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Bitcoin Mining traps: What not to do

For those considering getting into Bitcoin mining for the first time, or for those who are already wading in but feeling a lack of confidence, there are several lessons that can be learned from the veterans in the field. Of course, everyone wants to know what they must do to succeed and make a profit, but just as important is to learn what not to do to avoid catastrophe.

First of all, if you’re going to be mining and earning Bitcoin, it’s important not to store them all in the same wallet. Although wallets are typically built to be secure, even the best wallets can be lost or destroyed. For that reason, keep wallets backed up, keep some offline in cold storage, and don’t store all your Bitcoin in one place.

Similarly, whatever machine is being used to mine should be kept as secure as possible. If total strangers have physical or remote access to your source of wealth, there’s always a chance they’ll sneak some out. So don’t keep your mining rig in a location where the public, friends, coworkers or even untrusted family can get at it. Similarly, don’t install anything on that device which could make it vulnerable to digital attacks. Illegal and untrusted software could introduce vulnerabilities, and then your Bitcoin is just a couple of steps away from being forcibly withdrawn from your wallets.

Maybe you don’t want to operate your own mining hardware, but rather invest in the mining operation of someone else. If this is the case, be very wary of the possibility that any mining investment opportunity could be a scam. If the person or business you are giving money to isn’t of the highest reputation, and can’t prove a history of Bitcoin mining success, you might be throwing your money away. The golden rule is if it sounds too good to be true, it probably is.

More than anything though, don’t dive into the Bitcoin mining world without doing your homework. Many basic questions need to be answered to determine if you can set yourself up well to make a profit at mining, and then constant awareness of current news and trends is vital to stay on top of it. If you haven’t carefully looked into energy costs and the efficiency of hardware available to you, you aren’t ready to start mining. If you can’t stay well informed of price trends and the latest news in the industry, things can go south very fast.

Bitcoin mining can be a very profitable endeavor if done right. As long as you stay well informed, avoid potential disasters with some common sense precautions, and stay clear of thieves and scammers, it’s an enterprise that can help propel the world towards a new digital currency while making a few bucks for yourself.

Breaking down the fallacies of Bitcoin Mining

As we’ve previously discussed, Bitcoin miners are some of the most crucial network participants. Despite this, Bitcoin mining is one of the most misunderstood concepts there are in the cryptocurrency ecosystem. Here are some of the most common fallacies about Bitcoin mining.

Miners only benefit themselves by earning block rewards

In recent times, Bitcoin mining has become a huge industry worth billions of dollars. Huge corporations have set up mining operations, with ASIC producers such as Bitmain blowing up in profitability. This has led to the notion that Bitcoin mining is purely an economic activity for the miners.

However, this isn’t so. Bitcoin mining is a crucial part of the Bitcoin ecosystem.

When Bitcoin was launched over a decade ago, Satoshi Nakamoto’s idea of a miner wasn’t as much for the financial gain but for the security of the network. Satoshi referred extensively on the Bitcoin whitepaper to miners as nodes on the network. As the value of Bitcoin blew up in the years following its launch, many looked at mining as purely an economic activity. However, miners do much more than earn block rewards. They validate data on a computer network, running an open consensus mechanism.

Mining Bitcoin ruins your computer

This is another popular fallacy. Many believe that running the GPU consistently over time to mine Bitcoin will ruin your hardware. However, it has been proven that as long as you don’t let your GPU overheat, it will last you for years.

Mining Bitcoin uses the hardware in the same way as gaming does. As a matter of fact, some intensive games have been found to task the GPU more than Bitcoin mining does.

To ensure that your hardware lasts for long, always ensure the mining rig is well ventilated to avoid overheating. It also helps to install a cooling system.

Energy use rises as the number of transactions increase

This is one fallacy that has been spread by mainstream media outlets that don’t understand how Bitcoin mining works. According to them, with each increasing transaction, the amount of energy used in the mining process increases. Thus, once Bitcoin achieves its true purpose of being the global financial system, the energy being used in the mining process will be more than is used in any other industry.

However, this isn’t true. The energy used to mine Bitcoin relies on the competition between the miners, not the number of transactions. The validation of transactions is in itself a small task which wouldn’t take up much energy. However, since Bitcoin is a very valuable asset, millions of miners compete across the globe to be the ones who get the rewards. This competition drives the mining difficulty level up, requiring the miners to use more energy for the task. While this competition increases the energy use, it also ensures that the Bitcoin ecosystem is secure.

Mining block rewards are constant 

Mining is an economic activity for many, with vast resources going into the industry. Thus, the miners must be incentivized to keep up the mining for the security of the Bitcoin network. While some of the reward comes in the form of transaction fees, the main incentive is the block reward.

Block rewards halve every four years. Bitcoin has a hard cap supply of coins which stands at 21 million. Once these coins have been mined, probably a century from now, the miners will have to rely on transactions fees. However, after every four years, the block reward halves automatically.

Mining Bitcoin is illegal

Despite Bitcoin being around and revolutionizing finance for over a decade, governments are still trying to figure out how to regulate the industry. As such, many people are concerned that mining Bitcoin could be considered illegal in their jurisdictions.

However, no government has explicitly stated that Bitcoin mining is illegal. Even in countries where ICOs and cryptocurrency exchanges have been banned, miners still haven’t had any laws enacted against them. A good example is China, a country that has been anti-Bitcoin for quite some time now. Yet, despite this, China still has the highest concentration of miners globally.

Understanding Bitcoin mining hardware

The hardware used to mine Bitcoin has changed quite a bit since the digital currency was first introduced in 2009. As the difficulty to mine a block has gone up, the hardware used to stay profitable has gotten more specialized and efficient.

Mining hardware has to do a couple of things to be successful. It needs to perform calculations fast enough to mine the next block and award it to the rig’s owner, and it needs to do so efficiently enough to turn a profit.

The reward of each block is 12.5 Bitcoin in 2019, and the price of the coin determines how much that will be. The cost to mine that block depends on the efficiency of the hardware in performing its calculations, which can be determined by the amount of power it needs to run, and how much that
power costs.

In 2009, the difficulty to mine a block was fairly low, and just about anyone could mine Bitcoin using the multi-core processor in their personal computer. The price of Bitcoin was low, but so was the cost of running a consumer grade computer.

As the difficulty of mining Bitcoin steadily increased over time, the hardware needed to evolve to meet the task. In the early 2010s, Bitcoin miners discovered they could use graphical processing units (GPUs), typically used for video processing and computer games, to mine Bitcoin. Multiple GPUs could be installed in a machine, and they would mine Bitcoin faster than CPUs had.

As Bitcoin got more popular and mining got more difficult, GPU mining eventually gave way to ASIC (Application specific integrated circuits) mining. ASIC rigs are purpose built to mine Bitcoin, and provide the fastest computational power possible for the lowest consumption of energy.

Now, the difficulty of mining has far surpassed the capabilities of CPUs and GPUs. Although they can technically do it, the speed at which they operate is too slow, meaning someone else will mine the next block first, and the energy cost to do so would be prohibitive. To mine Bitcoin, an operation needs ASIC miners, and plenty of them.

ASIC technology is progressing all the time, with hardware getting faster, more efficient, and less energy intensive to run. Modern mining operations run top of the line ASIC rigs, which can be a big investment up front, but gives them the most powerful systems to mine blocks with for the most efficient energy usage.

It’s a huge step forward when compared to the early days of Bitcoin when anyone could mine from their dorm room, but the Bitcoin industry has demanded that level of progress from miners and mining equipment.

No, Bitcoin Mining is not a threat to the environment

Type Bitcoin Mining on any search bar and among the first things that will pop up are how it’s “power-hungry,” an “energy hog,” and essentially a threat to the environment.

But is it really?

Although mainstream media has been quick to pass judgment that cryptocurrency mining is detrimental to the environment, there have studies and research papers that contradict these FUDs. A paper in the Joule journal estimated that Bitcoin’s annual electricity consumption adds up to 45.8TWh as of November 2018, accounting for 0.2% of global electricity use.

A CoinShares study, however, pointed out that majority of the energy consumed by mining cryptocurrencies—as much as 74.1%—comes from renewable sources such as wind, solar, and hydropower, which makes Bitcoin mining is “more renewables-driven than almost every other large-scale industry in the world.”

CoinShares isn’t the first to dismiss the doom-and-gloom scenario painted by groups castigating cryptocurrency for its perceived environmental wastefulness. Dr. Katrina Kelly-Pitou, a research associate in electrical and computer engineering at the University of Pittsburgh, wrote an article for non-profit academic media outlet The Conversation in which she noted that the general narrative that portrayed cryptocurrency as an environmental risk is an oversimplification that leads to factual inaccuracies among mainstream readers.

As Kelly-Pitou pointed out, “I am a researcher who studies clean energy technology, specifically the transition toward decarbonized energy systems…New technologies—such as data centers, computers and before them trains, planes and automobiles—are often energy-intensive. Over time, all of these
have become more efficient, a natural progression of any technology: Saving energy equates to saving costs.”

In Bitcoin’s case, the systems get more efficient as usage grows. This means that the more people uses the network to transact, the more energy efficient Bitcoin system mining gets.

By restricting the discussion to Bitcoin mining’s energy consumption alone, the larger truth about energy and environmental concerns remain unaddressed. Kelly-Pitou noted: ““Like many other aspects of the energy industry, Bitcoin is not necessarily a ‘bad guy.’ It’s simply a new, and vaguely understood, industry. The discussion about energy consumption and bitcoin is, I believe, unfair without discussing the energy intensity of new technologies overall, specifically in data centers.”

Bitcoin Mining during the highs and lows of a turbulent market

If your new to Bitcoin mining, and the market is doing very well, it can feel like you’ve acquired a license to print money. The real test comes when the price of Bitcoin turns sour, which it can very quickly, and a mining operation has to do everything it possibly can to keep making a profit.
Managing all the variables of the chaotic Bitcoin mining industry can be tricky.

The basics don’t change very much either way, so streamlining an operation to work regardless of the price of digital currencies is key. That starts with keeping costs low.

An operation wants to start with the most energy efficient equipment it can get its hands on to keep the demand for energy as low as possible. After that, it will also want to find the cheapest, most reliable sources of energy. Canada makes a great option for cheap renewable energy, and it has the added benefit of being a cold weather country, keeping cooling costs low. Finally, different governments might be offering tax incentives or energy discounts to attract mining operations, and this kind of bonus is hard to walk away from.

Once a mining operation has these basics down, it then becomes a question of how does it handle the fluctuations of the marketplace. The price of Bitcoin can vary wildly, and energy costs are rarely guaranteed to stay consistent.

The key here is the ability to scale and stay flexible. If the price of Bitcoin suddenly falls off a cliff, having an operation that can quickly shift to other SHA‐256 derived digital assets could mean the difference between running a deficit or turning a profit. Having a few rigs in reserve that can be turned on when the market starts climbing or turned off when it takes a dive, could help pad the budget for when the price levels off later on.

The uptime of those rigs is important to maintain overall as well. If the market suddenly surges, and only 900 of 1000 miners are operating, 10% of the hash power at an operator’s disposal is being wasted. The key to maintaining an efficient, profitable operation is getting the most uptime out of all the hardware, and avoiding situations when it needs maintenance at the worst possible time.

Having flexible energy options can make a huge difference here as well. If a mining site is entirely dependent on one external supplier of energy, sudden changes in prices, perhaps because of a change in seasons, could be disastrous to the bottom line. Having internal solutions, if local government allows it, such as solar panels of wind turbines, can both stabilize energy costs and provide an additional source of revenue.

Bitcoin mining can be extremely profitable, but if an operation doesn’t take control of as many variables as possible, it can also be very risky. By taking all of these factors into account, a Bitcoin miner will find much more long success and survive the next rollercoaster ride of the marketplace.

The advantages of crypto mining in Canada

Canada has quickly proven itself as the best place for cryptocurrency miners. For many reasons, including political, climate and technological, the great white north provides all sorts of advantages to mining operations.

The first and most decisive reason miners chose Canada is for its low electricity costs. As cryptomining can be a very energy intensive process, having low cost, clean, renewable sources of energy is a key factor for miners, who need to keep this part of their budget under control as they scale their efforts. Canada has some of the cheapest electricity in the world, largely coming from environmentally friendly sources.

Quebec, for example, gets all of its electricity from environmentally friendly hydroelectricity. It has so much of it, that it consistently has some of the cheapest energy costs in North America. Manitoba also offers cheap hydro, and have attracted cryptominers as a result. Alberta similarly competes with cheap natural gas electricity, bringing in plenty of operations.

It’s also comparatively inexpensive to import Chinese manufactured mining equipment in Canada, as a typical 27.5% import duty does not apply. Getting an operation started with a lower start-up cost could make a big difference to short term profits.

As a cold weather country, Canada helps to solve one of the most consistent issues a mining operation can face: overheating. Cold Canadian winters, and summers that don’t get too hot, help reduce the cooling costs associated with crypto mining, which can run quite high with the temperatures that a mining rig can achieve.

It should be noted though that Canada is a big country, and the climate can vary wildly. Southern Quebec, for example, can get very hot and humid in the summer, and doesn’t offer much of an advantage when it comes to keeping equipment cool.

Finally, Canada’s governments have taken a mature, considered approach to cryptocurrency mining. As opposed to other countries that have proven to turn on a dime with their policies, Canada’s approach has been to allow development, and broadcast their intended changes in policy well in advance. Those that they have seriously considered are intended to protect the people and fight real crime, like anti-money laundering laws proposed in November 2018.

Squire, a publicly listed company, is constantly reviewing hosting opportunities, both in Canada and in stable jurisdictions around the world, as it maintains its growing fleet.

When it comes to cryptocurrency mining, Canada has provided a great combination of factors to run a mining operation. Energy is cheap, the climate is preferable, and governments are supportive. That’s a tough combination for most countries to compete with.

What is proof of work, and why is it integral to Bitcoin Mining?

Proof of work is a term that’s been regularly tossed around in the Bitcoin Mining sector. But what is it really, and why is it essential for cryptocurrencies?

The Proof of Work algorithm, or PoW for short, is one of the primary tenets underpinning the operations of Bitcoin—the original Bitcoin as envisioned by the Satoshi Nakamoto whitepaper. It’s the original consensus algorithm in a blockchain network, creating an economic measure that deters attacks to the network such as distributed denial-of-service attacks (DDoS).

PoW is a concept that exists prior to Bitcoin’s genesis. The idea of PoW was first explained in a 1992 journal article authored by Cynthia Dwork and Moni Naor as a way to deter spam, but the term “proof of work” didn’t come into play until 1999, when Markus Jakobsson and Ari Juels coined it in a document.

For Bitcoin, the PoW algorithm makes it so that the probability of mining a block depends of the work done by miners. In his seminal whitepaper, Satoshi Nakamoto stated that miners “vote with their CPU power.” This allows for a competitive race to solve a mathematical puzzle, and successful miners are rewarded with Bitcoin, leading to an ever growing robust system with a distributed trustless consensus—one that is increasingly more difficult, not to mention costly to attack.

Writer Sumanth Neppalli explains in a Medium post that Proof of Work “discourages collusion of actors” as it is “a global decentralized free market that cannot be influenced by any action other than investment into the network.”

The fallacy of wastefulness

These days, mining activities require sizeable investments, as equipment move from GPU to ASIC. In addition, many crypto opponents deemed the PoW concept as wasteful.

The ongoing fallacy is that Bitcoin Mining will pave the way for “environmental devastation” due to its energy use. But as Dan Held points out, POW is about the physics behind a movement, not about the
code. Since cryptocurrency is a commodity that is minted from energy, POW turns “electricity into digital gold.”

The so-called “economic density” of a crypto transaction is also constantly increasing. This means, according to Held, is that the energy unit secures more economic value as the blockchain evolves into a settlement network.

Bitcoin Mining operations can be located in areas where the least expensive energy can be sourced, and in the future, it can help with renewable energy sources that have variable output. Squire Mining, for its part, is constantly reviewing hosting opportunities in stable jurisdictions around the world as it maintains its growing fleet of mining operations.

Squire Enters Into A Binding Letter Of Intent With Core Scientific For Hosting Of Blockchain Cloud Computing Assets

Vancouver, British Columbia; June 4, 2019 – Squire Mining Ltd. (CSE:SQR | FWB:9SQ | OTCQB:SQRMF) (“Squire”) is pleased to announce that it has entered into a binding letter of intent (the “Agreement“) to relocate 41,166 blockchain cloud computing units (the “Assets”) pursuant to a hosting agreement with Core Scientific Inc. (“Core Scientific”).  

Pursuant to the Agreement, the Assets will be hosted at Core Scientific’s state‐of‐the‐art facilities in the United States and performance will be optimized using Core Scientific’s proprietary technology. Additionally, the parties have agreed on a collaboration with respect to the development of a Bitcoin SV‐based blockchain supply management and distribution solution that is expected to benefit hardware manufacturers, infrastructure providers and end‐users in the blockchain and crypto mining sectors. Squire has committed to providing hosting prepayments of US$6,375,000 and covering shipping and customs costs to relocate the Assets, and Core Scientific has committed to expending a minimum of US$12,000,000 to buildout its infrastructure to accommodate the Assets. 

Core Scientific (https://www.corescientific.com/) is a leader in artificial intelligence (“AI”) and blockchain, delivering best‐in‐class infrastructure and software solutions. In an increasingly distributed and connected world, Core Scientific believes AI and blockchain will fundamentally change the way information is processed, shared and stored across a range of industries. Led by a team that has a 10+ year AI and blockchain success story, Core Scientific provides custom hosting solutions at scale.

Core Scientific is pioneering new innovations and best practices in the AI and blockchain landscape, with advanced capabilities operating infrastructure at scale. Core Scientific’s platform is trusted by large‐ scale partners around the world to deliver reliable solutions that quickly adapt to dynamic market conditions.

Core Scientific’s Chief Executive Officer, Kevin Turner said, “I am delighted that Core Scientific is partnering with Squire. Our industry leading in‐house management and monitoring solution, Minder™, combines our hosting expertise with data analytics and AI to ensure continuous uptime, alerting, monitoring and management, and our custom ASIC operating system, MinderOS™, and optimization suite provides significant profitability gains for Squire.”

With Bitcoin SV becoming a massively scaled blockchain, it is paramount that operators in this space understand the complexities of this network and the need for standardization so that the ecosystem is adopted by enterprise and institutional users.

“It is important for Squire to partner with such a reputable and trustworthy industry leader in the space. Core Scientific’s facilities are advanced and secure. Their focus on optimal performance, dedicated maintenance and internal controls will have a significant impact on Squire’s operations and the longevity of our assets.” Stefan Matthews, Chairman of Squire.

About Squire Mining Ltd.

Squire is a Canadian based technology company engaged, through its subsidiaries, in the business of developing and operating cloud computing data infrastructure and system technology to support global blockchain applications related to Bitcoin SV, Bitcoin Core and other associated SHA‐256 derived digital assets.  

For further information contact:

Angela Holowaychuk
Interim Chief Executive Officer
Telephone: +1 800‐371‐2809

ABOUT BITCOIN SV: Bitcoin Satoshi Vision (BSV) is the only Bitcoin implementation that follows Bitcoin’s original design, protocol and vision, as expressed by its creator Satoshi Nakamoto. Squire supports the BSV roadmap as it is the only project that aims to enable massive blockchain scaling by significantly increasing the Bitcoin block size so blocks can fit much more transactions and data and thus generate more transaction fees for miners, and outlines for the crypto mining sector why massive blockchain scaling is important for the entire interrelated Bitcoin ecosystem. Dr. Craig S. Wright, who serves on Squire’s strategic advisory board, has been issued U.S. copyright registrations, as author under the pseudonym Satoshi Nakaomo, for the original Bitcoin white paper and most of the original Bitcoin code.  

CAUTIONARY STATEMENT REGARDING FORWARD‐LOOKING INFORMATION: This news release includes “forward‐looking information” as defined under applicable Canadian securities legislation. Forward‐ looking information and statements include, but are not limited to, disclosure regarding possible events, that are based on assumptions about future economic conditions and courses of action. Forward‐looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking information. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties, uncertain and volatile equity and capital markets, lack of available capital, future demand for Bitcoin SV, Bitcoin Core and other cryptocurrencies and risks related to the mining thereof, integration issues, personnel and staffing requirements and technological change and obsolescence and risks that the conditions to closing in respect of the transaction will not be satisfied. There are no assurances with respect to: the timing and completion of the relocation of the blockchain and cloud computing units pursuant to the Agreement; the effect of the Agreement and the hosting agreement with Core Scientific on Squire’s business; the timing, completion and success of the collaboration by Squire and Core Scientific with respect to the development  of a Bitcoin SV‐based blockchain supply management and distribution solution (including any benefit therefrom to hardware manufacturers, infrastructure providers and end‐users in the blockchain and    CAN_DMS: \127788542\4 crypto mining sectors); statements relating to Core Scientific’s innovations and best practices in the AI and blockchain landscape; and statements made by the Chairman of Squire. Actual results and future events could differ materially from those anticipated in such forward looking information. Accordingly, readers should not place undue reliance on forward‐looking information. All forward looking information in this news release is made as of the date hereof and qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. Squire disclaims any intention or obligation to update or revise such forward‐looking information, whether as a result of new information, future events or otherwise, except as required by law.

CoinGeek Toronto Conference 2019: Bigger blocks, massive scaling, no limits

UPDATE

In case you haven’t noticed, the Squire Mining website has gotten a fresh new look! On this space, expect weekly blog posts that will keep you updated on what the team is up to, as well as think pieces from our advisory board inaugural members—Bitcoin Association Founding President Jimmy Nguyen and nChain Chief Scientist Dr. Craig Wright—on the future of mining and education about the space.


CoinGeek Conference: Bitcoin, no limits

Bitcoin professionals from all over the globe gathered at the recently held CoinGeek Toronto Conference 2019 for two days of meaningful discussions about the developments happening with Bitcoin SV (BSV), and also to talk about why massive on-chain scaling is essential for the BSV ecosystem to move forward. Massive scaling, after all, was the overall theme of the conference. No limits, only with Bitcoin SV.

Day 2, aka the main conference, showcased high-caliber speeches, panel discussions, and special features including finalist presentations for the Bitcoin Association’s first BSV Hackathon, as well as a special intimate conversation with nChain Chief Scientist Dr. Craig S. Wright about the beginnings of Bitcoin.

Money Button CEO Ryan X. Charles, who discussed “Digital Storage and Digital Rights Management on the BSV Blockchain with Money Button,” tells us what it actually means to use massive on-chain scaling in a real business.

“Individual companies can often need terabyte size blocks just by themselves depending on what they do, so we need to scale massively because we’re going to put more than just one company—we’re going to put an entire industry, we’re also going to put the entire world’s economy on this,” Charles said. “The reason why that matter is it’s not even just payments. You actually can put real data on the blockchain too, and so the sizes start getting very, very large. If you need properties like, I really want this contract to be encrypted but also stored permanently and immutably so that no one can alter it after the fact, you put the actual contract on the blockchain. That takes data.”

But why is it important to scale now, and scale fast in terms of block size? The answer is simple: There’s a direct economic need for miners.

Bitcoin miners earn a fixed block reward amount for each block they mine, in addition to the fees for each individual transaction mined on the block. Currently, the reward is 12.5 coins, but come 2020, it will be split in half to 6.25 coins. To remain profitable after the reward halving takes place, miners will need to generate more revenue from higher volumes of transactions via new applications that are processing large amounts of data on the blockchain.

Even indie game developer Kronoverse agrees that BSV, which has made unlimited scaling a unique reality, the only choice for application developers like them. David Case, chief architect of Kronoverse, explains:

“Well really, BSV is kind of like our only choice… it solves all the problems that we’ve been [having], and we’ve spent a year and half in R&D, [actually] over a year trying to just explore everything that’s out there in the blockchain space… Every step of the way, we had to solve all sorts of other problems, build all sorts of other toolings, and the scale and just being able to rely on the commodity blockchain that we don’t have to worry about how to solve the consensus aspect but yet having the scaling and the cheap transactions, just… it’s our only choice.”

For his presentation, Bitstocks CEO Michael Hudson talked about “Banking on BSV,” giving the audience an overview of what they can expect from Bitstocks’ groundbreaking Bitcoin banking ecosystem, Gravity.

“What we are launching first is the ability of the investment service, so the ability to hold Bitcoin [Core], Bitcoin Cash as well as obviously Bitcoin SV. The logic behind that is to enable people who might have a different view as what Bitcoin really is and while they’re going on their inevitable journey of discovery they have access to then convert their assets into SV if they wish to make that decision to then interact with the wider Gravity ecosystem, so that will be the current accounts, the debit cards, the loan systems, Gravity Pro which eventually is going to be some other cool things, I’m not going to announce right now, but they’re all going to be exclusively on Bitcoin SV. I don’t want to ostracize the Bitcoin Core community or the Bitcoin Cash community because they’ve been essentially miss-sold what Bitcoin is. We want to help support them and provide the infrastructure if they so wish to then have a much better experience that’s more in line with what we believe Bitcoin to be, which is Bitcoin SV,” Hudson tells us.

One of the highlights of CoinGeek Toronto scaling conference is a fireside chat with Founding President of the Bitcoin Association Jimmy Nguyen and Dr. Craig Wright, the person behind the pseudonym Satoshi Nakamoto and creator of Bitcoin. The two’s wide ranging discussion included topics like the beginning of Bitcoin—Nguyen opened the fireside by asking Wright, “Did you create Bitcoin?”—as well as the destiny that Bitcoin was created to achieve, and how Bitcoin SV (BSV) is fulfilling the destiny of Satoshi Vision.

Wright has this to say about Bitcoin and its future:

“Bitcoin is an immutable evidence trail. It is a single global ledger. Once we roll it out, we’re going to make fraud expensive, fraud difficult. They’re going to make it so that people can actually trust money, trust negotiating with people, and because there’s no way to get away with something bad, there’s a record kept of everything, that’s what we’re seeking.”

Watch CoinGeek Toronto Conference Day 2 highlights:

Squire Agrees To Purchase Companies With Cloud Computing Assets Totaling 2,985 Petahash To Become One Of The World’s Largest Public Crypto Mining Companies

Vancouver, British Columbia – May 30, 2019 – Squire Mining Ltd. (CSE:SQR | FWB:9SQ | OTCQB:SQRMF) (“Squire”) is pleased to announce that on May 29, 2019 it entered into a letter agreement (the “Agreement”) with Calvin Ayre, Cunning Hams Limited (“Cunning Hams”) and Tansley Equipment Limited (“Tansley”) to directly or indirectly purchase all of the issued and outstanding shares of four corporations (consisting of Cunning Hams, Tansley, Woodland Technology Group Inc. (“Woodland”) and Laser Lollipop Limited (collectively, the “Companies”)) which own and operate a fleet of cloud computing assets in Canada, the United States and China, representing approximately 2,985 petahash (the “Transaction”).

As consideration for the Transaction, Squire will issue to Calvin Ayre (i) 80,000,000 common shares (the “Common Shares”) in the capital of Squire and 827,000,000 non‐voting participating shares (“NVPS”, and together with the Common Shares, the “Shares”), a new class of shares to be created, subject to shareholder approval. The aggregate consideration payable to Calvin Ayre in respect of the Transaction will further be subject to adjustments for pre‐payments and payments under an income‐sharing agreement to be entered into on closing (the “Closing”) of the Transaction. Squire expects to provide further information as to Transaction valuation following receipt of a fairness opinion in respect of the Transaction.

Transaction Highlights:

  • Creates Leading Blockchain Business, with one of the Largest Public Portfolios of Mining Rigs:  
    • Pro forma the Transaction, Squire will own and operate approximately 217,000 mining rigs, representing approximately 3,300 petahash.
  • Diversified Operations:
    • The Transaction will diversify Squire’s mining rigs across geography as the Transaction assets are located in the United States, Canada and China. Squire’s current fleet is currently operating out of Kazakhstan.
  • The Transaction will also diversify Squire’s hosting partners from one group to six groups.
  • Highly Accretive:
    • Management believes the Transaction is over 20.0% accretive to Squire’s expected next twelve month cash flow as measured by EBITDA.
  • Attractive Transaction Structure:
    • The Transaction is being financed 100.0% through share consideration, preserving Squire’s robust cash balance of over CAD$19,000,000.

“We are proud of what the team has accomplished to date. Squire has diversified away from a single

business purpose to inject a revenue generating cloud computing operation and established a solid foundation for sustainable growth and returns, and has become a dominant force in the blockchain industry,” Stefan Matthews, Chairman of Squire.

The Transaction signifies Squire’s commitment to ensuring that the crypto mining industry, that is supporting and securing the Bitcoin network, continues to scale and remain profitable in the long term after Bitcoin’s block reward halves in 2020 and every several years after that. For each block they mine, Bitcoin miners earn a fixed block reward amount (currently 12.5 coins, but halving to 6.25 coins next year), as well as fees for each individual transaction mined in the block. When the reward halving event takes place, to remain profitable, miners will need to generate more revenue from higher volumes of transaction fees (for example, from new applications that are processing large amounts of data on the blockchain).

This is why Squire supports the BSV roadmap, as it aims to enable massive on‐chain scaling by significantly increasing the block size such that blocks can fit much more transactions and data, and outlines for the crypto mining sector why such scaling is important for the entire interrelated Bitcoin ecosystem.  

“We need to focus on massive scaling of the Bitcoin blockchain to accommodate the throughput needed for enterprises to make use of this technology. By vending my mining assets into Squire, I am doubling‐down on my commitment to Bitcoin’s success. These assets will enable Squire Mining Ltd. to compete at a global level to pave a path for enterprise usage of blockchain technology to flourish,” Calvin Ayre.

Closing is subject to customary conditions, including: (i) approval of the Canadian Securities Exchange (the “CSE“) Canadian Securities Exchange (the “CSE“)  and CSE acceptance of a revised Form 2A Listing Statement from Squire; and (ii) shareholder approval by at least 66 2/3% of the votes cast by the shareholders of Squire in respect of an amendment to the articles and notice of articles of Squire to create the NVPS and by a simple majority of the votes cast by the shareholders of Squire in respect of a change of business to provide for the Transaction (the “Shareholder Approvals”) in each case at a shareholders meeting (the “Shareholders Meeting”) expected to be held on or about July 31, 2019. Further details regarding the Transaction will be provided to shareholders by way of a management information circular to be distributed prior to the Shareholders Meeting in accordance with applicable corporate and securities laws.

The Companies

The Companies, each of which is incorporated under the laws of Antigua and Barbuda, except for Woodland which is incorporated under the laws of the Province of British Columbia, own and operate 203,121 ASIC mining rigs, representing approximately 2,985 petahash, or approximately 285 MW of power consumption, which, upon Closing, would make Squire one of the largest publicly traded crypto mining companies globally, as measured by terahash/s. The rigs are all operated by leading hosting providers and are allocated across the United States, Canada, and China. Together with the fleet operated by Squire’s subsidiary Freschette Limited in Kazakhstan, the Transaction will result in one of the largest publicly traded blockchain mining operations in the world.

The Consideration

As noted above, Calvin Ayre would receive approximately 80,000,000 Common Shares and 827,000,000

NVPS of Squire at Closing. The NVPS, the creation of which is subject to the Shareholder Approvals, would be identical in all respects to the Common Shares other than that they will not be entitled to a vote at meetings of the shareholders of Squire unless required by law. Squire and Calvin Ayre would enter into a comprehensive coattail agreement on or prior to Closing to provide for the Common Shares and NVPS to be treated equally in a take‐over bid and other fundamental transaction situations.

The Transaction would result in Mr. Ayre having 45% of the voting control of Squire and would effectively constitute a reverse take‐over and fundamental change of business. Under the terms of the Transaction, at any time the percentage of Common Shares held by Calvin Ayre falls below 40% of the issued and outstanding Common Shares at that time, a number of NVPS shall be converted into an equal number of Common Shares until the percentage is 45% or there are no further NVPS outstanding. The parties have further agreed to amend the unsecured convertible debenture note issued in connection with Squire’s acquisition of Freschette Limited (the “First Step Transaction”) on Closing to provide for the shares issuable upon conversion of the debenture to be NVPS.

Mr. Ayre has agreed to a one (1) year lock‐up of the Shares issued to him in connection with the Transaction to be released in equal quarterly tranches, subject to exceptions for private or over‐the‐counter trades outside of the facilities of the CSE or pledging arrangements to secure debt.

The consideration payable to Calvin Ayre in respect of the Transaction is subject to adjustment based on a pre‐closing audit of the Companies to be completed by an independent auditor acceptable to Squire and Calvin Ayre, a post‐closing reconciliation of operational units in excess of an agreed margin for wear and tear, breakdowns or damage and payment by Squire to Calvin Ayre of all pre‐payment balances or advances for hosting services advanced by the Companies and existing as of the Closing and the terms of an income sharing agreement to be entered into on Closing.

Pursuant to the income sharing agreement profits and operating expenses from the operation of approximately 100,000 units will be shared as to approximately 42% with Calvin Ayre, subject to terms agreed to in respect of their continued operation.

Additional Details about the Transaction  

The parties will enter into definitive agreements in respect of the Transaction on the terms agreed to in  the Agreement and otherwise substantially on the same terms as the First Step Transaction, including a  definitive  purchase  agreement,  income‐sharing  agreement,  coattail  agreement  and  a  cost‐plus  based  services  agreement  in  respect  to  the  ongoing  management  and  operation  of  any  remaining  cloud  computing assets owned by Calvin Ayre or his affiliates. The parties expect Closing to occur as soon as possible after the Shareholders Meeting.

Under the terms of the Agreement, either party may terminate the Agreement if the Closing does not

occur by August 31, 2019 or the approval of the CSE or the Shareholder Approvals have not been obtained by or the Shareholders Meeting has not been held by August 31, 2019 or it becomes reasonably apparent that such approval will not be obtained by August 31, 2019. In such circumstances, Squire would be obligated to pay to Calvin Ayre liquidated damages equal to USD$1,000,000 and shall have no obligation thereafter.

Prior to Closing, at Squire’s request and subject to certain expense sharing between the Parties and indemnification from Squire in respect of any extended period of non‐operation of such units, the Companies will cause certain of the units to be relocated from their current location for strategic reasons.

Further information regarding the Transaction will be included in the information circular that Squire will prepare, file, and mail in due course to its shareholders in connection with the Shareholders Meeting. The Agreement will be filed on the SEDAR profile of Squire on the SEDAR website at www.sedar.com.

CSE Stock Halt

As the Transaction would constitute a “fundamental change” for Squire as defined in CSE policies, pursuant to CSE policies, Squire’s stock has been halted and will remain halted at least until the meeting materials to be sent to Squire shareholders for approval of the Fundamental Change have been reviewed and accepted by the CSE and posted to the CSE website. The halt is considered a Regulatory Halt as defined in National Instrument 23‐101‐Trading Rules.

Advisors to the Parties

Canaccord Genuity Corp. is acting as exclusive financial advisor to Squire in respect of the Transaction. Norton Rose Fulbright Canada LLP is acting as legal counsel to Squire. Fasken Martineau DuMoulin LLP is acting as legal counsel to Calvin Ayre, Cunning Hams and Tansley.

Cannacord Genuity Corp. will be paid a success fee in connection with the Transaction further details of which will be disclosed in the information circular in respect of the Shareholder Meeting.

About Squire Mining Ltd.

Squire is a Canadian based technology company engaged, through its subsidiaries, in the business of developing and operating cloud computing data infrastructure and system technology to support global

blockchain applications related to Bitcoin SV, Bitcoin Core and other associated SHA‐256 derived digital assets.

COINGEEK TORONTO CONFERENCE – May 30, 2019 – Toronto, Canada

Come meet the Squire Mining Ltd. team in person and also learn about the latest massive scaling developments on the BSV blockchain at the CoinGeek Toronto conference on May 30, 2019 at The Carlu in Toronto. Pay with Bitcoin SV and you will receive a discount via CoinGate.

For further information contact:

Angela Holowaychuk
Interim Chief Executive Officer (Office Telephone: +1 800‐371‐2809)

The CSE accepts no responsibility for the adequacy or accuracy of this release.

CAUTIONARY STATEMENT REGARDING FORWARD‐LOOKING INFORMATION:

This news release includes “forward‐looking information” as defined under applicable Canadian securities legislation. Forward‐looking information and statements include, but are not limited to, disclosure regarding possible events, that are based on assumptions about future economic conditions and courses of action. Forward‐looking information is necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward‐looking information. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties, uncertain and volatile equity and capital markets, lack of available capital, future demand for Bitcoin SV, Bitcoin Core and other cryptocurrencies and risks related to the mining thereof, when and if halving of Bitcoin will take place and the impact such halving will have on profitability, the ability to increase block size and the effects of such increases, integration issues, the timing for release of the halt of trading of the Common Shares on the CSE, personnel and staffing requirements and technological change and obsolescence and risks that the transaction will not be completed or will not be completed on the same terms or in the time provided or that conditions to closing in respect of the transaction will not be satisfied including without limitation: required Squire shareholder approval; certain termination rights available to the parties under the Agreement; Squire obtaining the necessary approvals from the CSE for the listing of the Common Shares in connection with the Transaction and acceptance of the Form 2A Listing Statement by the CSE; and other closing conditions, including compliance by the parties with various covenants contained in the Agreement, statements with respect to the effect of the Transaction on Squire and its strategy going forward, statements with respect to the anticipated benefits associated with the Transaction, the timing and completion of the acquisition of the Transaction (on the terms presently contemplated or otherwise), or the negotiation, entering into and completion of any definitive agreements (on the terms presently contemplated or at otherwise). Actual results and future events could differ materially from those anticipated in such forward looking information. Accordingly, readers should not place undue reliance on forward‐looking information. All forward looking information in this news release is made as of the date hereof and qualified by these cautionary statements and those in our continuous disclosure filings available on SEDAR at www.sedar.com. Squire disclaims any intention or obligation to update or revise such forward‐looking information, whether as a result of new information, future events or otherwise, except as required by law.

Here’s everything you need to know about Bitcoin Mining

Chances are you’ve already heard the phrase “Bitcoin Mining,” and among the first things that you immediately thought of are stones, metals, pickaxes, and getting rich. Well, you’re not too far off.

Ever wondered where Bitcoins come from? With fiat currencies, it’s the government that decides when to print and distribute the money. Bitcoin, which has no central authority, is different. To mine Bitcoins, miners use specialized computers to solve complex math problems, and if they’re successful, new Bitcoin is produced. It’s like striking gold from the ground, but digitally.

Bitcoin mining, however, serves a vital purpose other than rewarding the miners for their hard work. The activity confirms the transactions that take place in the blockchain in a trustful manner. By verifying if the transactions are valid, Bitcoin miners make the network trustworthy and secure as well as help prevent double-spending, in which the Bitcoin is illicitly spent twice, from taking place.

How does Bitcoin Mining work?

The first step involves verifying the transaction information. Once verified, the Bitcoin miners bundle transactions in a block, then they insert the header of the most recent block into a new block as a hash. This is followed by solving the Proof-of-Work (PoW) problem. PoW is a method that ensures the new block was difficult—costly and time-consuming, in other words—to be made.

After the PoW problem is solved, the new block is added to the local blockchain and then propagated to the network.

Bitcoin, now reborn as Bitcoin SV (BSV), as well all current Bitcoin forks rely on the SHA-256 hashing algorithm for mining. This is the reason why having specialized equipment is important, as it demonstrates that thee miners are making serious skin-in-the-game investments to take part in securing the network. In comparison, CPU-focused algorithms, like Equihash, can pave the way for botnets and server farms to easily mine on the network, while having no incentive to continue mining if a more profitable use of CPU time presents itself.

Simply put, miners secure the Bitcoin network—and the more miners there are, the more secure the network becomes.

Block rewards

When a block is discovered and successfully verified, the miners automatically receive a reward for the solving the block. The block reward currently sits at 12.5 coins, but the value is halved every 210,000 blocks, or roughly 4 years.

In addition, miners also receive the fees users pay to send their transactions on the network. It’s also an incentive for a miner to include the transaction in their block, and will help sustain miner profitability when the block reward halve in 2020 and again several years later.

The Bitcoin network processes seven transactions per second, with transactions embedded in the blockchain every 10 minutes. That means miners were being rewarded every 10 minutes, although the waiting time for transactions to be confirmed is currently longer as the number of Bitcoin users continue to grow. Unlike Bitcoin Core, which remains stuck with its small 1MB blocks, BSV has pursued massive scaling and big blocks in preparation for Bitcoin’s mass adoption.

With bigger blocks, the Bitcoin network is capable of handling more transactions and data. Miners also get more fees, the users get faster transactions, and everyone is incentivized to create something better. That’s the economic model of massive on-chain scaling—as Satoshi Nakamoto intended.

Squire advisory board member, Dr. Craig Wright granted US copyright registrations for original bitcoin white paper and early code

Vancouver, British Columbia; May 22, 2019 – Squire Mining Ltd. (CSE:SQR | FWB:9SQ | OTCQB:SQRMF) (“Squire”) is very pleased to congratulate our Advisory Board Member, Dr. Craig S. Wright for the recent issuance of U.S. copyright registrations in his name for the famed original Bitcoin white paper, and most of the original Bitcoin code (version 0.1).

The registrations issued by the U.S. Copyright Office recognize Dr. Wright as the author – under the pseudonym Satoshi Nakamoto ‐ of both the white paper and code.

 U.S. copyright registration no. TXu 2‐136‐996, effective date April 11, 2019, for the paper entitled Bitcoin: A Peer‐to‐Peer Electronic Cash System, with year of completion 2008. The registration recognizes the author as Dr. Craig Steven Wright, using the pseudonym Satoshi Nakamoto.

 U.S. copyright registration no. TX‐8‐708‐058, effective date April 13, 2019, for computer program entitled Bitcoin, with year of completion 2009 and date of first publication January 3, 2009. The registration recognizes the author as Dr. Craig Steven Wright, using the pseudonym Satoshi Nakamoto. The registration covers the portions of version 0.1 of the Bitcoin client software authored by Dr. Wright.

Dr. Wright is currently Chief Scientist of nChain, the global leader in advisory, research and development of blockchain technologies, which focuses on massive adoption of Bitcoin in the form of Bitcoin Satoshi Vision (BSV). Dr. Wright and nChain are working to restore Bitcoin’s original protocol, ensure that the vision for massive blockchain scaling is fulfilled in the form of BSV, and ensure BSV is designed to work within existing legal regulatory frameworks as Bitcoin was created to do.

In the future, Dr. Wright intends to assign the copyright registrations to the Bitcoin Association, a not‐for‐profit organization, to hold for the benefit of the Bitcoin ecosystem. The Bitcoin Association is a global industry organization established for the benefit of Bitcoin businesses and is led by Founding President, Jimmy Nguyen, who is also a member of Squire’s Advisory Board.

Stefan Matthews, Chairman of the Board of Squire has been a supporter of Dr. Wright since 2008 when Dr. Wright showed him a draft of the Bitcoin white paper Wright was working on. “After all these years of dedication and development, we are very pleased to see our advisor, and personal friend, receive the appropriate recognition. We would also like to thank Dr. Wright and Mr. Nguyen for their involvement with Squire.”

COINGEEK TORONTO CONFERENCE
To learn more about Dr. Craig Wright’s vision for Bitcoin and to meet the Squire team, we welcome shareholders and the public to the upcoming CoinGeek Toronto conference, May 29‐30 in Toronto, Canada. The conference focuses on Bitcoin scaling with “No Limits,” and features the world leaders in blockchain scaling. The event will feature a special interview with Dr. Craig Wright discussing his creation of Bitcoin, the Satoshi Nakamoto identity, and why the original Bitcoin design, protocol and “Satoshi Vision” are so important for its success.

About Squire Mining Ltd.
Squire is a Canadian based technology company engaged, through its subsidiaries, in the business of developing and operating cloud computing data infrastructure and system technology to support global blockchain applications related to Bitcoin SV, Bitcoin Core and other associated SHA‐256 derived digital assets.

For further information contact:
Angela Holowaychuk
Interim Chief Executive Officer
Telephone: +1 800‐371‐2809