HydroMiner is a company that is working in the field of cryptocurrency mining.
Our goal is to conduct crypto mining on a large scale using solely renewable energy resources and become Europe’s biggest sustainable mining operation.
Cryptocurrency mining is the process of adding transaction records to Bitcoins public ledger of past. This ledger of past transactions is called the blockchain as it is a chain of blocks. The blockchain serves to confirm transactions to the rest of the network as having taken place. Mining is intentionally designed to be resource-intensive and difficult so that the number of blocks found each day by miners remains steady. Miners participate in a race to validate these blocks, the first miner to validate a block receives a fraction of the cryptocurrency as a reward. In the early days of cryptocurrencies, you could mine on your home computer but these days are long gone. Now you need to order highly specialized hardware; the Chinese manufacturers where we buy our bitcoin miners give out prices on a per diem basis that varies depending on a lot of things including the price of bitcoin.
During the time my sister started mining in our apartment back in 2014 it became clear to us that crypto mining needs vast amounts of energy. We had the idea to put our hardware directly into hydropower stations, where we could avoid the grid costs and get a very low energy price (through expired governmental subsidies for small hydropower stations after 10 years. And most important, the energy is drawn from a renewable source which means a great deal regarding the vast amounts of energy used for crypto mining. Hydropower stations are an extremely convenient environment for our miners, the ones we choose to have a suitable temperature as well which is important for the mining as well. Cooling costs are getting reduced this way.
We started to expand the team, beginning with other miners for technological improvement and private investors for the seed capital structure. After that, we were able to rent our first hydropower station near Vienna, in Schönberg an der Kamp. With a successful ICO (Initial Coin Offering) in October 2017, we raised around 3.5 Mio USD. Investors received H2O Tokens which function as vouchers for mining time in HydroMiners facilities. In our H2O mining portal, the H2O tokens can now be redeemed.
In our shop customers can purchase mining contracts with fiat money and cryptocurrency, choosing from Bitcoin, Bitcoin Cash, Ether and Ether Classic (https://www.hydrominer.org/).
With the funds raised in our first ICO, we fully equipped a new facility near Waidhofen an der Ybbs with mining hardware. These two hydropower stations combined have a constant output of around 800 kW. We are able to produce around 300.000 USD (numbers of December) in these power stations per month by mining Bitcoin, Bitcoin Cash, Ether and various altcoins.
The crypto mining process requires stable energy 24/7, because of that hydropower is the most suitable renewable energy source since solar and wind power are too unstable.
Usually, we rent base energy of the power stations to supply the computer hardware with power and to cool it down. Currently, we work only with power stations that are privately owned since the decision making is a lot easier and faster this way. Most hydropower station owners got a guaranteed price of up to 10 cents/kW from the state for their energy, when these subsidies run out after 10 years they are forced to sell their energy around 3 cents/kW to the power utilities. Here we step in and offer them an attractive price. Our business model is simple but highly profitable at the moment, the ROI is currently reached after 4 months [15.01.2018].
Recently I attended a workshop at the World Bank in Washington DC about disruptive technologies in the hydropower sector with private and public decision-makers, service providers and equipment manufacturers. I talked about the business model of HydroMiner and how it can serve as an economic opportunity for hydropower stations in the abundance of a grid, in remote or yet undeveloped areas, where hydro mining can be an immediate profitable use case for the energy when infrastructure around it is just emerging.
Basically, the entry barriers for this business are not high but at this point of the development of the market, you need specialized knowledge to participate in the mining network providing a high amount of computational power.
The purchasing of the hardware can be a bottleneck, there are times when the demand succeeds the supply. The hardware market these days is more complex and diverse now than a few years ago. The Chinese still produce the most stable and effective equipment, but smaller manufacturers try to enter the market as well.
Another challenge is the infrastructure. When setting up a new mining location it needs intensive work to equip the hydropower station with the required connections for the mining hardware, this is not a `plug and play’ process.
A certain level of temperature must be reached and hold, it needs experts to construct an airflow that is effectively cooling the equipment and not requiring this much energy. If it is allowed, water from the rivers can also be used for cooling down the equipment.
We experiment with the usage of the waste heat that is produced by the hardware, for example heating a factory hall. The power stations we use can be in remote places as long as there is a stable internet connection, so there is a lot of room for experimenting with this new form of business in terms of integrated energy.
We think that the Blockchain Technology has a great potential as well as the application of cryptocurrencies on top of it. Because of that, we use resources to build the infrastructure for this revolutionary technology. We help produce a good which has great value for a lot of people.
Another point to consider in terms of energy consumption is that future hardware will become more efficient and we see a growing trend by mining operations toward finding competitive advantage via greater energy efficiency and resource optimization.
The usage cycles of the hardware are now 2 – 4 years, in the beginning, this was much shorter. Computational power provided by advanced data centers will become more and more significant for the business world in the future – one of the most interesting use cases is the emergence of AI technology and with it the deep learning calculations.
Currently we work on the first real security token offering in Europe. This new form of token will have a full capital market prospectus complying to European financial law. The pricing mechanism of this token is similar to the one of a share. The basic thought behind this token is to create an instrument similar to a share that enables shareholders and H3O token holders to be aligned in their interests from the start.
The future plans for HydroMiner include a listing on a stock exchange and an IPO because we experience such a big interest from both, crypto-experienced investors and those who want to join through institutional platforms.
Author: Nadine Damblon, CEO HydroMiner, [email protected]