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Try how it could be started, the cryptographic extraction has not yet had an Everyman device.
Smart money, however, are bets that will change at the hands of a new company called Coinmine. Announced Wednesday, the launch is revealing its first product, Coinmine One, a hardware device aimed at encryption enthusiasts who would like to earn prizes for mining blockchains – without the need to learn a new set of technical skills.
Backed by investors such as Coinbase Ventures and Arrington Capital, angel investors Balaji Srinivasan (now CTO of Coinbase and a former mining contractor), Anthony Pompliano, a Morgan Creek associate and Hunt Hunt co-founder Ryan Hoover disclosed.
Coinmine One will be retailed for $ 799 and will begin shipping in mid-December, although the company did not want to specify a specific date or indicate a specific sales target. However, CEO Farbood Nivi told CoinDesk in an interview that the company believes its mining product has mass appeal in the market.
Nivi explained:
"We think there is a market for millions, if not tens of millions".
An investor, Chapter One Ventures, has explicitly supported the project because he wants to see more ways to engage ordinary people in supporting the cryptocurrency infrastructure.
"Coinmine will democratize the access to become a miner in a fun and accessible way that almost seems like playing a video game," its founder, Jeff Morris, Jr., told CoinDesk.
Digging into the details
For $ 799, Coinmine One will show off a miner that can generate any of the following outside the box: ether (ETH) at 29 Mh / sec, monero (XMR) at 900 h / sec, zcash (ZEC) at 320 h / sec and classic ether. With updates next year, he also expects to be able to manage a stake for a Bitcoin Lightning, Dfinity or Filecoin node.
It uses about the same power (120 watts) of the PlayStation 3 during the game and works at 40 decibels (silent compared to the cacophony created by other mining products). With a profile like the one above, most people would probably not be horrified by the fact that it was visible in a room that a guest could visit.
More importantly, in an attempt to make the product as user-friendly as possible, the system will be automatically updated based on the changes made to the protocol and the availability of more coins. Users will be able to track their earnings and manage them using an & # 39; app for Android or iOS (see below).
If the company is right and consumers love it, do not look for today's fans today to agree. There is nothing about its specifications compared to other miners sold on the market today that use far more tech savvy users. Coinmine One hash percentage is much lower than those devices and the price for the hash rate is higher.
But these problems, says Nivi, lack a wider point.
Although current miners cost a third more, he says they would still be out of the reach of normal people: those who do not know how to install them or who do not have a place to store and use the hardware will quickly heat up and generate a lot of noise . And they will not know how to update them when the protocols change.
Nivi and his company are betting, therefore, that there are people who want a way to participate in the mining sector but want a lower entry path. Another way of thinking about Coinmine is that it is based on the market concept tested by Honeyminer that works on PC.
The CEO emphasizes the fact that Coinmine One will remove some of the most difficult jobs from users. He said: "The only thing that is consistent in the crypt is that it is constantly evolving and evolving." Coinmine is the only solution that allows it to be part of it continuously. "
Home extraction is difficult
That said, the activity of selling domestic miners has not gone well historically.
Names like Butterfly Labs, Alpha Technology and GAW Miners only include part of a long history of producers of mining products that have not stood the test of time (or have not been turned into a real fraud).
Other companies failed to balance the intensive production process of hardware production with the demands of retail customers – particularly when the realization of that hardware did not go according to plan. Even those who played the game have not been able to survive in the long run, especially when they were competing for the fall in cryptocurrency prices in 2015.
Case in point: a small piece of domestic mining history ended this year when Josh Garza was convicted of telematic fraud.
The Garza company, GAWMiners, left its brand by selling imported mining equipment and subsequently expanded its business by hosting the miners and, subsequently, by offering the so-called "virtual miners" that were later deemed to be titles.
Ultimately, it was Bitmain – with its economies of scale, access to low-cost power and the operation of mining services both on the hardware and software side – which was the best, though other companies emerged with possible margins of competitiveness. And until today, Bitmain still makes budget miners that could be accessible to a middle-class American consumer who owns a large garage (and a patient tolerant noise family).
Yet just take a look at one of these products to see an immediate difference from Coinmine One. The ASIC miners look like huge shoeboxes with a fan in a cage attached to one end, like something that does not really belong to any other than a garage (unless someone wants to try using one to electrically heat it up , a CoinDesk approach once proposed).
More importantly, the previous generation of miners seems that companies have taken their professional versions and scaled up some price, noise and tension, without fundamentally rethinking the design or the ;user.
"If you go to buy these cryptographic devices online, there seems to be a constantly working vacuum cleaner," Nivi said.
At 40 decibels, the Coinmine One should not even be obvious, and, with its low electricity consumption, a user's utility bills should not jump aggressively. Which does not mean that the business will be easier, but supports their case that the devices exist in a new category.
The HODLer topic
The evolution of miners from domestic fans to behemoths on an industrial scale highlights the fundamental business model of a miner: a sort of arbitrage in which profits are realized when the cost of energy is lower than the performance of cryptocurrencies mined and sold.
But Nivi argues that Coinmine One is intended for technology enthusiasts rather than profit seekers – as in, people who want to try different protocols and interact with the communities behind them – despite having some skin in the game . More generally, it is for people with a long-term horizon who are not focused on making enough money to keep the lights on and miners humming.
Coinmine One is also not single-use hardware. That said, you can only run one of the few proof-of-work tokens at a time. With the next updates, you will also be able to run one of the many game test tokens.
This differentiates it from most other miners, built to extract as much as possible from a single coin. Take for example these two ETH miners. They cost twice as much but also provide about six times more hash power.
This could make it look like Coinmine One is a bad deal, but it depends on a person's situation. Someone who lives in an urban apartment, for example, could never manage one of those miners, even if they could afford it.
The startup seems to aim to create a new category of products in the mining sector.
"The real magic of the product is the software and hardware compatibility, which reminds me of Nest or Ring," Morris told CoinDesk, referring to unicorn startups that built home thermostats and home-enabled home security devices. Each was subsequently acquired at unicorn ratings, respectively by Google and Amazon.
Still, the Coinmine One is worth it?
One danger that some users might predict is that many people will buy it by making the tokens that mines are less profitable for each miner. Nivi emphasizes that they will continue to add new tokens, offering users options. Furthermore, it also claims that more miners mean more value for what the miners earn.
"While more people draw a coin, it can reduce the amount of money that you earn, but it also increases the value of the network," he said.
Normally, in the discussion of mining equipment, users calculate how long it will take them to recover their capital expenditure from encrypted profits. In a conversation with CoinDesk, Nivi rejected that short-term analysis.
He said:
"If you do it at home, it's a bad advice to buy and sell, you should really keep it, you're holding it and you're waiting for it at 10X, 100X or 1000X."
Product image courtesy of Coinmine
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