The CEO of Hotmine, Oles Slobodenyuk, could not have chosen a better place to present his product: a bitcoin mining platform that also functions as a home heating appliance.
Irkutsk, Eastern Siberia, is famous for the cold in winter, when freezing temperatures are the norm. A few weeks ago, when Slobodenyuk took the stage at the Baikal Blockchain and Crypto Forum with one of Hotmine’s little white boxes, he joked about the warm August weather.
“I was told that in Irkutsk, the average air temperature is minus 2 degrees Celsius, so I brought a radiator with me,” he said.
Eventually, Slobodenyuk told the crowd, Hotmine aspires to sell up to 200,000 of its devices to Irkutsk residents. But the final ambitions of the Ukrainian-based company are even greater.
“Our goal is to get to the point where 80 percent of all mining is done with the intelligent use of the hot air it is producing, while protecting the bitcoin network,” Slobodenyuk told CoinDesk, adding:
“We believe mining should become decentralized again, with a full node in every home.”
It is a high goal, given that the four largest mining groups control approximately 60 percent of the total hashrate, or the processing power dedicated to securing the bitcoin network, according to BTC.com. But, like Bitcoin, Hotmine will seek to use economic incentives to achieve its decentralistic ideals.
According to Slobodenyuk, each Hotmine miner performs calculations at a rate of 8 tera hash per second (th / s). With the current price of bitcoin, he said, 1 th / s earns about $ 7.20 a month, so a single heater can generate about $ 55 for its owner while radiating heat for up to 10 square meters.
While the concept itself is not new: Last year, a French company called Qarnot announced a CPU-based mining heater that generates ether, for example, Hotmine is focusing on a region where it is more likely to resonate.
With current electricity prices in Irkutsk of 1-2 cents per kilowatt-hour, a heater needs less than $ 10 of energy per month, so the heat would indeed be free, plus a modest income in bitcoin, Slobodenyuk said.
He said that even halving or periodically reducing the amount of new bitcoins granted to miners will not harm this model.
Hotmine began in 2013, a lifetime in encryption time, with an experiment in a town near Kiev, Slobodenuyk said: it provided a group of homes with prototype mining boilers. People got free heat without even thinking about bitcoin, since all the work with cryptography had been done for them.
After two years, the chips inside the boilers became old and mining ceased to be profitable. When they were presented with the opportunity to maintain the boilers but pay a little for electricity, people chose to return to the wood-burning stoves. The striking new technology was not convincing if it didn’t save them money.
Now, Hotmine is looking for partners to manufacture electronics and metal boxes for its money-making heater. So far, it has offers from three potential partners in Russia.
Oles Slobodenyuk, CEO of Hotmine, with the mining boiler model
The launch of a pilot batch of 60 heaters is scheduled for November to test the demand, the company announced. Approximate price: $ 1,050. By the end of the year, Hotmine aims to sell 100 to 200 heaters.
When asked if he believed people would easily learn how to deal with wallets and bitcoin exchanges to spend the profits of their radiators, Slobodenyuk said that at first, they won’t have to.
Hotmine can partner with cryptographic service providers, and all consumers would have to do is give a bank account number before harvesting their income converted into fiat.
Sooner or later, people may want to go beyond the rabbit hole and discover Bitcoin for themselves, Hotmine hopes.
Warming to bitcoin
Another believer that bitcoin-fueled heating is ready for wide adoption, at least in places like Eastern Siberia, is Ilya Frolov, a resident of Irkutsk.
Its startup, Imagine8, manufactures heating systems in which miners manufactured by the market leader Bitmain are immersed in mineral oil, which distributes its heat to the floor. To show the technology, Imagine8 plans to build and rent guest houses that use it.
Frolov, who has been working on these systems since 2016, said he and a friend from the school took about two dozen people to use the mining heaters in their homes in the suburbs of Irkutsk.
Initially, Frolov would ask homeowners to heat their homes with the system and send their electricity bills. Some agreed with this option, but more people detected the bitcoin error by learning how it works, Frolov said:
“First, they were like, ‘I heard about bitcoin, that’s a pyramid [scheme], but I want free heating.’ Then, we worked with them, gradually converted them to our religion. And in the end, they were like, ‘Ok, I figured that out, I’m going to mine bitcoin myself.”
According to him, these customers paid for the hardware and installation, then learned to manage wallets and exchange accounts and now take care of their bitcoins.
Other companies use the same technology now, and some people would buy miners and oil deposits and build the system themselves after watching videos posted by Frolov and his competitors, he said.
An average house of up to 100 square meters needs about 10 kilowatts to heat itself through an electric boiler, a popular option in Irkutsk. Electricity bills in Irkutsk winters can cost the owner several hundred dollars a month. Instead, six or eight specialized mining chips, known as ASIC, can heat a house like this and win the owners some bitcoin.
And the environment benefits, Frolov argued, when the machines serve a double function, “instead of the ASIC heat being wasted in the air and people heat their homes with coal.”
Oles Slobodenyuk image by Anna Baydakova for CoinDesk; Siberian Ice cave via Shutterstock