Interview: Alexander Petersons Talks About Cloud Mining and the Future of Crypto Markets
Alexander Petersons, product director of Hashtoro cloud mining service, talks about the future of the cryptomarket, decentralization and the profitability of Bitcoin mining.
Cryptovest had a chance to discuss crypto mining and market dynamics with Hashtoro’s Product Director Alexander Petersons.
CV: How do you see the future of crypto after the latest market massacre?
The market is experiencing a period of decline, but it is temporary. It’s probably the seventh time that the cryptomarket has been declared dead. It will recover again. The fall in the price of Bitcoin that happened this year was caused by the liquidation of Mt.Gox’s assets. Under certain conditions, Bitcoin can reach 50,000 this year. We will also see a shift from personal to cloud-based mining due to the growing difficulty of hash calculations. I expect more cloud mining sites to appear in the next few years.
CV: Which coins do you think will survive in the next two years, and which ones will be forgotten?
The top cryptocurrencies that are in wide circulation will survive. BTC, BCH, ETH, LTC and Monero are definitely not going anywhere. This is one of the reasons why we chose to mine cryptocurrencies that are in high demand.
CV: How popular is the mining of altcoins like Ethereum, Litecoin, Monero, DASH, and others?
Bitcoin mining promises high returns, but after the drop in price and increase in mining difficulty, many miners turned to altcoins. The cryptocurrency market is extremely volatile, and mining profitability depends on the price dynamics. At the beginning of 2018, it was more beneficial to mine ETH and LTC. When the price dropped, Bitcoin mining became more worthwhile. We mine BTC, LTC and ETH in equal quantities in order to distribute risks.
CV: There have been rumors that mining might die. Is it possible that one day proof-of-stake algorithms will replace proof-of-work?
First, mining will never die: there will always be coins to mine. Yes, Ethereum has been planning to switch to proof-of-stake. If it happens, demand for other coins will rise, and their price will go up as well. Second, I am an advocate for proof-of-work. PoS currencies can’t fully protect transactions from censorship, while mining and proof-of-work help to create and maintain a byzantine fault-tolerable, economically viable network. Buterin says that PoW is a wasteful algorithm - I say, we can find ways to make it more efficient.
CV: Was it inefficiency that made Hashflare unprofitable?
Yes, according to their statement, overall expenses exceeded earnings, making Bitcoin mining non-profitable. Hashflare management claimed that they did their best to lower the costs, but it didn’t work out. However, all SHA-256 contracts were resumed shortly.
CV: How can we make sure mining remains viable today?
The only way to make a reliable profit is to significantly cut electricity and maintenance fees. Even in today’s crisis, cloud mining can still be profitable. Hashtoro’s farms are located in crypto-friendly European countries with access to cheap renewable energy sources. The excess heat generated by our equipment is used to warm water for the local community, which covers 20% of our electricity costs. Using ASIC rigs with immersion cooling gives us more efficiency. We accelerate Bitmain rigs, which provides us with a 10-20% surplus hash rate - but also plan to create our own optimized chips in the near future.
Our system determines which currency is more profitable to mine at the moment and dynamically switches to it. At the end of the day, all the mined coins are converted into the currency of the contract chosen by the user. The tests show that this way our clients receive up to 10% more profit.
These strategies allow us to be more effective, significantly cut expenses, offer the cheapest cloud mining plans available in the market - and protect the environment all at the same time.
CV: What about Bitcoin? Its hash rate has reached dizzying heights, with new and more efficient farms appearing. Is it still profitable to mine?
Yes - if it’s done on industrial scale, with the newest equipment. Few individual miners can afford that, but cloud providers make Bitcoin mining possible - and profitable - for them. With Hashtoro, you can always mine a certain amount of BTC, depending on the mining complexity. We make payouts every day, so part of the money raised can be reinvested in new capacities.
CV: In the past years, there have been many cloud mining scams. Has this ever affected Hashtoro’s marketing?
The cloud mining market has been growing. This has attracted many con artists who have set up a number of scam cloud mining sites. To stand out from the crowd, you have to demonstrate your reliability and keep offering quality service. In the crypto world, people recommend the services that are worth investing into. It’s word-of-mouth that works. And it has definitely worked for us. At the moment, we’ve limited the maximum hash speed for Bitcoin mining contracts and will likely have to temporarily close new ETH and LTC contracts due to high demand.
CV: What is your opinion on Bitmain’s influence on the mining of Bitcoin and other coins?
At the moment Bitmain is one of the strongest, most influential players in the market. Some people are afraid that such centralization can lead to 51% attacks. But the ASIC mining trend is a form of protection in itself. The production of ASIC chips takes a lot of time and resources, while attacking the network would drop the coin price, provoke hard forks and render expensive equipment useless. It will be a good thing, though, if ASIC production becomes more distributed in the future. If more companies would create their own chips and compete with Bitmain, it will contribute to decentralization.
CV: What would be your advice to an investor, or a trader, wishing to enter the cryptomarket now, in August/September 2018?
I’d recommend to hold your assets and buy more Bitcoins while the price is low. It’s also a good time to analyze the market, to explore your options and to get more crypto-educated. Cryptocurrencies are shaping the world, they have already become a part of its daily life. As soon as they are more widely legalized, we will see their growth.
About Alexander Petersons
Alexander Petersons is the product director of cloud mining service Hashtoro.com. He is an IT specialist and a serial entrepreneur who started his professional career in small IT companies in Europe, then moved to America for several years. He has also worked on the development of mobile processors in Telecommunications equipment company Qualcomm (USA).