CEO Interview with Ibrahim Alkurd from New Mine
Ibrahim, we are glad to have an opportunity to discuss this important topic with an expert like you. Can you give us a quick introduction to your background? How did you get where you are today?
I got involved in the cryptocurrency space in 2015 due to seeing the huge potential of blockchain technology. My initial involvement in this space was arbitrage trading between an exchange and a P2P market place. In 2016, I went on to launch New Mine due to seeing a huge gap in the market for reliable manufacturers of GPU mining hardware. Since then, the company has branched out of GPU miners and now deals with anything related to cryptocurrency mining. This can range from the manufacture of hardware to the hosting of machines. My most recent project is a digital asset hedge fund called Lavaliere Capital. The fund is managed out of Boca Raton in Florida.
Where are the most mining operations located today?
Our company’s focus is predominantly on setting up mines in North America and Europe. The ideal environment for setting up a mining operation is somewhere with cheap electricity and a cool environment. New York, Washington, and North Carolina are examples of states in the USA that are ideal for setting up crypto mines. Within Europe, Norway and Iceland are popular destinations for those looking to mine.
The time when cryptocurrencies were mined using a conventional computer was long gone — later huge farms began to deal with this. First of all, this occupation is associated with the consumption of a huge amount of electricity that computers use for work. What do you say about that?
There’s no doubt that mining consumes huge amounts of electricity. Some people may claim that mining is bad for the environment but that’s not often the case. We aim to use renewable energy sources to power our machines, mainly hydro and geothermal power. This reduces the environmental footprint of the data centers.
What is the difference between New Mine and cloud mining companies?
With cloud mining companies you’re purchasing a mining contract that gives you a certain amount of hash rate over a set period of time. You don’t own any mining hardware. The mining hardware is owned by the company that sells you the mining contract. This sort of business model has proved to be much less profitable for miners than when you own your own hardware. With New Mine, the client owns the hardware. This means that once they’ve finished mining, they can sell it on for further profit. The ROI period for cloud mining contracts is much longer and I’m yet to come across anyone that has made a lot of money from buying these contracts. The only people that make a lot of money from cloud mining contracts are the people that are selling them.
And what is the difference between GPU and ASIC mining?
A GPU is a graphics processing unit. GPUs can mine a range of altcoins, examples of what they can mine include Ethereum, Ravencoin, and Grin. New Mine tends to place anywhere from 6 to 8 GPUs per rig. While GPU rigs are versatile in that they can mine a lot of coins, ASICs are very good at doing only one thing. ASIC stands for an application-specific integrated circuit. The only way to mine Bitcoin and Litecoin is using ASICs.
How can one choose the right mining company?
If possible, it’s always worth flying out to the mining facility before hosting your machines there. Be on the lookout for how clean and cool the facility is as these are two very important factors that’ll determine the longevity of your machines. I would stay away from cloud mining companies for the reasons I have covered in a past question. It’s always better to go with a company that is willing to source and host the machines for you as this will save you a lot of hassle. Always be on the lookout for mining scams as they are all over the internet. As always, if something is too good to be true then it probably is!
What is the difference between proof of work and proof of stake coins?
Coins such as Bitcoin and Ethereum use a proof of work system. This is the process whereby very powerful computers (referred to as miners) validate transactions. For this effort, successful miners obtain new crypto as a reward. This allows a healthy stream of new coins to flow into the network. Some coins (e.g. XRP) are pre-mined and can only be obtained by purchasing them. An example of a proof of stake coin is Dash. Dash was one of the pioneer cryptos to implement a proof of stake consensus mechanism. With proof of stake coins, you usually need a minimum number of coins to run what is known as a masternode. Running the masternode allows you to verify transactions and earn even more of the coin you are staking.
We pride ourselves on great customer service and because of this our clients trust us and keep coming back to us. Our team has a wealth of experience that spans back to as far as 2013. This was in the days when Bitcoin was being mined using GPU rigs. This puts us in a great position to source miners for the lowest prices and hosts them at the cheapest rates. I also spend a lot of time speaking at crypto and blockchain conferences. I feel that it’s very important to educate people about mining so that they know what they’re getting into. Our company would never take on a new client if they didn’t have a basic understanding of mining and what it involves.
In your opinion what can we expect to happen on the market in the next bitcoin halving?
In the next bitcoin halving the coin reward per block will decrease from 12.5 to 6.25. It’s predicted that this will happen in May 2020. Bitcoin miners will hope to see an increase in the price of Bitcoin so that their mining profits aren’t drastically affected. Either the hash rate will have to decrease or the price of bitcoin has to increase in order to keep bitcoin mining profitable.
What mistakes have you made along the way that others can learn from (or something you’d do differently)?
Like many others, I got caught up in the altcoin frenzy of 2017. This was where we saw coins jumping by 10x or more in a day. Unfortunately, the higher something rises, the harder it can fall. We’ve seen many of the altcoins drop by many multiples and some are trading near 0. I’ve learned from this and now decide to hold most of my portfolio in the top 10 coins by market cap. A lot of the altcoins have made promises which they have not delivered on and their prices have reflected this.
What advice do you have for people just starting out with a business or trying to make their fortunes?
There’s nothing I find more exciting than working on a new startup. Entrepreneurs are innovators and are always looking at changing the world for the better. Despite all the pros of a startup, starting a business is incredibly challenging and there will be a lot of obstacles that you’ll have to overcome. Research and understand your market and really listen to what your clients want. After all, they will be the ones that will be giving you their hard-earned money! I can’t stress enough the importance of networking. Go to networking events and put yourself out there. I always say that it could take meeting just one person in order to completely change your company and even your life.
Ibrahim, thank you for your time. Anything else you would like to add?