The cryptocurrency market has been a true revelation in 2017. The once-niche market has completely dominated mainstream attention this year as a viable path for the future of finance. According to CoinMarketCap, the market reached a new record high of $154 billion this month. But with over 800 digital currencies and growing in the market, and with many of the top currencies trading at significantly elevated levels, there doesn’t seem to be many appealing entry points for the average person looking to participate in the space.
For WRIT Media Group (WRIT), this segment of the market poses a huge growth opportunity, both for the company as well as for the industry as a whole to broaden its base. The company’s Pelecoin cryptocurrency system was designed to be an easy-to-use software platform that allows users to mine a basket of leading cryptocurrencies. The best part of the algorithm is it balances the weighting of the components based on a number of factors to optimize returns.
In addition, the company recently detailed some major innovations it is developing to enhance the overall ecosystem of Pelecoin. Equities.com had the opportunity to speak with Eric Mitchell, CEO of WRIT Media Group, to learn more about the company’s Pelecoin system and its mining algorithm, as well as to gain more insight on the roadmap of innovations going forward.
EQ: Can you provide us a brief overview of WRIT Media Group and your operations, particularly with regards to what you’re working on with Pelecoin?
Mitchell: Our strategy with Pelecoin is to build a platform that allows users to leverage our proprietary algorithm. This algorithm allows for the mining of a bucket of cryptocurrencies simultaneously. It also automatically rebalances the weighting so that if one currency starts to drop or experiences a dramatic increase in volatility, the system shifts mining to the more stable currencies. The goal is to hedge the risks over several currencies thereby increasing the overall productivity of the mining rig. The software can be downloaded for free, but we take a share of the revenue that is built into the algorithm. The algorithm is programed so that people are going to make more money using our platform than other platforms even accounting for the aforementioned share of revenue. The algorithm adapts based on market conditions and hash rates.
Currently, the currency mix includes Ethereum (ETH), Ethereum Classic (ETC), Zcash (ZEC) and Monero (XMR). Over the coming weeks, we intend to add additional currencies for a total of 12 in the bucket, including Bitcoin (BTC) and Litecoin (LTC). Today, no one else is doing this, so we think that is pretty unique.
EQ: That’s a very interesting strategy to this space. How has the progress been so far?
Mitchell: At the end of our first quarter, which ended on June 30, we had about 29 rigs on our system, and generated about $65,000 of revenue. Now, we have over 200 rigs using our system and expect the revenue growth to increase incrementally based on that number of rigs. We’re continuing to grow the number of rigs through the end of the year with the goal of having a couple of thousand-plus rigs on our system enabling stable revenue flow. Once that is achieved, what we’d like to do is start marketing to smaller users, potentially in markets like India or Thailand.
Simultaneous to the rig growth and marketing to smaller users, our next step would be to do a token offering in which we can create and build a functioning community that aligns with the brand of Pelecoin. In doing that, we would also have an ad solution for the industry that we’re working on and some other ancillary things that we believe will make Pelecoin more attractive for users versus other currencies.
EQ: The cryptocurrency space is unquestionably one of the hottest markets in the world right now. Going back to your system’s ability to allow users to diversify their mining operations, can you elaborate on the advantages this provides for cryptocurrency miners and people interested in this space?
Mitchell: Our proprietary mining algorithm is where we are focused. It will allow for an easier and simpler process for someone who doesn’t know how to change over a rig from one coin to another, or doesn’t have the time to do that. It usually takes several hours of installing software, uninstalling software and switching over. This provides a solution where, once they have the software downloaded on a machine, it’s sort of plug and play. It also comes with a switch when they don’t want their machine to mine. They can turn it off and be able to access their machine for other things.
We see this as a needed solution and are really trying to move quickly to capture this part of the marketplace. This may not necessarily be for the savvy, digital currency person who invests a lot of money; it’s more for someone who has a desktop at home that wants to participate in the industry.
EQ: In the early days, when cryptocurrency prices were soaring sky high, no one really was worried about downside risk. However, now that we’ve seen some parabolic moves, as well as some sharp pullbacks, are you noticing that the concept of hedging in cryptocurrency is beginning to become more of a significant consideration?
Mitchell: I think you’re correct in terms of right now. There are obviously over-performing coins and assets that are drawing a great deal of money. But as you saw with Ether, when it went from $400 down to $130, then recently went back up again. If you’re on the other side of that and you purchased a lot of coin at $380 or $390, you’re not very happy. By using our system, you’re able to hedge across multiple currencies and, like I said, eventually we will also add Bitcoin and Litecoin, which are different crypto systems. That will smooth out your returns across all those currencies and provide miners with a premium mining solution.
There is also the ease of switching what you’re mining. If you’re mining Ether and you want to mine Monero or something else, you have to basically uninstall the software, reinstall the new software and set up a new bed of machines to specifically mine that new currency. That process can take anywhere from a few hours to a few days, depending on who is doing it and their expertise. This ability to mine all these different currencies simultaneously allows you to profit from those that are rising the quickest and reduce your exposure to those that are taking huge losses.
EQ: Are you going to allow users to be able to determine their own balance?
Mitchell: That may be a next step. At this point we’re focused on getting the 12 currencies up and running, and using our algorithm to determine mining mix. In the future, we will determine the feasibility of adding software that allows users to switch mining preferences.
EQ: The cryptocurrency universe is rapidly approaching a thousand different digital currencies. How do you determine how many and which currencies to include in your algorithm?
Mitchell: We have financial analysts on our team, and they determine factors such as the volatility of each currency, the age of each, and the price trends over the last several months. It’s very similar to what analysts do with stocks. So, if it’s a new currency, obviously we start monitoring it, but we also want to wait until they are more established. We are looking right now at the top 25 currencies. We’re not looking at anything that has just started, or has no volume in trading, or has a very limited number of coins. We are looking at those that seem to be adopted fairly reasonably by the community and are being used by the community. That is our main focus.
EQ: You mentioned developing some ancillary products and services as well. Can you give us some insight on to those and maybe provide us some information on the roadmap that you have in rolling these out?
Mitchell: Our next logical step is creating our own wallet, which we are working on a solution. A lot of the problems with some of these exiting wallets and trading platforms, are they went from 50,000 users in one month to 2 million in the next month, and there’s absolutely no customer service on the other side of that, at least the type that consumers are used to if they have a bank or brokerage account. We’re trying to do something that is a little more automated and easier for users to move money around, including trading platforms.
EQ: There’s a lot of fascinating initiatives and compelling potential with the things you’ve outlined. Before we go, do you have any final takeaways for our readers as they follow WRIT and Pelecoin?
Mitchell: Our goal is to create something more than just a mining solution. We want to create a brand and a coin that people will want to utilize and not just sit on as an asset or investment vehicle. Our goal is to provide a stable price currency that people are going to use to buy things and implement as one of their primary currencies in the future.
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