Cryptomining is a prolific and technologically advanced domain that attracts thousands of entrepreneurs and solo miners from around the world — but how much do we know about the underlying infrastructure? Luckily, I’ve had a chance to chat with Denis Slabakov, a long-time expert in hardware distribution and crypto data center management, and asked him a few questions about how it all works. Denis, a luminary in the crypto mining arena with global accolades, adeptly steers the ship as the CEO of New Mining Company. Under his leadership, the company excels in architecting turn-key cryptocurrency mining data centers, setting a gold standard in the industry. Denis, how did your career path lead you into the crypto data center industry? I initially began my career as an engineer at Hewlett-Packard, and throughout my professional journey, I have always been involved with computers, hardware, and their maintenance in some capacity. When blockchain technology started gaining significance in the industry, I naturally gravitated towards it from the hardware perspective, focusing on creating efficient data centers for miners. Perhaps it was partly accidental, thanks to the connections and acquaintances I had, but it was largely influenced by my prior experience in hardware procurement, distribution, and maintenance. Our clientele consisted of system integrators, data centers, state companies, and other consumers of such equipment. I had the fortunate opportunity to meet the team from Bitfury and visit their data center in Georgia, where I learned about their setup and their work with immersion cooling. Inspired by this experience, I returned home and embarked on building my own data center. We found a suitable location on a former factory site and within six months, our first mining farm was up and running. That was my first encounter with the crypto industry. Given your versatile experience in the field, could you tell us a bit more about some of your international projects? Well, I had been running a company focused on international hardware distribution for a considerable period of time. When I made the transition to the crypto mining industry, our first venture was establishing a data center in Abkhazia. During that time, we embarked on a significant project in Norway that began towards the end of 2017 and concluded in 2018. The decision to choose Norway as our location was primarily based on the fact that the country predominantly relies on renewable energy sources such as hydro and wind power for electricity generation. If I recall correctly, Norway had just one coal-fired power plant at that time, which resulted in relatively low electricity prices compared to the global average. Additionally, Norway has consistently ranked among the top three countries for ease of doing business over the past decade, which was another appealing aspect. We extensively explored numerous areas throughout the country in search of a suitable site to establish our data center. Given the increasing interest in opening data centers at that time, finding an appropriate location was no easy task. However, after much effort, we eventually discovered a site within a region that had excess capacity. We negotiated with the municipality to secure the opportunity to launch our data center. This particular site was part of a technology park, but it required us to undertake all the construction work ourselves. Essentially, it was a brownfield site with no existing structures, situated adjacent to a forest. We took on the responsibility of planning the area, clearing the forest, leveling the site, and making it ready for the installation of mobile data centers. Subsequently, we manufactured the data centers in accordance with Norwegian standards, transported them to the site, and successfully launched operations. The experience I gained from my involvement in real estate development, particularly in constructing apartment complexes, proved invaluable in this endeavor. It allowed us to effectively plan the area, carry out necessary site preparations, and ultimately bring our mobile data centers to life within the technology park. Was it difficult for you to negotiate with the local authorities concerning this crypto data center project? You know, this part was not especially challenging. The difficult thing was that at that time, a lot of companies were looking for an opportunity to launch a data center in Norway. And so, there was tremendous competition. When it comes to conducting business with foreign entities, Norway has always been, and likely still is, very open and receptive. They were receptive to our proposals and facilitated the process quite smoothly. Naturally, there were some nuances that we had to adapt to, such as the working schedule and the business approach. However, these are normal aspects that vary from country to country. How would you describe your experience doing business in different countries? My initial exposure to the Nordic countries was through Denmark. Well, technically, the first foreign partnership my company entered into was with a French company, but later on, the French company was acquired by the Danes. In terms of mindset, it was somewhat easier and more straightforward for me to reach an agreement with the French partners. However, when the Danes came into the picture, things became a bit more complex. I mean, there weren't any major issues, but there was a period of adjustment required. Based on my experience, our perception of information and business culture is closer to the French. On the other hand, with our Nordic partners, we encountered some differences that took time to resolve. It's evident that there are varying mentalities and approaches to conducting business. Each country around the world has its own distinct characteristics. The way business is conducted in China differs greatly from how it is done in Norway, but it's still possible to establish successful business relationships in both countries. For instance, the Norwegians are known for being open and organized. One aspect that fascinated me in Norway is that the entire country is uniformly developed. If you visit the Norwegian countryside, you'll find a well-established infrastructure with numerous facilities, equipment, contractors, and highly skilled professionals who can assist you with various tasks. I've also had the opportunity to learn about German manufacturing facilities, and I must say that the Germans are among the best when it comes to engineering technology. Their production processes are impressively well-structured and organized. I've visited several factories and was truly amazed. Do you remember a challenging project with a crypto data center where you tackled substantial issues? Could you share your experience on how you eventually resolved them? Absolutely. We ran into some challenges when setting up and running a data center in Abkhazia. The main issues were the heat and noise near residential areas. For the heat, we had to figure out the right air intake and exhaust setup from the get-go. The data center was in mobile containers, and with the limited space, we had to try several times to get more air in. Eventually, we got the air coming in and going out just right to avoid any pressure issues that would mess with cooling the miners. The miners have fans to push air, but they can't create pressure. In a data center that's cooled by air, the goal is to have the same air pressure at both the entrance and exit to keep the miners cool. And because the space was tight, we needed to make sure the hot and cold air didn't mix. This meant separating the incoming and outgoing air, equalizing the pressure, and ensuring they didn't mix, especially since the exit and entrance were close to each other. It took some technical tweaks to get this right. Though the fixes were straightforward — mainly rearranging the ventilation — it took a few tries to find what worked best. Noise was the other big issue. In Abkhazia, a single noise barrier did the trick. However, in Norway, it was tougher because homes are spread out, making it hard to find a spot far from residential areas for the data center. We checked out over twenty locations, but all were near homes or would require setting up in remote areas like mountains or forests, which would be really expensive. Due to nearby homes, we had to meet Norway's low noise levels, similar to office space noise from about 100 meters away. To tackle this, we built a system of three corridors, each within one another, and the outermost made of wood and lined with sound-absorbing material. Only after building the third corridor did we manage to bring the noise down to acceptable levels. The crypto data center was naturally noisy, especially with high-frequency sounds that are hard to block. We had to design chambers that would trap the sound but still let air through for cooling. On top of these, we also had to deal with viruses. Our data center, serving many clients, often received equipment that carried viruses affecting the miners and stealing money either from us or the clients. We set up a multi-level check-in system for equipment. New equipment would be quarantined and checked for viruses before joining the main system. But with viruses getting trickier, we had to essentially keep each miner in its own network segment to prevent any interaction with other devices on the network. Even though miners are just servers, managing security was tougher than in a traditional data center since there were many more potential points for viruses to enter and spread. Could you tell us more about your future plans? What are your upcoming business objectives? Well, my plans involve growing a data center management business in the United States. Over the past five years, I have gained extensive experience in data center management. Additionally, we have developed our own software that efficiently handles daily operations for our customers and resellers. Given my background in managing data centers across different territories and countries, my goal is to bring this expertise to the United States and establish a collaborative partnership with a trusted associate. Currently, our customer base is predominantly situated in Europe, China, the US, and Canada, allowing us to serve clients from various parts of the globe. Hence, in the near future, my aim is to identify a reliable partner and jointly enhance our capabilities to effectively manage data centers in the United States.
