Interview with Dave Carlson, founder and CEO of GigaWatt
Q. How did you get into crypto mining?
A. A few years before I discovered bitcoin, I was working at Microsoft XBox Live on their digital token minting system. We were producing cryptographic tokens to represent each and every digital asset in the XBox Live ecosystem. I was also a day trader of regular fiat currencies like the Euro, Yen, USD and the British Pound. When I read about bitcoin I knew exactly what I was looking at and immediately dove into it. I quit work, closed my trading accounts and never looked back.
Q. What is your strategy of crypto mining which you can share?
A. Crypto miners should first and foremost understand that their strategy is to acquire coins for a low cost, slowly over time. The goal is to hold those coins so that they enjoy gains in value as the coin prices rise. Too many people want to “get their money back” by immediately selling back into fiat.
Q. Describe the major challenges associated with running and operating a crypto mining operation.
A. There are many challenges, here are just some of them:
a. Finding a good location, with access to a large volume of electric power at low rates, reasonable cost of labor, etc, and establishing relations with local community to ensure long-term access to resources.
b. Developing a specific facility design. It is a common belief that one can just get ahold of any industrial building and use it for mining. But in reality alterations to the building may cost more than putting up a whole new facility, and even after retrofitting, the existing building may not be ideal for cost-efficient mining, consuming too much power for cooling which translates into higher ongoing costs.
c. Bringing together a good team. Mining requires specific knowledge and dedication, and team members may have to move to faraway cities in search of cheap power which is often available in places with hard living conditions (for instance, cold climate, which is good for mining because it helps to economize on cooling). The crew spends hours and days in remote noisy and drafty places with fluctuating temperatures).
d. Raising significant capital. Starting a mining business takes millions of dollars, and every mistake can cost you your whole business. e. Currency volatility. Most of your costs are in fiat currencies but the income is generated in crypto currencies. If the exchange rate plummets you will get a very
e. Currency volatility. Most of your costs are in fiat currencies but the income is generated in crypto currencies. If the exchange rate plummets you will get a very unfavorable income to costs ratio and will need to be able to sustain your business until the rate goes up again, sometimes for months on end. It also takes a lot of trust in blockchain.
Q. What are some common mistakes for first time miners?
• The belief that any old industrial building is suitable for mining.
• Not checking the volume of available power.
• Not provisioning power for cooling.
• Not taking into account cryptocurrency rate fluctuations.
Q. Why tokenize mining?
A. By tokenizing our mining infrastructure, GigaWatt is finally able to extend our huge economic advantage to anyone in the world, large or small, to run their own mining business and be successful by having our expert team build and manage it. This is a move to decentralize the global balance of mining power and put it back in the hands of the little guy. The home miner built Bitcoin, and I want anyone to succeed as a true participant in the explosive growth of cryptocurrency mining.
Q. WTT Token Launch web site says that current price to mine bitcoin for token holders is about $640 (https://cryptonomos.com/wtt/tokens). How do you calculate this number?
A. This price is calculated based on ongoing costs required to mine 1 bitcoin (electricity and maintenance) and the cost of buying mining equipment (price of one miner divided by the approximate number of bitcoins which it will mine during its lifecycle). We take into account the current equipment price, its hash rate, power consumption, block reward, bitcoin mining difficulty, average monthly mining difficulty increase, electricity costs, and maintenance. This calculation does not include token cost because WTT token is an asset with a 50-year lifespan, which could be sold at any time.
Q. Will Giga Watt influence decentralization?
A. Hashing power equals voting power and its never been more clear that a large miner could push their own agenda, directly affecting the investments of everyone else.Giga Watt wants all its mining customers to be empowered to vote on issues in the way they prefer. Because of this, Giga Watt will not operate a centralized pool or indicate any preferences for a particular improvement proposal without direction. We will let our customers choose. We plan to extend a list of mining pools to offer our clients a choice.