The management at DMG Blockchain Solutions, a Vancouver-based full-service, diversified blockchain and digital assets firm, recently shared their views about crypto regulations and the mining industry – exclusively with CryptoCoreMedia.
CryptoCoreMedia: Tell us a little bit more about DMG Blockchain Solutions’ mining-as-a-service (MaaS) operation now that it’s been operational for almost a year – have you seen a growing need for MaaS?
DMG Blockchain: “DMG was founded as a diversified blockchain technology company. We have built one of the largest crypto mining facilities in North America, acquired Datient Inc. the developers of data analytics and forensic software products Blockseer and Walletscore, and teamed up with IBM to develop and deploy Wazabi, a blockchain, AI based platform to manage global supply chains for regulated products.
DMG built its own 85MW substation and currently has access to 60MW, enough to power a small city. DMG provides hosting for clients in Japan, Canada and the US, and the approximately 11,500 miners we are currently running accounts for about 20% of the facility’s total capacity. As bitcoin prices rise, or new mining technology is deployed we see an increase in demand for our hosting services. We are seeing this increase now, just as we did before the last bull run of 2017. It is a balance act though as having this amount of readily accessible power is an advantage for DMG, but we need to weigh the opportunity cost of allocating to low margin clients versus waiting for a higher margin clients, as bitcoin price rises.”
CryptoCoreMedia: You seem to have a few projects that are focused on regulating and verifying supply chain, do you see blockchain as the large-scale fix to a lot of the world’s supply chain gaps?
DMG Blockchain: “The first use of blockchain was bitcoin, but the ideal use case is for supply chain management, especially of regulated products. Wazabi is a platform being co-developed by DMG and IBM and will utilize blockchain, artificial intelligence and machine learning to improve business intelligence and efficiencies for the global regulated products industry.
Blockchain technology provides immutable provenance, or chain of custody, which vastly improves supply chains for any product. An example of this would be how when a product is moved from source of production through the supply chain, and ultimately to the consumer or buyer, there are many insurance providers responsible for that product at different stages of the supply chain. When something goes wrong, it’s a challenge to determine exactly where the problem occurred and therefore which insurance provider is responsible. Implementing blockchain into supply chains will ensure irrefutable proof and accuracy.”
CryptoCoreMedia: Is the crypto industry having a green crisis? What should companies take into consideration when choosing their energy sources? (i.e. the substation).
DMG Blockchain: “Yes, crypto mining requires a lot of global power, yet it is no more than any other payment process. Comparatively, bigger companies like Visa use way more power than Bitcoin.
Companies just need to be smart about their energy consumption. Bitcoin is energy hungry, yet most of its mining is done using renewable energy sources. For DMG, we use hydropower. In the future, it’s important companies look to see how they can reuse the mining machines themselves, rather than them serving as single-purpose (only to be put in a landfill, later down the line). We’re starting to initiate that with various governmental projects, such as a stablecoin network/blockchain, secured by used ASIC miners performing transactions, to power the entire ecosystem for legal cannabis supply and sales within a country.”
CryptoCoreMedia: We are seeing more and more industries work side-by-side with blockchain companies to create solutions. What industry do you think has benefited the most from the technology vs. where is there an opportunity still to be tapped?
DMG Blockchain: “Examples of blockchain companies flourishing include, IBM’s FoodTrust, which has really improved the food supply industry, TradeLens which has transformed the shipping/custom process, and various banks who are tapping into blockchain to aide with payments, worldwide.
To be tapped? Any high value or luxury industry. Blockchain assists with any products where provenance is a requirement, such as with controlled products. Another example for blockchain use would be for identifying blood diamonds, within suply chains. There is a huge opportunity here.”
CryptoCoreMedia: Where is regulation heading?
DMG Blockchain: “The more blockchain is used and adapted as an application and an investigative tool across industries, governments, and law enforcement agencies, the sooner regulation will soon follow.”
CryptoCoreMedia: What can we anticipate from DMG in the long-term?
DMG Blockchain: “Cryptocurrency is often referred to as a ‘craze,’ but the underlying technology that helps crypto work, blockchain, has etched itself down for the long term. We currently focus on forensics, enterprise software platforms and mining, as of now, but we’re excited to grow those practices areas as the industry changes – just how the internet grew and adapted in 1994.”