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Joburg firm eyes industrial-scale crypto-currency mining

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Alan Robertson (second from left) and other co-founders of YOU#.
Alan Robertson (second from left) and other co-founders of YOU#.

Johannesburg-based company YOU# is looking to bring large-scale crypto-currency mining to SA.

The company aims to host at least 3 000 crypto-currency miners in the next three years. This comes as more and more South Africans pool resources and computing power to cash in on virtual currencies.

The YOU# hosting facility is located at Knightsbridge, east of Johannesburg. It was founded by Alan Robertson, Jennifer Masterson, Daniel Abreu, Ronaldo Figueira, Ari Leibovitz, and more recently Ruan Cloete joined as a shareholder.

The founders come from diverse backgrounds, including accounting, film and media, and as executives of listed financial companies.

Large investment

In an interview with ITWeb, Robertson said: "We spent a considerable amount of money modifying the facility to make it ideal for crypto-currency mining on a large scale. This included electricity supply, cooling, dust management, security and IT infrastructure."

The facility currently hosts 255 miners and these are split between YOU# and individual clients, Robertson says.

"Our current facility is upgradeable to host 1 000 miners and we are actively researching where to establish our next site. YOU# aims to host 3 000 miners in three years," he adds.

According to Robertson, YOU#'s business strategy is to build capacity for ordinary people to effectively become the bank in the new world of virtual currencies, and doing this by housing individually-owned miners.

He points out that YOU# charges a monthly fee to house miners and this is partially based on the mining yield so there is an element of risk-sharing. Over and above that, bulk power is charged at cost to the client.

"The target market is typically individuals who already have miners but would prefer to have them professionally and securely hosted. But as an authorised reseller of miners, YOU# is able to supply equipment to those interested in getting started."

Robertson notes that mining individually may suit people who are in close proximity to their hardware and who have the technical know-how required to set up, monitor and maintain their miners 24 hours per day.

They also need to provide proper cooling and dust control to ensure the miners don't overheat which reduces their mining efficiency and shortens their lives, he adds.

"Furthermore, miners are noisy and create enormous amounts of heat. Given their huge power consumption (1 600 watts for an Antminer S9 13.5 TH/s Bitcoin miner), an individual mining privately needs both capacity and access to affordable electricity - something not easily achieved at home.

"YOU# was conceived out of the need for an alternative for individuals who are interested in mining crypto-currency, but would like to use their own hardware (rather than cloud mining) without having to become technical experts and invest in complex and expensive facilities. For these individuals, YOU# provides a turnkey solution."

According to Robertson, YOU# has been set up to be fully transparent and welcomes individuals interested in mining to visit the facility and meet with the team before starting.

Power trips

For Robertson, access to adequate and economical supply of electricity is one of the biggest challenges facing local crypto-currency miners.

"Miners typically draw between 1 200W and 1 600W of power 24 hours per day. Multiply that figure by the number of miners you intend operating and one quickly realises that operating more than two to three miners at home is likely to start affecting your capacity to run your household appliances without tripping your power.

"Similarly, larger operations such as YOU# have to invest in industrial-scale power to be able to operate hundreds of miners. Eskom electricity tariffs vary and if you are mining at home on a domestic tariff, your mining yield is going to reduce as a result of the additional input cost."

The other challenge is on profitability, Robertson adds. "In the short term, the biggest challenge is remaining profitable with virtual currencies being depressed at the moment. Having said that, if you believe prices are going to rise then any currency that you mine and retain will then increase in value."

YOU# plans to expand its facilities regionally at first and then internationally by offering the same turnkey hosting service for clients.

"We're also expanding services into different growth areas, including education and fully compliant crypto-currency investment structures," Robertson concludes.

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