Polarium ISC

Cryptomining presentation:
Notions of mining and market

September, 2018
Polarium ISC, c.a.

J-411602302
How the Mining is.

Blockchain: the revolution of this decade; capable to guarantee the absolute and irrefutable truth
in a real world increasingly interconnected and with so many reasons to distrust (doublepay, scam,
phishing…). But, how can the technology give us this panacea of trust? In the case of
cryptocurrencies like Bitcoin (BTC from now on), it is done through a type of consensus system called
Proof of Work (PoW)), which consist to use the computing power provided by volunteer members
of the network (Miners from now on) to bring each new coin and block in the chain, an extremely
complex to generate serial number (Hash) and at the same time, related with the serial of the
previous block in the sequence. This number, allow to the programs and applications used for
sending and receiving BTC, verify the authenticity of the operation to get done with just get a look
into the registry in the chain and comparing the data as if it were a large ledger, and being negative
the response, the movement will be rejected without further ado.

Does the above mentioned mean that it is impossible to falsify a BTC? No, a fraudulent BTC could
be generated by malicious person, but, for that work would be necessary more than 50% of all the
computing capacity of this network (and the amount of energy that this implies), making it an
unviable and unrealistic labor.

Generate the Hash for the operations of the BTC network, as we mentioned, requires a high
computing capacity and energy consumption which are paid by the miners and in exchange for it,
they are rewarded with a remuneration in the same asset (this is known as Cryptomining) which will
vary depending on:

1) How many computing power bring the miner to the network.

2) The computing power that the network counts at the moment.
3) The difficulty to generate a new block for the chain.
4) The reward given by generate one of this blocks at the moment.

To this point we could understand the principles of Blockchain applied to the world of
cryptocurrencies and why the mining, but the underlying goes much further. Establishing an
infrastructure with such properties and capabilities requires certain conditions to discuss below.

Heat Dissipation System.

Just like any other electronic equip, the equipment oriented to cryptomining also emits residual
heat that must be dissipated if we look for an optimal working, for this there are a lot of different
methods and techniques (air conditioners, extractors, liquid cooling, etc.) with different pros and
cons, which must be considered according to the user needs. Companies such as Polarium ISC, offer
integral solutions that range from the effective heat dissipation of the equipment, through the
reduction of the frequency with which preventive maintenance must be done to the systems, the
suppression of the sound emitted in comparison with other systems and more there, saving time
and money while expanding the profit margin obtained.
Electricity.

An important part of any mining system is electricity consumption. The farm must be provided with
a sufficient, stable and economic power supply, since the real profitability of the mine will depend
on these three characteristics. If the power supply is not sufficient, the equipment will not offer the
maximum capacity and therefore it will be wasted. By not having a stable and continuous supply,
the effective mining time is reduced, being the amount of assets produced per unit of time smaller.
A high cost per kWh can represent the difference between a farm that produces benefits and a
liability, even decreasing the effective life of the farm. Among the most outstanding places in Latin
America in terms of energy cost to generate cryptocurrencies are:

1) Venezuela: …………………………………………………………..………………..$ 0,01/Kwh or VEF 2073,6

2) Trinidad and Tobago: …………………………………………..….……………….$0,05/Kwh or TTD 0,34
3) Surinam: …………………………………………………………………..……………..$0,05/Kwh or SRD 0,373
4) Paraguay: …………………………………………………………………..………..$0,071/Kwh or PYG 407,52
5) Ecuador: ……………………………………………………………………..………….………………………$0,103/Kwh

The aforementioned countries offer the opportunity to establish farms whose profitability will be
guaranteed for a long period of time. While in countries such as Italy or Denmark, specialized
equipment (Antminer S9i) generate losses to their owners, in Venezuela it is still profitable to keep
them functional.

Cryptomarket and Directionality of Prices.

Technical Analysis

After the huge increase in 2017 in the crypto market value (47 times the previous value) and
taking Bitcoin as a reference because it is positively correlated with the rest of the cryptocurrencies,
exists a high probability that the bearish trend will extend to new minimum beyond the $ 5800
(previous minimum), around 4300 to $ 4500. This area is a very important historical support
suggested by the technical analysis, it is a key area where it can be speculated that many investors
have a lot of bid orders placed there and it could be the point where the correction is completed
(The 78% Fibonacci level and the two hundred week exponential moving average).
 2017 Bullish trend, 2018 Bearish trend, Support levels suggested by the technical analysis,
Level 78% Fibonacci in $ 4200 and exponential moving average of two hundred weeks (Purple line)
Bearish crossing between averages of Twenty and Fifty weeks next to consummate (Red and
Yellow Lines ). Weekly Graph.

It is not the first time that a significant correction occurs in the cryptocurrencies market. In
November 2011, Bitcoin started a bullish run from $ 2.2 minimum to the $ 1163 all-time high
reached in November 2013. Subsequently, a hack was made to MT Gox, the largest Cryptocurrencies
Exchange at the moment, bringing as consequence a huge bearish sentiment that spread
throughout the ecosystem throughout 2014, bringing the price to a $ 154 minimum and ending in
2016 bringing the price to new all-time highs in 2017.

2014- 2015 Bitcoin Correction after MT Gox Hack , Recovery of the Bullish trend after reaching 78%
Fibonacci and two hundred weeks exponential moving average (Purple Line), Bearish and Bullish
Crosses between twenty and fifty weeks moving averages (Red and Yellow lines). Weekly Graph.
September 2018:

At the beginning of the month, the price finally made a confirmation of the bearish flag
pattern that developed since the middle of August making a downward movement of 13%.

Rupture of the lower channel of the bearish flag. 4 Hours Chart

After this bearish movement, the price continued to develop a second bearish flag during
the course of September which has not been confirmed, but if there is a break in it, the possible
support levels are located at $6095 the first support and $5800 that corresponds to the minimum
of the year.

Supports of $6095 (dotted green line) and $5800 (white line) Four Hour Chart
If there is a break in the annual minimum, it is probably that the price will gradually start its way to
the next Fibonacci level (78%), bringing the price to new lows.

The price volatility has decreased considerably, which indicates nothing more than the prelude to a
large movement. In the time frame of one week, it can be seen that the Bollinger bands indicator
shows compression, which refers to a decrease in volatility and at the same time that at any moment
the price can make a big movement, whether it is bullish or bearish.

Likewise, the price has been forming a Descending Triangle pattern, which offers a greater
probability that the break is bearish.

Bollinger Bands Compression, Descending Triangle Pattern. Weekly Chart.

News and fundamental analysis that can influence the valuation of the Cryptomarket

Bakkt

On August 3, 2018 The Intercontinental Exchange of Atlanta (ICE), owners of the New York
Stock Exchange announced the launch of a trading platform for digital assets and futures contracts
in Bitcoin (BTC).

The new platform, called “Bakkt”, will take advantage of the Microsoft Cloud system to build "an
open and regulated ecosystem for global digital assets," which will allow customers and financial
institutions to store, exchange and invest in such assets through the internet.

Ethfinex Trustless

Last September, the cryptocurrency exchange platform "Bitfinex" enabled its new Ethfinex Trustless
exchange platform that will revolutionize the exchange of cryptocurrencies.
The main fear of institutional investors to enter to this market has been the vulnerabilities of the
exchange platforms in the face of hacking, which have caused millions of losses in the ecosystem
because cryptocurrency transfers are irreversible.

Ethfinex trustless is a platform that allows the exchange of cryptocurrency in a decentralized way.
Through this platform it will not be necessary to deposit funds in a centralized server and exchanges
will be made directly between nodes (wallets) making zero the possibility of hacking due to the fact
that the cryptocurrency will never be hosted on a centralized server.

This technology could open the doors to large investors and institutions to enter this market with
greater confidence as this technology completely cancels the possibility that their funds are
compromised by hacking by the fact of entrusting the private keys of cryptocurrencies to a
centralized entity.