Cyberian Mine: “Why We”ll Be The Last Mine Standing.”
Mining = “Transferring energy into financial credibility.” Pavel Grachev, Co-Founder, Cyberian Mine.
“The point of bitcoin is not to make us rich, not to make our customers rich, but to have a new financial system based on decentralised technology and not gatekeepers like Deutsche Bank or Bank of England. It runs in a decentralised fashion so anyone can join the network and support the network with a mining machine. That’s feasible. It’s pretty open — I can just point my machine in my shed.” Malcolm Cannon, CMO, Cyberian Mine.
After just over a year of mining bitcoin, Cyberian Mine can confidently say they’ll be the last mine standing, and they have plenty good reasons to justify this ambitious standpoint.
CMO Malcolm Cannon explained: “Not only are we using renewable energy — we‘re doing it completely transparently. We don‘t hide any of our margins, and we help people actually make money in mining, rather than some of the previous competitors who just rip people off, especially in the cloud mining sector.
Cyberian Mine is a hosted mining model which means the customer buys a particular model of machine and can see what is mining directly to their wallet. Customers can also communicate with Cyberian Mine in a Telegram chat for advice on all of this. Malcolm added: “So if I put in 700 Euros into a machine or 2,000 Euros, there is the chance I will get all of my money back after 8 months, and after that time I could be making more or less free money for 2–5 years.”
He added: “We have the electricity price, the transparency of the hosted mining and the fact that we‘re using renewables as well. We still plan to install a webcam so that every client can see their specific device mining for them. Long-term we will be the last mine standing, because nobody can really compete with that.”
THE SHADY HISTORY OF CLOUD MINING
With cloud mining you just buy some theoretical hash power based on theoretical calculation. It is not connected to a machine and can result in dodgy contracts as Malcolm explained, “Genesis Mining and HashFlair were the biggest players in cloud mining. They had quite a similar concept in that they believed there was a market for people who couldn‘t mine at home or couldn’t mine in their own industrial plants because of prices, so they offered this product that’s like a contracted hashrate for mining.
“It’s not connected to a machine and is just a number you see on your screen. You actually have no proof that it’s even running a mining machine for you. They offered contracts called Lifetime and Neverending, but in their small print they actually had terms and conditions that allowed them to switch these contracts off after 3 months after their mining was unprofitable.
“So people including ourselves put thousands of Euros into these cloud mining contracts, and as soon as we hit the crypto winter where there was at least 3 months of unprofitability, the cloud mining companies just switched off everybody‘s contracts. They stole the underlying machines, and they will say you didn’t read your contract. They’re not saying sorry. You can see a US interview with Anderson Cooper, on ‘60 Minutes’ with the CEO of Genesis, and there are around around 100 tweets underneath saying just give me my money back. So there is this cloud mining promising huge wealth and we said ok, let’s do something but completely different within the same industry.”
ESTABLISHING IN GERMANY
Cyberian Mine GmbH is a German company which also adds more than just a few strings to their bow and will also help them stay on track in the future. CEO Max Matreniski mined for a couple of years and had his first business in Russia. With a whole host of Russian connections, he moved to Berlin to establish Cyberian Mine with a Russian friend.
He said: “We thought it would be a great asset of our’s and the brand building process. If we could handle the German bureaucracy, we can do anything, and when people see this they know we are serious! It took us more than a month to open a bank account because no one wanted us. Fourteen banks rejected us when we applied to open a new account.
Being based in Berlin, the centre of Europe’s startup scene has paid many dividends for Cyberian Mine, working out of The Factory co-working space in Mitte and and completing a €270k Angel Round in 2018 and a €4.65M Seed Round in 2019. Malcolm added: “We have this German legitimacy. People have some fear of doing business in Russia, and what’s reassuring to them is that we are GmbH, they can visit us in Berlin and meet us face to face.
“There was a guy we met at the World Mining Summit in Georgia a year ago, who was looking to send 2,000 machines for hosting. We could then meet this person in our Berlin office and have a contract between us and his German company. These are the reasons that people can benefit from our business.
“We have also joined this association called Berchain which is really like a networking group for Berlin based blockchain companies. Then there is the Bundesblock level — the German government supporting blockchain — and there’s also EU wide support for blockchain companies. So there’s a lot of support in this region. Plus the Bitmain holding World Mining Summit is happening in Germany this year as well.”
Malcolm believes as education improves people will realise they can support and profit from the network. So if you’re buying bitcoin, he advises to put at least 10 per cent of your earnings into mining.
EXTRA REASONS TO TAKE A STANCE AND INVEST WITH CYBERIAN MINE.
LOW COSTS — Since their costs are low, you can actually buy a second hand machine that should almost be as successful as the newest machines. Malcolm: “Some customers are investing and they likely have 1–2 years of life, if not more. We’ve seen it with the old machines. They lasted since 2016 and are still running, so if you’re buying the most modern machine now prior to all time highs of bitcoin then it’s a crazy good investment.”
COLD — Siberia is great for mining because it’s cold which cools the computer servers, so the natural cooling system is ideal for mining with an average annual temperature of -2 degrees.
EXCESS RENEWABLE ENERGY — There is a huge excess of renewable energy in Siberia, and more than a thousand megawatts of hydropower that was built inside ex communist infrastructure.
NOVEL WAYS OF USING EXCESS HEAT — Mining equipment generates a lot of excess heat which has to be removed somehow. Max: “We are looking into all the ways we can use the excess heat mining produces by selling heat to residential or other industries. We are looking into secondary heating, or for example looking at solutions that would help us put this hot air into a greenhouse, to allow agricultural enterprises to grow something in the winter in Siberia, which is economically and socially very valuable.”
LESS POLITICS — There is not so much political pressure on who is using excess energy in Russia, because the big state run electricity providers. They want to sell this energy and bitcoin mining companies are cashing in.
CO2 — Max: “We’ve been brainstorming and calculating that we could extract CO2 from the air by using the excess heat the miners haven’t used. The CO2 could be sold to Coca Cola for example.”
WIDER COMMUNITY — Max: “We are working on a commercial cooling system which would allow us to collect the heat in the most efficient way and sell this to residents to heat up houses. That is possible and we are already on the R and D stage and invested some money in it already.”
BASSLINE SERVICE PROVIDER — Malcolm: “We are building a green partnership and had two Japanese guys out of Hong Kong fly to Siberia to visit Max. They’re building their business through us, so they’re able to put a margin, a profit, whatever shopfront they want to do in their country, or maybe they want to raise investment in a different way.
“So we can be this kind of bassline service provider, and that‘s another thing that really puts us ahead of most people in the spectrum, especially in the European and European Space Imaging space. Maybe some people are doing this already in N. America or in China, but in our region we’re one step ahead.”
24 HOUR TEAM — Max: “With hosted mining it’s like you’re mining in your backyard, except it’s actually in Siberia with the best conditions in the world. But you’re still connected by VPN or by the pool directory to that machine, with an engineering team available round the clock.”
LEVEL PLAYING FIELD — They give almost exactly the same conditions to someone who buys one machine as someone who has 2,000 machines and “that’s pretty unique”, according to Malcolm.
IN FOR THE LONG HAUL — Malcolm: “The way that we’ve set up our business is that we will survive and bring everyone along with us. Whereas there are other people in this industry who might make more money than us next year, or make more money than us in the next 5 years. But will they still be standing in 10 or 20 years time as the network changes, and will they have customers that can own one machine and earn 50 Euros a month, or will they just be like a mining cartel where it’s just rich people buying servers?”
FRIENDLY AND TRANSPARENT — These core values set them aside from their competitors.
GOOD FOR THE ENVIRONMENT — Normal mining uses lots of electricity. Malcolm: “There was a point in 2018 where running those machines and trying to earn bitcoin was costing people more than just switching them off, because the bitcoin they got back was not as much as their electricity bill at the end of the month. At Cyberian Mine our customers didn’t have to switch off their machines — and since our low cost energy supply is also renewable, we’re going to end up being the last mine standing!”
Cyberian Mine
