Coin Rivet recently spoke with the CEO of Cudo, Matt Hawkins, to discuss the current state of the crypto mining industry and the future of Cudo. Matt comes from the service provider and data centre industry, and has since established Cudo Ventures and Cudo Mining.
The state of mining
In light of the recent surge in the crypto market, Matt commented on how the mining side of the industry has picked up too. Matt revealed that the revenue for some of the mining cards has more than doubled, indicating a key turn around in the mining sector.
While some places in the world such as Sweden or Kazakhstan have low electricity costs and remained profitable, other parts of the world with higher costs have not been so fortunate. But now “pretty much everywhere with the right hardware is profitable,” notes Matt. “It’s starting to get back to 2017 days, which is a good place to be.”
Most of the hardware managed by Cudo is in the GPU side. According to Matt, cards such as the GTX 1080, are currently earning roughly $45 per month.
Cudo has plans to add a few profitable features which “will up that price to maybe $50-55 per month”. More powerful cards, such as RTX 2080 ti, boasts up to $60-70 per month running 24/7.
Matt commented on the lowest point that Cudo saw, which was as low as $15-20 on the 1080 ti. This helps to showcase the dramatic improvement on profitability rates.
It depends where you are situated in the world right now, but Matt believes that in the current market climate it would only take 18 months to recoup investments into mining gear. With prices potentially about to soar, “the best time to buy is now”.
— Cudo Miner (@CudoMiner) December 10, 2018
Matt prefers equipment that helps the environment and he likes to look ahead at the long-term. He notes ASIC and standard mining isn’t really helping the environment, but it is helping a new type of economy which is needed.
A few years back the top 24 service providers such as Google invested $75 billion into building new data centres and cloud platforms. Matt goes on to say that, “if we can start to use this infrastructure, it’s going to save a lot of the planets resources”.
He views the current state of mining as “version one” of what you need to run a blockchain, but going forward he’d like to see devices do real computing – whether it be from an ASIC, GPU or FGPA.
At present there is a lot of computing being conducted inside of data centres which wastes energy. Even more energy is required for them to cool down. He believes if the next generation of ASICs are using tensorflow, artificial intelligence (AI) or other workflows which are relatively static, this would provide a good use case for a new direction in mining.
“You need to support the current mining economy and as mining progresses we can get it doing better things,” he adds.
He provides the example of Ethereum – which is very expensive to run computational tasks on. While the cost of gas to use smart contacts is relatively fine, to compute on Ethereum costs an “absolute fortune.”
For Matt, it would be great if Ethereum and other chains began to use more computing on the blockchain. He also claimed that it would be great if Ethereum’s upcoming ProgPow released an additional version designed for ASICs. This additional version should support real computing that’s the equivalent of mining – “which is the way the industry should go”.
When discussing Monero’s regular hardforks and Ethereum’s upcoming ProgPow, Matt explains how these type of events only occur for coins which were not designed for ASICs. He appreciates these types of events because the creators are sticking to their guns on what the respective blockchains were meant to be about.
“I think it’s a good thing they’re keeping to what the original agreement was, because that’s what the people who were supporting the project were expecting. Plus, it enables people to use any type of hardware to mine which ultimately offers more exposure for adoption as more people can get involved.”
— Cudo Miner (@CudoMiner) August 17, 2018
Decentralisation is an important aspect of crypto mining and, for Matt, with more adoption comes more decentralisation.
When people see centralisation forming it is typically from mining farms, however, “as more and more people adopt this it becomes harder for the larger farms to have an impact”.
“As you get more adoption you inherently get more distributed on the computing side. Over time as you see more adoption you should see more decentralisation.”
Coin Rivet recently attended an event and heard rumblings from attendees that if China – which has consolidated a large majority of the mining hashrate – turned off its rigs, the Bitcoin network would collapse.
This sentiment isn’t quite true, and when asked if we need more education on crypto mining Matt agreed.
“You can read in the forums there’s a lot of misunderstanding and assumptions. It would be great to have a bit more openness about the statistics – there’s no central source of information where you can view the central stats across all the different chains.”
“If we are going to get mass adoption you need people to understand it to an extent. You need a clearer understanding that’s easier for people to read.”
We're super excited about being featured along with @ChildrensAirAmb on BBC News today! Our mission is to help those in need and we're getting a step closer with every mention of @CudoDonate in the media! https://t.co/dl8F2muzoh #cryptominingforgood #charity #cryptomining
— Cudo Donate (@CudoDonate) August 23, 2018
China’s possible ban on Bitcoin mining
On the topic of China, we discussed its possible ban on Bitcoin mining – something which “isn’t surprising” because China has been discussing it for roughly a year.
Though a ban would have a large impact, it wouldn’t stop the network from running. Miners would begin to migrate to countries that offer cost-effectiveness for mining, such as Sweden, Iceland and Canada. “But I don’t think, and especially reading the reports, that there is enough available capacity to actually shift all of it at once in those regions,” comments Matt.
This is primarily because on an economic level, China has good rates for electricity and while Canada does too it is discussing imposing taxes and additional costs for mining farms.
Ultimately the hashrates won’t dissipate – at worst there will be periods of low hashrates while they move the equipment to another country. Coming from the service provider and data centre industry, Matt has seen disasters before where something critical has happened to a data centre and they’ve needed to move country.
“It’s a model that’s been around for a long time.”
— Cudo Miner (@CudoMiner) October 31, 2018
Cudo’s plans for 2019
Like all crypto enthusiasts, Matt is looking forward to seeing bullish action this year. He thinks we’re at the start of the recovery phase – he also notes how Cudo like to plan 18 months ahead.
Cudo had expected Q2 of 2019 to hit the bottom, but it has actually worked out to be Q1. This means Cudo either “have one last bounce left or we are trickling our way up”.
Regarding Cudo and the mining industry, there are a few people – Cudo included – building distributed computer platforms.
So instead of mining Ethereum or Ravencoin, hardware will be used for real computing such as video rendering, AI, data analytics, fluid dynamic simulations and so on. This type of computing, according to Matt, will produce substantially more than you’d ever earn mining a traditional coin.
“It’s going to make a large difference to the economic mining farms that have GPUs. Hopefully we’ll see ASIC producers start to build ASICs that can take on these workloads too. Tensorflow follows quite a standard structure, so if people can build ASICs or FPGAs that can support that, then you know, they will earn a lot more than they do at the moment.”
One of Cudo’s latest products, which will conduct different types of research, will be going live next month in its Alpha phase.
Interested in hearing more from Matt Hawkins? Discover how to earn money through using idle computing power.