The cluster of block reward halving of three major crypto networks in the second quarter of 2020 has led some to speculate on the prospect of the crypto mining market.
Now more than ever, experts believe that miners must optimize their mining activities to ensure that they continue to rake in profits. For this to happen, every miner must re-evaluate his or her operations and identify ways to improve mining efficiency without incurring more cost.
This may require that they buy efficient rigs, adopt quality mining software, or join credible mining pools.
In light of this, I saw the need to interview an expert in this crypto sector to unravel the true state of the crypto mining market, how the community is bracing for the shrink in mining rewards and the aftermath of the coronavirus pandemic, and the average requirements to run a profitable crypto mining business.
Hence, I had an interesting conversation with Vladimir Shutemov, CEO of CoinFly. Below is an excerpt from the interview.
From my research, I discovered that you have led the CoinFly team since 2018. Can you tell us how much you have enjoyed leading this crypto startup?
We are miners ourselves, and knowing firsthand that miners use the most varied mix of different software, we got together with our partners, and decided to make an "all-in-one" product. And our aim is to cover absolutely all the needs of the modern miner, mining investor, manager, and even financial officer. To answer the question directly, I can say that when we started, we did not expect to dive so deep.
What about the challenges you have encountered? Has there been a time when you almost gave up, considering how the crypto winter of 2018 tested the resilience of emerging firms?
I was lucky with my partners; they believe in the project and we understood that when Ethereum was at 80 and bitcoin at 3800, and all the miners were shutting down and selling their ASICs, it was the perfect time to speed up our product development. I'm confident that the era of mining has not begun yet; certainly, crypto mining and the industry as a whole are waiting for enormous changes and we are ready for POS and for managing private blockchains.
The crypto space is filled with instances where just one event could spark a drastic change in market trends. In most cases, experts, as a result of the short history of the crypto market, find it difficult to isolate these events or even come up with accurate projections. The same applies to speculations regarding the response of the crypto mining market to reward halvings, as there is little historical data available to paint vivid projections. So, I have to ask: What is your take on bitcoin halving, the price of the digital asset, and how it will affect the crypto mining market?
Halving ... My opinion is that most of the miners will go to their forefathers in heaven. The bitcoin hashrate will drop by 30-40 percent. Just so, they will freeze us even deeper during the next Crypto-Winter. Until governments regulate crypto circulation, until there are platforms with clearly defined rules for crypto trading, until each new Arthur Hayes, who boots out his clients and says “oops” without there being any consequences for doing so, our Crypto Winter will plunge us even deeper into chaos, and the whole ideology of crypto will rot under the leadership of the billions-hungry actors like Changpeng, Roger Ver and others like them.
Do you think that the shrink in block rewards of crypto networks will indirectly affect the decentralization of the crypto mining shares of miners and mining pools?
Reducing the remuneration of miners will certainly affect decentralization if it leaves three miners in the universe - China, the CIS, and the US. All those who have free-of-charge hydroelectric power stations.
Since a majority of crypto miners are looking to maximize profit, particularly in this current economic crisis, how does your ecosystem can help miners?
Now process optimization is especially important and our platform helps in this area. For example, we have Autopilot Mode, which allows you to mine that cryptocurrency which is most profitable at the moment. We are also launching an uninterrupted ETH mining pool with Microsoft Azure nodes and 0% commission.
What makes CoinFly different from other crypto mining companies?
I am not aware of products on the market that completely cover all the needs of the miner, especially where the industrial miner is concerned. The tech-geek, the business owner, the investor. All these key figures in the mining business are very intricately connected with each other, and our goal is to provide them with a service that will help them understand each other. It will help the miner manage equipment, repairs, and cost accounting. It will help the manager control the profitability of the business, the accounting of income and expenses, to optimize the cost of electricity and the purchase of materials and spare parts. And the investor will see transparent reporting.
I read somewhere that Microsoft just patented a new way to mine cryptocurrencies. What’s your take on this development? Is the penetration of technology powerhouses a good thing?
Of course, when a major player who is technologically savvy appears in the industry, especially a monster like Google or MS, it brings with it a strong impetus to the industry. New participants will appear, and new investors.
One of the major deterrents for new entrants is the complexity of crypto mining. Do you think that we have been able to simplify crypto mining processes to the barest minimum, and how has CoinFly entered the fray?
We have made the mining process on our platform as simple as possible. Basically, all you need to do is create a CoinFly account, download and install COS, and start mining. All mining management is done via a single dashboard, and there are automation functions. Having a problem? For beginners, our 9:00 am - 7:00 pm (UTC +3) support is always open.
How your company is focuses on transparency, which is often overlooked in other mining ecosystems. As such, your company scrutinizes mining pools before onboarding them. Can you expatiate on this?
We focus on creating and developing our own pools. This allows us to select the complexity of mining for specific equipment on the fly, so the efficiency of mining becomes higher. This is especially noticeable on a large number of equipment types.
The second direction in crypt mining is the integration of partner pools. In this case, we carry out the deepest integration possible, with the transfer over encrypted channels of all service information.
Also, a miner in the system can send a hashrate to any other pool, but then it doesn't get all the advantages of the system. And of course, we are open to partnerships and our key expertise is fine-tuning the system to the customer.
What is the current development status of CoinFly? And what should we expect from you in the remainder of 2020?
By the end of the year, we will be able to show a fully functioning system with all the necessary functionality for an industrial miner, including an automated reporting system in IFRS format, as well as a repair management system. There will be an increase in supported algorithms, pools and distribution of our service around the world.
What will you advise the average crypto miner, especially now that competition is at a peak?
My advice is that average users should pool together and gather in one barricade, so they have the power to buy electricity in bulk and not pay 10 cents per kW. Also, highlighting the section about protecting the rights of users before all sorts of committees and government organizations. But this will not be easy to do, because many miners are not herd animals, but proud and strong individuals.