- Coinmine, a startup backed by Coinbase Ventures and other investors, rolled out a new crypto mining device that allows users to mint cryptocurrencies at home.
- The device now allows users to mine Ethereum, Ethereum Classic, Monero, and Zcash, though not yet Bitcoin.
- The launch comes at a time when mining cryptocurrencies at home is difficult to do at scale, in the wake of falling crypto prices and rising energy costs.
For $799, you can mine cryptocurrency at home.
Launched this week, a new gadget called Coinmine One gets rid of the traditionally cumbersome mining process.
Instead of manually assembling multiple computer graphic processors, downloading the software, and setting up a crypto wallet, all you need to do is power up the device, connect it to WIFI, and tap your phone to choose which coin you want to mine.
For the initial launch, Coinmine One allows users to mine Ethereum, Ethereum Classic, Monero, and Zcash – but not yet Bitcoin. With further updates, it will support Grin, Dfinity, Filecoin and Bitcoin Lightning, the company said.
Unlike most specially-designed, unwieldy mining rigs, the Coinmine One device is smaller, handier, and quieter. The device is the size of a PlayStation video game console with a sleek Apple-esque design and comes pre-assembled. You can simply use a mobile app to control the device, which also doesn’t produce roaming sounds when turned on.
With a white, transparent cover, it looks like a compact computer case and is powered by an operating system, dubbed MineOS, which updates automatically to support a variety of crypto networks. It also consumes a relatively small amount of electricity at 120 watts per hour, according to the company,
The device is aimed at overcoming one of the main challenges in crypto mining – the high barriers for ordinary people to enter, said Farbood Nivi, cofounder and CEO of Coinmine.
“Crypto is about decentralizing information and money with decentralized computing,” he said. “The more you can support the decentralization, the more people can support the decentralizing power, the more secure, powerful, reliable and valuable crypto becomes.”
Nivi likened the potential impact of Coinmine on the crypto world to the influence that Apple had on the PC industry.
“We were like Apple computers back then, an easy way to access the Internet,” he said. “Easy to participate. You don’t have to be an expert.”
The device has a power of 29 megahashes per second(MH/s) for Ethereum, 900 hashes per second (H/s) for Monero, and 320 solution per second (Sol/s) for Zcash. To put that into perspective, if turned on for a year, the device can mint an ether, which is the cryptocurrency powering Ethereum, up to three Monero, and half a Zcash, according to Nivi.
The company has raised $2 million to-date and is backed by Coinbase’s venture arm as well as angel investors like Coinbase’s chief technology officer Balaji Srinivasan and Tinder’s chief product officer Brian Norgard.
The new launch comes at a time when it’s harder to turn a profit mining crypto, particularly at home. According to research firm Diar, bitcoin miners amassed $4.7 billion in revenue in the first three quarters of 2018. But with crypto prices falling and an increase in computing power competing for mining rewards, profitability has dropped.
Mining, in general, is a process of solving complicated math problems to get compensated by new coins, like bitcoin or ether. Machines run 24/7 to execute a protocol to resolve those math problems. The first computer, or a group of computers, that solve the problem can receive slices of the currencies in return. In the midst of the cryptocurrency craze, sophisticated investors set up machines at home to mine those digital assets and sell them, in addition to trading cryptos on exchanges.
Whether you can make money depends on the efficiency of the mining rig, the cost of electricity, and the price of the cryptocurrency.
In bitcoin mining, the industry has been rapidly evolved, with miners using gears equipped with specially designed mining chips, called ASIC, short for application-specific integrated circuit.
But even with those advanced kits, it would still be hard for miners to be profitable at scale, according to Silicon Valley venture capitalist Bill Tai, who is also a board member of BitFury, which produces mining hardware.
“You have to be able to source electricity at scale and at prices of less than 10 cents,” he said.
According to a report by advisory firm Fundstrat, the breakeven price for bitcoin mining is $7,300, assuming that miners are using the powerful bitcoin miner Antminer S9 ASIC and paying an electricity cost of $0.06.
“What’s at the heart of the crypto mining industry is a hash rate battle and a low energy consumption battle,” said Martin Leblanc, founder and CEO of Nuvoo, a Canadian cryptocurrency mining company.