The word ‘mining’ has become mesmerizing for many cryptocurrency enthusiasts and those who had never heard a thing about bitcoin, Ethereum, and other altcoins. Media report that graphics cards are short on supply, while companies selling professional mining equipment can’t handle the flood of orders.
No wonder new players that can quench this thirst for mining devices enter the market. ForkLog contacted Alexander Chechuga, CEO of Acronym Systems, and Matvei Sivoraksha, CTO of Acroym Systems, who found themselves in the middle of this mining hype.
FL: How did you come to the mining industry?
Matvei Sivoraksha: I was in the ninth grade when a friend of mine approached me and told about a very interesting thing that computers could ‘count’ and get some coins for that. The very availability of coins made me happy for some reason, even though most of them were worth nothing. That’s how I met mining for the first time. We spent a lot of time on searching for new coins that we could count. We had thousands of peercoins, we traded nonsense at MintPal, and mined coins by the score.
My friend and I even begged our parents to buy us graphic cards, but, of course, they refused, even though the return on investment back then was about just a couple of weeks. It all ended up with my father confronting me about electricity bills, which were pretty fat.
I got lucky to subscribe to lots of cryptocurrency communities, so I could keep track of the industry.
Alexander Chechuga: A few years ago I stumbled upon some features on bitcoin and got interested. Then I became interested in blockchain, though it all looked to me like a bunch of complexities. But later on, the spirit of entrepreneurship played its role, and I came up with a few interesting ideas. But I felt I was lacking expertise, so I started looking for someone who was good at that. I wrote lots of announcements in various communities, and once a guy with balloons on a userpic replied. I didn’t take him seriously at first, but later it turned out he had an interesting project.
I started delving in the matters, and then I met Matvei who told me about mining and described the profits. I liked it, so I began looking for money that could fund my first farm. Eventually, we built our first monster which, as we expected, should have paid for itself in a month or two, and proceeded with mining. It didn’t last for long: the farm has lived for two weeks and attempted to burn a few times because it was made of old junk like HD7950 cards. It has burnt all wires, and the endeavor failed, but we couldn’t stop. I started reading online publications and attending conferences to understand the thing better. And then I thought, like, why don’t we build another farm that would work this time, and sell it? That’s how it all started.
FL: Obviously, people who claimed bitcoin was a Ponzi scheme a year ago, have changed their minds. Are they mostly interested in mining now?
M. S.: There are different kinds of people: those who are interested, and those who seek profits. Unfortunately, most mining enthusiasts aren’t really rich, so their interest stops at one or two farms, though there are some exceptions. Mining is a greedy industry. But it matches the theory of games in our decentralized ecosystem.
FL: What do they usually mine?
M. S.: Most of them heard something about bitcoin and Ethereum. They come and say: “I wanna mine ether,” and nothing else matters to them. But it’s wrong. Aside from Ethereum, graphics cards can mine dozens of other coins like Monero, LBRY, Decred, Pascal, etc. Even CPU mining is still kicking with Zcoin. But, however, there are asics for coins like Bitcoin, Litecoin, and Dash.
FL: What’s the industry’s specificity in Ukraine?
M. S.: In terms of mining, Ukraine is a ‘poor China.’ It’s awful to see such crowds buying GPU farms. The Ukrainians have bought nearly all cards in Poland, which, in its turn, has bought everything from Germany. But it actually reinforces decentralization, as there are lots of different and interesting people.
FL: What is Acronym’s place in this diverse crowd?
M. S.: It’s hard to say, we’re not the biggest farm producers in Ukraine. But once, when ETH was under $50, we sold 0.3% worth of all Ethereum farms. It’s just not interesting for us to assemble farms. We have tried to create our own ASIC, and we have package solutions for GPU farms with cooling. We’d love to make mining closer to the real economy, and lead it away from the underground, so we’re going to introduce our boiler cauldron that will mine cryptocurrency and heat up water at the same time.
A. C.: We’re expanding the team, looking for engineers, microelectronics experts, economists and simply cool inspired people. There are 13 people in our team now, we’re going to make it 30 by the end of this summer, and launch a full-scale production line. We have a few working prototypes of GPU farms that could be used for smart computations. They will be very powerful machines with high-performance processing units that could service distributed computation projects like Golem or iEXec. We plan to create a hardware infrastructure for such projects, and be among the first capacity suppliers in this market.
I believe calculating hash is important, yet this enormous capacity that we see in Ethereum could be used smarter. Aside from that, we develop package solutions for GPU mining, for now it’ll be a 150 kV solution. By the end of the summer we’ll release the first batches of our GPU Asic. Currently we’re trying to get more chips from AMD and NVidia as there is literally a war for this gold.
FL: Do you believe that distributed computation is the future?
M. S.: Up until now, mining was reduced to random search of hash, and megawatts of power were burnt just for that. We’re approaching a new trend of using this enormous power for something useful, like we see in Golem, iExec, Sonm, Sia, or Storj. By cooperating with infrastructure developers we’ll be able to create new giants that could compete with AWS or Google, and with any other cloud service.
FL: Speaking of asics, there’s an opinion suggesting that industry-scale mining resulted in centralization of the network. Do you agree with that?
M. S.: When chips designed specifically for mining enter the infrastructure, it is bad for the competition as the entry threshold in terms of technology is pretty high for new players. It limits fast accumulation of capacities due to physical limitations of chips manufacturing. Still, there is a positive side to that, because asics signal that cryptocurrency is entering its “stable” phase.
A. C.: As for bitcoin, only three manufacturers of chips survived: Bitfury, Bitmain, and Avalon. It’s sad, but the biggest manufacturer here is Bitmain of China. In order to monopolize the market, they engaged in predatory pricing, and now their asics are the most economically effective, which is hard to compete with. Developing an asic chip costs nearly $20 million, so the entry threshold is very high, and only big companies can afford manufacturing such equipment. I believe it’s an inevitable evolution of the industry that, on the other hand, leads to monopolization.
FL: Ethereum developers are working on Proof of Stake, which is said to be capable of destroying ETH miners. What could it mean for the entire infrastructure?
M. S.: When the consensus is attained via PoW, it creates three branches: stakeholders, miners, and developers. This combination implies that everyone may influence everyone. In case of PoS, miners and stakeholders are mixed, which destroys one of those branches, even though the true decentralization was possible only when PC processing units were engaged in mining.