On Tuesday, July 10th Crypto NYC hosted SOLminer for our weekly Tuesday lunch presentation. Every Tuesday Crypto NYC hosts a lunchtime presentation where an innovator in the blockchain space gives an update on their project. SOLminer’s presentation was led by Samuel Risberg, co-founder and Chief Technology Officer. Roughly thirty members of the New York crypto-community attended the lunch held at Crypto NYC’s office in TriBeCa. SOLminer was founded by Risberg and Jeremy Segal, who worked together on several ventures together before founding SOLminer.
SOLminer has built a modular mining system which allows for cost and energy efficient cryptocurrency mining. SOLminer’s goal is to build a modular mining system that is eventually powered entirely by solar arrays, sustainably mining coins such as Ethereum. SOLminer currently has one mining module up and running at a secure location in Tampa, Florida. For now their existing module is run using conventional power sources, benefiting from Florida’s relatively low-cost power rates.
SOLminer is in the midst of preparing their Security Token Offering (STO) and is in the process of obtaining SEC approval for a token sale that can raise up to fifty million dollars. The SOLminer STO will be offered using SEC Regulation A exemption and will be Tier 2 compliant. Maintaining compliance requires providing full financials to the SEC on an ongoing basis and adhering to the planned buy/burn schedule. SOLminer is close to completing their official White Paper which will be submitted to the SEC for comment. Once the firm has obtained SEC approval, the firm will begin their token sale.
SOLminer will use the funds to expand their mining operation and to begin purchasing solar arrays. The firm plans to initially power their mining modules partially via solar power, with a goal of generating a quarter of their required energy consumption through solar panels. As the price of solar continues to fall and the firm expands their operation, the SOLminer team hopes to reach 100% solar usage. Using solar energy to power their mining operation will generate significant cost savings if the price of solar energy continues to fall.
Risberg and Segal took a circuitous path into the blockchain industry. Risberg began his presentation with an explanation of how the pair met, and what led them to begin building their custom mining machinery. Risberg was trained as a mechanical engineer, and the cofounders began working together several years ago creating custom built drones.
Risberg and Segal parlayed that venture into a car importation business, importing right hand drive Japanese cars and running a dealership for distribution in Tampa, Florida. For a variety of regulatory reasons, these types of high performance automobiles had typically not been sold in the United States. The pair launched their automotive business in 2014 and gained valuable experience complying with complex government regulations as they worked their merchandise through the importation approval process.
In 2017 the pair began running Ethereum mining machines out of their car dealership. Risberg and Segal both had a longstanding interest in electronics and building high-performance PCs and had started investing in cryptocurrencies in 2016. Given their backgrounds, making the jump into mining was natural for them.
Florida’s relatively low electricity prices combined with Risberg’s engineering background allowed them to generate consistent mining profits. As they began filling their warehouse space with mining equipment, the heat and noise from the mining rigs became an increasingly large problem. The pair decided to consolidate their mining operation into a standard ten-foot shipping container.
Risberg explained that the plan for building the mining module was driven by both technical and organizational reasons. Consolidating their rigs into the containers helped with designing a cooling system and allowed for easy organization. Risberg used his engineering skills to design the module’s cooling system, using Computational Fluid Dynamics to map the laminar and turbulent airflow of the heat generated in the module. The core GPU temperatures averages 65 degrees Celsius.
SOLminer’s initial mining module has been running with near 100% uptime since its creation. The mining module was stable enough that Risberg was able to mine even while Hurricane Irma was ravaging Florida, with no downtime during the storm.
The mining module contains forty streamlined mining rigs, each rig composed of eight high end GPUs. The module can be managed remotely via Risberg’s phone, and they can switch the currency they mine rapidly, if required. The module currently averages 10,000 MH/s on ethhash (Ethereum’s mining algorithm,) with 99.997% uptime. Each of the 320 GPU’s in the module averages 31MH/s.
SOLminer will be raising funds by selling newly-created SOL tokens. Each SOL will be valued at $1, and SOLminer can raise up to $50 million, with a $5 million floor on the offering. Since the STO will be Reg A compliant, SOLminer will be able to accept non-accredited US, as well as foreign, investors.
The funds raised will be used to construct additional mining modules as well as purchasing solar arrays. Forty percent of the income generated by the mining operation will be set aside to buy and burn SOL tokens, providing liquidity and returns for token holders.
Each new module costs roughly $200,000 to produce. The solar arrays that SOLminer plans to purchase currently cost $140,000 and can generate 122% the energy required to power a module. Solar array costs have fallen dramatically in the past few years, a trend Risberg sees continuing over the foreseeable future. Risberg estimates that solar array costs may fall by more than 50% over the next 18 months as California’s new clean energy regulations come online, which should spur a dramatic surge in solar arrays, pushing prices lower.
Despite the current plunge in crypto prices, Risberg is confident they will be able to continue mining profitably for the foreseeable future, with a breakeven Ether price of $50 required to sustain profitability for the operation.
After SOLminer’s presentation, the floor was opened to questions from the gathered attendees. Several questions were raised about the viability of running the operation with solar energy, given its higher cost than traditional power. Risberg and his team are confident falling solar prices will eventually make solar powered mining more cost efficient than traditional mining, but also believe clean energy generated coins are a moral imperative given the challenges posed by global warming.
Other questions focused on what rights SOL tokenholders would have in the ongoing management of SOLminer. Tokenholders don’t hold equity in the firm, and thus have no voting rights, but Risberg hopes to involve the tokenholders in the firm’s decision-making process though he hasn’t settled on a mechanism for community involvement.
Next Tuesday, Crypto NYC will host Jessica Angel of the Dogethereum Bridge Art Project. You can find more about this project here, and register to attend here. Please follow us on Medium for updates on the Crypto NYC community.