Malachi Salcido is a Wenatchee High School graduate who has become successful in the emerging market of cryptocurrency. “Opportunity is rarely convenient, and you often don’t see it coming,” Salcido told students in Jeff Leavitt’s economics class.
After high school, Salcido graduated from Wenatchee Valley College with a 2-year technical degree in HVAC. After working for few years, he went back to college and earned an accounting and finance degree. He found he was making less as an accountant than he had as an HVAC technician, so he started his own HVAC company—Salcido Connection—on the side. His company became known for its entrepreneurial attitude. Salcido liked to take on unusual projects that required design.
His big opportunity came with the emergence of cryptocurrency. Cryptocurrency is a digital, peer-to-peer cash system, funds are locked in a public key cryptography system requiring a key or code to unlock. Cryptocurrency requires unique servers constantly running, requiring large amounts of electricity. In 2013, Bitcoin, one brand of cryptocurrency, really took off. Salcido called it Bitcoin Wild West 1.0. “People came here from around the world for cheap electricity.”
Wenatchee High School juniors Nancy Gutierrez and Mason Kyser watch as Malachi Salcido illustrates that every transaction has a "middle man" — like Paypal or Visa. He explained that cryptocurrency cuts out the middleman, cutting down on the cost of financial transactions. Mason Kyser learned worked with Salcido last year at Wenatchee Valley Technical Skills Center, where he studied cryptocurrency and blockchain technology.
He explained that people in different parts of the world conduct business differently than we do here in the United States. Bribery, for example, is business-as-usual in some countries. Utility officials, however, don’t include bribery in their business models. That’s when they called Malachi Salcido.
He became the middle man, walking people from Asia, eastern and western Europe, Canada and Latin America, through the process of scouting for server farm locations, and the permitting process for setting up business. Salcido went through this process several times, but each time his client decided that it took to long and cost too much, so they gave up.
Salcido decided to take on the projects himself. And that’s how he got into the business of cryptocurrency server farms. He formed a separate company – Salcido Enterprises, LLC – to be the parent company for all of the blockchain and cryptocurrency ventures. This company operates separately from The Salcido Connection, which is still a full-service mechanical company here in the region. Salcido Enterprises is one of the largest regional cryptocurrency server farms in the nation.
“It is significant for our students to understand the delicate balance between fostering emerging, infant technologies industries, and regulating those industries,” economics teacher Jeff Leavitt answered when asked why he asked Malachi Salcido to present to his economics students. “We have been studying how governments need to protect vulnerable consumers/investors but not squash innovation with unrealistic regulations and fees.”
Wenatchee High School senior Xavior Bentley says he knew something about bitcoins before Salcido’s class visit. “I know what most people know,” Xavior said. “It’s a cryptocurrency, and it takes a lot of effort and money to mine it. I know it’s very profitable, too. It something that’s growing and becoming more important.” Xavior thinks he would invest in bitcoin, if he were financially able.
Junior Aiden Travis, wasn’t quite so enthusiastic. “It’s new upcoming stuff,” but when asked whether he thought he would invest, “Probably not. It feels kind of hit and miss. I don’t think it’s worth it.”
Salcido explained to the economics students that when you purchase something online, there’s always a middleman taking a cut, whether it’s eBay, PayPal, or Visa— where 1-4% of a transaction goes to the intermediary. Cryptocurrency eliminates the middleman. It’s a peer to peer system. The servers, however, who manage the transactions, take a tiny bit of the currency—less than 1%. Salcido estimates that worldwide fees could add up to trillions of dollars.
His ambitious business plan for Salcido Connection is to build and maintain 10% of the cryptocoin network worldwide with the largest epicenters.
“Won’t that make you like Bill Gates?” asked one student.
Salcido smiled. He is also quick to point out that this techno-currency is in its infancy, calling the current timeframe Bitcoin Wild West 2.0. Stability will come about, he predicts, but now currency value is volatile. Opportunities on the bleeding edge of include not only server farms, but application development. “People who can write applications for monetized code and software, which no longer resides on a hard drive, this is a whole new canvas.”
After the presentation, Xavior Bentley said, “I definitely realize it’s a lot bigger in scope than I originally thought. It has greater opportunity than I realized.”
“I understand it better,” said junior Aiden Travis. “But it’s still complicated. It still seems still a little risky for the money you pay into it, especially if you’re not a business. Solo, I wouldn’t do it.”
When asked what big idea he hoped the students would take away from the presentation, Salcido’s answer was only partially about cryptocurrency. “That they would know a little bit more about this technology, and that this region is going to be one of the epicenters for the development of this tech,” he said.
Even more important, he said, he hopes the students would realize that they could become successful right here in the Wenatchee Valley. Business skills coupled with hard work can create success. “People think they have to go somewhere else to get the big shot, the great opportunities, to be part of something new and emerging like this. I hope they get a little bit of a vision that now that can increasingly happen here.”
UPDATE: Shortly after Salcido visited Leavitt’s economic class the Chelan County PUD stopped all applications for power to new cryptocurrency operations. Effective Monday March 19, the moratorium on applications will continue through at least May 14, when PUD commissioners will hold a public hearing.
“It impacts how much more we will build and develop here versus other locations in the Western United States, Salcido said of the moratorium. He says he has worked with the utility for the last four years, helping them to craft policies that provide for technology development without allowing unhealthy levels of unsustainable build out. “Between now and then will continue to build out existing facilities and we will be developing new projects in the Western United States.”