is more valuable as a store of value than as a means of payment?

Because I think the the the payment application across borders is a fantastic application. I think it still has a lot of merit, but the thing is the volume of that for small payments is not important. I mean cross-border payments with big money is very important, but big money players are not into Bitcoin, so we have to focus on small players, small amounts and – and that’s not a big volume.

Payments is mostly inside the current the country inside the currency system. So, in that respect, the application is, is the application for Bitcoin in that environment is useless?

It doesn’t matter because there’s a very good way for me to transfer pesos from one individual to another inside my country right still, a lot of Bitcoin proponents say that Bitcoin has a great potential in the field of remittances, for example in the US. There are a lot of Mexicans working and sending money every month back to Mexico.

Don’t you think that that’s a great use case for Bitcoin, I think so, and it’s just a question of time. You know make people to adopt it. I mean the people who send money from the US to Mexico are not sophisticated customers. They are mostly manual workers trying to make a living in the United States, and they it takes a lot of effort for them to to win their dollars, and then they don’t have the means, I think,  to participate in a Bitcoin transfer scheme, but I mean it’s obviously doable and to the degree that that Bitcoin is easily available and accessible in the US to these people.

They could do that easily and we want to have in our banking system. We want to have a brokerage system attached to the bank, where we can accept and Bitcoins and trade them into pesos and also sell them, we’re working on all that. I just don’t see a big volume of it right now, but I think it’s it’s definitely going to grow so in between 2013 the year where you first bought Bitcoin and today Bitcoin experienced a lot of ups and downs.

...

Did you ever lose faith in the asset?

Well, let me tell you that’s a very good and interesting story because, obviously, when I bought the coins around 500 and then I started saw it start going up, I mean I was going crazy because I thought that I had to sell them. I mean it was obviously ridiculous right. It so happened that this trust that greyscale had it was impossible to get out of it until a certain date. So through no merit through no merit of mine, I had to sit around until that date came, which was in february of 2017, and then I could take possession of the of the asset and and sell it.

It’s not because I’m a genius, it just happened that I was not able to sell it. I was not able to short it. I was not able to hedge it, so just sat around and I think it’s been a great investment lesson.

Okay, so you said that you gained back control of your Bitcoin investment in february 2017. That year later, we had the Bitcoin price skyrocketing and then it crashed, and then we had the bear market in 2018..

How did your attitude towards Bitcoin change during that bear market?

It was fantastic timing again and also through no merit of mine, but I think the peak was in December around 20 000 and then in fair in in January, when I got hold of the asset, it was 17000. I sold it at 17 000. and got out of it completely. I had a big party, I’m very happy.

It was all my best investments ever, but you know we always return to the scene of the crime right. So when it went down to ten thousand, I thought well now it’s more reasonable and I bought some of the at that time, and then it went down more to six thousand.

I bought some more and and that’s where I am where our average right now is around 9 000 and I’m not selling it. I think I’m going to sit around for another 5 or 10 years, so you recently revealed that 10 of your liquid portfolio is in Bitcoin. That’s a pretty massive position for an asset that is still considered by many investors to be highly risky and volatile.

Can you explain the rationale behind your portfolio construction?

Well, I always view my holdings as core holdings comprised of stocks in my companies equity in my company. This is my main position and that’s not for sale. It’s not for trade, it’s forever, so other than that stock portfolio. In my own equity, I have a good size trading portfolio that I call my liquid acids and I’ve always had those liquid acids mostly invested in in hard acids like gold, silver and precious metal miners.

That’s sort of been my my destination. I don’t trade in the high-tech stocks, the Nasdaq stocks, all the high flyers, the fangs, never touch them. I’m much more of a value investor, and so that’s why i have my liquid assets in the let’s call it hard money portfolio. So, for me, to take 10 of that and put it into Bitcoin is not a big deal. It’s just the position and hopefully it will turn out okay.

...

Do you plan to increase your Bitcoin position in the near future when it drops?

I will certainly increase my position if it drops so, as reported by bloomberg your bigger listed assets, which is conglomerate group Electra Sab and TV Azteca slumped by 10 and 60 respectively this year.

Did your Bitcoin investments help to make up for some of those losses?

No, no, no, not even close, but you know again, those are my my main uh equity investments.

They happen to be quoted, listed, but they’re not for sale and at any price. So l’m not worried about the valuation of my my companies, I’m not in the stock selling business. I am in the money making business and as long as the companies continue to make money, we’re very happy okay, so my next question would be.

Why do you think that Bitcoin is so popular in Latin America?

I’m not so sure if it’s so popular in Latin America, but I mean obviously, what’s happened in Venezuela and Argentina where fiat money is collapsing and it’s become a scandal.

The way you see those wheelbarrows of of uh Venezuelan cash being thrown in the dumpsters, I mean it really opens your eyes to the problem of fiat cash. You know and most of our countries – I would say every country in Latin America has gone through some horrific inflation periods and it’s hard to forget that l mean there’s a lot of young people out there.

I’m 65 and remember what happened in the 80s. I remember very well and the the destruction of wealth and the transfer of value from the people to the government was was horrible and I think that creates a fertile ground for someone who who’s worried about preserving their capital.

Obviously this is a problem also in other countries, in Africa, for example, and in Lebanon. You know we have Zimbabwe, which is a basket case, and now Lebanese is a terrible thing, but this is what happens to fiat money.

You have been talking about Latin American currencies and also occurrences from developing countries, but what about the dollar?

A lot of our guests say that the dollar might face the same kind of debasement soon. What do you think about these predictions?

Well, the thing with the dollar is that, because it’s a reserve currency, a worldwide reserve currency, it has different kinds of rules, I mean, but the way they manage their central bank is like a third world banana republic. You know when internal credit of the federal reserve. More than doubles year over year I mean this is outrageous, it’s only because they’re Americans and they can get away with it any other country would have a massive depreciation.

...

However, having said that, what is the competition?

Europe is doing the same thing and I’m not sure about Japan, I’m not sure about the numbers, but Japan has also increased the central bank balance sheet in a horrific amount.

So what we’re seeing is that all the fiat, the major fiat currencies, are being debased as we speak so having the dollar collapse against the other currencies doesn’t make any sense. What’s going to happen is happening.

Is that asset prices go up in terms of dollars and that’s why we see the booming stock market in the United  States?

I’m pretty curious to know what is the most common perception of Bitcoin among Latin American entrepreneurs. I think there’s not really a perception very, very few people know about this and you know it’s the usual. If you get into a discussion about it, people say well, it’s it’s a it’s a joke! There’s nothing behind it! It’s made of air! It has nothing tangible to back it up. You know, you heard all the arguments. People are the same across the world, they all say the same thing right. So in this kind of conversation with your peers, you are always the outsider right. Oh, yes, I’m very much used to being an outsider okay.

I’m curious to know what is your counter argument that you usually use in these conversations with your peers to defend Bitcoin?

I think the main confusion is people come up with this idea that, oh it’s not money so well, we have to go to definitions of what is money. You know money as a unit of account as a means of exchange as a store of value, and but anybody who studies monetary history knows that money has been evolving across time.

I mean that’s why I mentioned the book of the Bitcoin standard by this Lebanese gentleman cefedine and he has a really excellent chapter on monetary history and he takes us through how people used to have. You know big rocks as as proof of wealth, and then these rocks were traded and then how you go to copper and iron. People need to exchange stuff right and what they use to exchange is the most tradeable commodity, that’s within their reach, and that’s why gold and silver became very good instruments for trade they’re commodities.

They have some use and they’re highly desirable and they’re easy to exchange. So I mean, if you just consider that logic and the way that most of the world has now gone to an all digital money, bits and bytes in the ether i mean, what’s so bad about Bitcoin, it’s bits and bytes in the ether, but the big thing is it cannot be debased and it cannot be confiscated that easily it can be confiscated, but not so easily right.

So there’s got a lot of things going for it as a means of exchange. It’s actually a pretty good commodity to be used as a means of exchange. If you want to call it money or not, it’s totally personal doesn’t matter all right now, switching topic. According to a report published by intelligence, firm insights, the majority of the world’s illicit crypto funds ends up on Latin American crypto exchanges, and that is because, apparently, Latin American exchanges have very lacks kyc and aml procedures.

...

Don’t you think that this trend could prevent crypto from establishing itself as a legit asset in Latin America?

That has nothing to do with know your customer in in anti-money laundering much less with terrorism financing. If this is just you know, the established governments don’t like Bitcoin, because it’s a competition to their fiat currency and they don’t like it and they want to get get them down. So that’s what’s happening and I think in terms of Latin America, I don’t think that there’s a lot of Bitcoin volume.

As far as I know, in Mexico, or in Venezuela or Argentina, I mean there’s got to be much less than what is traded in the us and europe. If you talk about volumes, so no I’m not worried about that. I just think that there’s a lot of hypocrisy by the establishment about this new currency being used for nefarious purposes, that’s just propaganda to try and derail the product.

Okay, so you don’t think that this illicit crypto activity could prevent Bitcoin to become a legit asset?

To become accepted by large investors and institutions in Latin America, I think there’s a big difference between being legal and being legitimate. I mean the asset is legitimate period. End of story, there’s no question about it. It’s an asset that you can buy. You can sell with the willing third party there’s no question about being legitimate.

Now any government waiving their magic wand of legislation can turn it into an illegal asset. And America again is a good example. I mean gold was a very legal asset until 1931, when it became illegal and criminal to hold goal. Judge the stroke of a pen.

Roosevelt did that so will it be? Will it be legal? I don’t know, will some governments try to make it illegal? Probably are we so concerned about that?

No, it’s just the way things are awesome, thanks a lot Ricardo that was a great conversation. Well, thank you Giovanni and hopefully, we’ll have a very nice Bitcoin year now that it goes over 20 000 any day. Now that was Ricardo, Salinas, founder and chairman at Group Salinas, I’m Giovanni your host, if you enjoyed the interview, don’t forget to like the video and subscribe to our channel.

As found on YouTube

How to earn a profit mining Bitcoin and Ether

 

For the past several months, miners around the world have been extremely active, which can be seen through spikes in hash rates that coincided with a significant increase in the prices of cryptocurrencies. At the beginning of 2020, Ether (ETH) could be bought for $130, and now, ETH has reached $500. The king of cryptocurrencies, Bitcoin (BTC), added almost a cool $10,000 to its price.

So, how can users engage with the industry? What has been obvious for some time now is that solo mining is not the way to go. For Bitcoin, Ether and every major altcoin, the blockchain is built in such a way that the complexity of finding blocks is constantly increasing, which means that a pair of GPU cards is not powerful enough to generate one block.

The point is not that the rig is insufficiently powerful to mine Ether, rather it’s impossible mathematically. One rig can sit there searching for a block for several months. If we are talking about mining Bitcoin on ASICs, then it will take even more time. It’s easier to go bankrupt on equipment and electricity than to mine crypto solo. The calculation is simple: divide the total hash rate of Ether by your hash rate and get the number of seconds it will take on average to find a block.

So, it seems logical that miners would flock to mining pools, especially today, as even non-mining companies are starting to launch such products. For example, Binance recently launched its own mining pool for Ether.

What to know before joining a mining pool

A mining pool is a server that combines the computing power of all the participants connected to it. Miners join the pool over the internet, reallocating their hardware to the pool. They jointly perform mathematical solutions to find blocks of a specific cryptocurrency. When the pool finds a block, the pool obtains a consensus from other network participants, then receives a reward. This reward is shared among all members of the pool in accordance with the amount of hash rate provided.

Before choosing a pool, it’s important to know the size of the pool. When a pool grows, the chances of discovering a block increase. But the more people join the pool, the less profit each participant receives. This is a double-edged sword: small but frequent payments, or bigger payments, but less often.

Before joining the pool, users need to find out the minimum payment, which is the minimum amount of crypto that must be mined before it will be sent to the users’ wallet. If the minimum payment is high, then the user will have to be part of the pool for a long time before receiving any income.

Another important thing that should be mentioned is that participation in any pool is not free. Users pay a certain percentage of their income for participating. Usually, such commission varies from 1% to 3%. In general, participation in any pool does not require serious investment and knowledge, and if the user has already put together a rig, then it will not be difficult to figure out which pool to choose. Here is what to pay attention to when choosing a pool, regardless of the cryptocurrency mined:

  • The number of participants in the pool, which affects individual income.
  • Ping time, or time delay, which is a result of the user’s computer needing to transfer information to the pool. Ping time depends on territorial distance — the lower the ping, the lower the time delay and the faster the data is transferred. A high ping is not appropriate because there are pauses between block changes in cryptocurrency networks, and with high ping, the user’s computer can go over the values ​​for the old block and mine in vain. Usually, a comfortable ping is up to 10 milliseconds;
  • The size of minimum payout, which should not be too large, otherwise the payment may not take place for a very long time.
  • There are many pools that are fraudulent or take a larger amount of income. Users need to find out the pool’s reputation in advance.

After constructing a rig, it’s time to choose a mining pool. Of course, most of the pools work for Bitcoin or Ether mining. Below are some of the most popular pools used to mine the top two cryptocurrencies. For Bitcoin, almost all the main pools are based in China, which is not surprising, as the country produces most of the Bitcoin mining hardware.

F2Pool

Founded in 2013, F2Pool is one of the oldest Chinese pools, and it’s of primary interest for Bitcoin miners. The pool accounts for almost a fifth of the total amount of BTC mined. The pool uses Pay Per Share+, or PPS+, as the payout model in which the miner receives a reward for each share accepted by the pool, regardless of the blocks found by the pool. The pool determines the cost of each share independently, taking into account the network complexity, reward, block time and the pool’s own power.

In addition to Bitcoin, the pool mines more than 40 coins. The commission, depending on the coin, ranges from 1% to 5%. As for Bitcoin, the pool takes 2.5% of the rewards as a commission, and payments are made once per day. Users must withdraw the earned money within 90 days, otherwise the pool will keep it for the development of the service.

Poolin

Poolin is a pool owned by parent company Blockin that launched in 2017. The pool is popular among Bitcoin miners. Poolin offers quite a few coins to choose from: Ether, Bitcoin Cash (BCH), Bitcoin SV (BSV), Litecoin (LTC) and so on. Commission fees are not fixed; rather, they are set for each cryptocurrency separately, with a 2.5% fee for BTC.

The payment model depends on the chosen coin: PPS or Full Pay Per Share, known as FPPS. Under the latter method, the pool also distributes transaction fees among miners, which adds 10% to 20% to their income. This method is used to pay for Bitcoin mining.

A notable feature is that Poolin provides mining on ASICs and GPUs from Nvidia and AMD. The development team regularly updates the software every couple of weeks to ensure the stability of the service.

BTC.com

BTC.com is one of the largest international cryptocurrency mining pools. It’s controlled by well-known manufacturer of mining equipment Bitmain, which produces a line of ASIC miners under the Antminer brand. The China-based platform was launched in 2013.

The commission for each block mined by the pool is set at 4%. Besides Bitcoin, a number of other cryptocurrencies can be mined through BTC.com, including Bitcoin Cash and Litecoin. Mining pool representatives keep records of its users’ income.

AntPool

AntPool is a Chinese project that was launched in 2014. Just like BTC.com, the pool is controlled by Bitmain. In addition to BTC, AntPool can mine seven more cryptocurrencies, including the privacy-oriented coins Dash and Monero (XMR).

Payments are made daily, and the service has low commissions, with some payments made with zero fees. In AntPool, payments are mainly made using the standard method, Pay Per Last N Share — or PPLNS — in which users get payments for the last share based on pool luck.

With this method, there is no fixed payment for the share, and the main issue is the speed of finding a block. When a pool uses the PPLNS method, the payment comes from “time shifts” between searching two blocks. It means that if the block is not found for a long time, the payment gradually increases.

A distinctive feature of the pool is the ability to work in “solo” mode — but not in the literal sense. The pool makes it possible to carry out “solo” mining through joint efforts. This means that the user whose rig has discovered the block will receive the payment.

SparkPool

SparkPool is registered in China and was launched in January 2018, and half a year later, the pool has entered the list of leaders in mining Ether. Additionally, SparkPool allows the mining of coins such as Nervos’ Common Knowledge Base (CKB), Grin, and Beam.

Mining takes place using the Ethash algorithm, and payments occur using the PPS+ method. Payments are made every day, based on Singapore Standard Time, and the minimum amount for payments is 0.1 ETH. On the 28th of every month, funds are withdrawn automatically if the balance is more than 0.0105 ETH, and the withdrawal fee is 1%.

Registering with the pool is optional. Users can mine anonymously, but if so, not all the functions of the pool will be available.

Ethermine

Ethermine is one of the most popular pools dedicated to Ether mining. This pool is the largest for Ethereum. Pool servers are located in Europe, Asia and the United States.

The pool uses the PPLNS payout model. The minimum payment amount is the equivalent of 0.5 ETH, and the maximum amount is 10 ETH. There is no commission for the withdrawal of funds, and payment comes instantly if the blockchain network is stable. The pool is intended only for mining cryptocurrency on GPU processors.

SpiderPool

SpiderPool is a five-year-old Chinese project that only supports four coins: ETH, BTC, BSV and BCH. Nevertheless, the pool is quite popular among Ether miners.

There is not much information available for non-Chinese users, but the pool’s commission is 2%. The minimum payout amount depends on the coin, but once per week, users can apply for an amount that is below the minimum threshold. Otherwise, payments are made automatically once per day.

Nanopool

Nanopool specializes in coins that are mostly mined using GPU cards. Currently, Ether, Ethereum Classic (ETC), Zcash (ZEC), Monero, Ravencoin (RVN) and Pascal (PASC) mining are supported. The pool allows users to mine not only a single cryptocurrency but also two different cryptocurrencies simultaneously, with a proportional distribution of power between them. Like any other mining pool, Nanopool has a fee that is charged based on the income of its users. The pool uses the PPLNS payment method.

Withdrawing Ether from a miner’s account balance to their wallet is carried out in Nanopool automatically when the minimum payment is reached, which is 0.05 ETH.

Nanopool does not have a clear payment schedule, but payments happen in several stages throughout the day. As soon as the miner’s account balance exceeds the set minimum value, it will be paid during the next round of payment.

To mine or not to mine?

When choosing a pool, each person should pay attention to the list of available coins to make sure their coin of choice is on the list. Also, consider the payout and commission model, as a pool that offers the lowest commission and pays for transactions is preferable. Another issue is the proximity of the pool servers: the closer the server, the more stable the mining process will be.

Related: The top crypto-mining graphics cards to get a big bang for your buck

In general, it can be said that no matter what coin the user chooses, they are unlikely to lose out when using a mining pool. According to Chun Wang, co-founder of F2Pool, the entire mining industry is currently on the rise:

“Bitcoin and other cryptocurrencies mining are continuing to grow, just the same as last year. Thanks to DeFi, there has been a period of high transaction fees in the ETH network in the past few months, leading to the ETH mining revenues much higher than usual. People were attracted to buy related mining machines to mine ETH. With the decline in mining revenue, miner’s passion for ETH mining participation fades recently. But BTC and other coins’ price rising rapidly makes mining more profitable, more people are willing to participate in mining now.”

 

Source link