Investing in Bitcoin for the Non-Technical Investor

(Medium) (Bitfury) - In the early days, bitcoin was known only to people who frequented cryptography forums. Soon, bitcoin became accessible to those technically advanced enough to run nodes and “mine” the Bitcoin Blockchain. Eventually, bitcoin became more mainstream as more people started understanding, owning and talking about it. Many companies, like the Bitfury Group, were launched.

However, these paths to bitcoin have always required two things: Being an early adopter and having the technical expertise to understand and engage in the network. You had to understand the difference between your private and public keys. You had to know how to run the bitcoin protocol (and how to set up your computing system to handle the work). And, most of all, you had to have heard of bitcoin before it was on CNBC.

Now that mainstream media covers bitcoin on a daily basis, more investors are taking notice. A common misconception, however, is that until regulators approve exchange-traded funds, or ETFs, there are no suitable investing “on-ramps” aside from buying bitcoin. There are many routes potential investors can take to invest in the future of bitcoin — even without a technical background, or without holding bitcoin itself as an asset.

Option 1: Invest in a Regulated Bitcoin Mining Fund

Last week, Bitfury and our partners at Final Frontier, a financial services firm based in Switzerland, launched a fully regulated bitcoin mining fund designed for institutional and professional investors, following authorization by the Liechtenstein Financial Market Authority. The product provides investors with a regulated investment vehicle to gain exposure to bitcoin mining. It was engineered leveraging Bitfury’s world-class expertise in hardware development and mining, and Final Frontier’s experience developing and structuring financial products.

For investors who recognize bitcoin’s potential as an investable asset, bitcoin mining provides an effective way to gain exposure to this asset class through investing in its infrastructure.

Access to bitcoin mining has traditionally posed technological, logistical, financial and execution risk challenges to institutional investors. The new fund addresses these challenges by offering exposure to bitcoin mining via a fully regulated fund in a European jurisdiction, with top-tier service providers. The fund invests in turnkey assets comprised of mining sites with some of the lowest electricity and operating costs globally that feature state-of-the-art Bitfury datacenters. The sites are scouted and operated by Bitfury (Bitfury has a substantial minority stake in Final Frontier).

Option 2: Invest in a Hosted Bitcoin Mining Operation

For the investor who does not have a technical background in bitcoin and blockchain, but is interested in holding bitcoin as an asset, we recommend a hosted bitcoin mining operation. Bitcoin mining is just using high-computing hardware to secure the Bitcoin Blockchain and process transactions, earning bitcoin in return.

It’s not necessary to build and run an entire datacenter to reap these benefits. Bitfury’s BlockBox AC mobile datacenter has the computing power to rival most bitcoin mining operations, and it can be placed anywhere in the world.

However, many of our clients do not want to handle the day to day operations of these BlockBox AC datacenters. Bitfury can install a purchased datacenter at one of its low-cost electricity sites. The client owns the BlockBox AC datacenter and the bitcoin that it generates as it secures the Bitcoin Blockchain — but Bitfury manages the operations.

Option 3: Invest in Bitcoin Companies

Another option for the investor who lacks the technical background in bitcoin — and for certain reasons (risk, portfolio requirements, etc.) cannot or does not want to hold bitcoin — is to invest in public companies that mine bitcoin.

The most well-known of these companies is Hut8 Mining Corp. based in Canada, which is listed on the Toronto Stock Exchange(TSXV). For investors most comfortable investing in bitcoin and the ecosystem through traditional avenues, Hut8 Mining Corp. offers the transparency and regulation of traditional companies while also sitting on the cutting-edge of cryptocurrency and blockchain technology. Hut8’s sites are powered by Bitfury’s industry-leading hardware.

Hence, for investors who do not want to deal with the day-to-day operations of mining bitcoin, but still want to engage in this fast-moving and innovative industry, there are many choices available.

Source: / George Kikvadze / Bitfury Group