New $10 Million Center Opened by Greenville Startup for Cryptocurrency Mining
Cryptocurrencies are becoming increasingly popular, slowly overturning the expectations of the entire world. In fact, bitcoin and similar coins are available by the millions, but a Greenville-based startup has decided to take some funds to improve the community.
The startup is called Treis Mining, and they are about to dedicate $10 million in a center for mining new tokens. According to David Pence, who is a managing director for Treis Mining, “The process of confirming financial transactions over the internet is going to change the way countless industries operate over the next 10 years or so. We’re here as a company to facilitate that transition.”
Bitcoin and other cryptocurrencies have an advantage that fiat currency doesn’t, and that’s how they aren’t tied to a particular bank, making them interchangeable with other locations. The whole system focuses on decentralization, though the transactions performed within any crypto trading are found on a ledger called the blockchain, which is publicly available for transparency.
Whenever someone adds a transaction to the ledger, the microprocessors have to mine for more coins, which is done through multiple mathematical problems. The reason that this is beneficial is because the first processor to complete the solution gets a part of the coins they were attempting to transact. In addition, coin holders may be subject to fees when these coins are mined, though it won’t take away from the value that they purchase.
The co-founder of Treis Mining, Michael Bolick, says,
“We verify a transaction, and it is added to the blockchain. We are compensated in the particular cryptocurrency or coin upon which the transactions was processed.”
To ensure that this type of transaction gets increasingly harder, the calculations increase in difficulty after every 2,016 transactions, which takes about two weeks. However, this increasing difficulty has make it so that some miners are collaborating to solve the problems to get the profit that comes from finding that solution.
Making A Profit Through Mining And Sales
There are plenty of platforms that have a certain limit on how many coins/tokens/etc. can ever be created, which makes it difficult to get in sometimes. The bitcoin network is massive, and they still only have a limit of 21 million coins. Luckily, there are miners that have managed to discover about 17 million of those coins in the last nine years, but the others could take up to half a century to find, since the calculations keep getting harder to solve. Once the coins are found, mining anything new won’t create any bonuses for the miners.
To make matters worse for the incentives to miners, the profits that they take in with those solutions are actually getting cut down with each new difficulty level. Each change ends with a reward of half of the previous, though those restrictions help the coin to become more valuable. Treis Mining has created a solution with their hardware that will make it easier for the miner to get those competitive bonuses.
With more power, the miners have a greater likelihood of solving the problem, which is why Application Specific Integrated Circuits (ASIC) rigs can help. With $8 million of their dedicated funds, over 4,000 rigs will be established in the next two years, though they already have installed about 300 of them. The rigs have the ability to mine multiple coin types, such as bitcoin, Litecoin, and multiple other cryptocurrencies. Since the only profitable way to mine these coins is to have a lower cost to mine than the value of the coin. To make back some of the costs, Treis and other mining companies take the time to sell their mined coins to consumers, which is why there are so many different cryptocurrency ICOs and other sales.
Since 2013, Bitcoin was established by the United States Treasury Department as a legal decentralized virtual currency, which lets the user exchange it for assets and other investments. The value of this type of currency relies solely on how many consumers are interested in it and investing in it, along with how many coins are presently available. At the moment, there are 1,400 cryptocurrencies, which have a combined value of $300 million.
Pence also in charge of Acumen IT, which is also established in Greenville. He only just got involved in this industry about two years ago, following the use of the Ethereum network on Microsoft’s Azure cloud service. He performed thousands of hours of research to start mining on his personal time before using a 1,500-square foot building that contained over 200 graphics processing units. He continued to build upon this building space until he proposed the opening of a mining company to Bolick, who obviously ended up co-founding Treis Mining, but not until December 2017.
Energy Expenditure Within Treis Mining
Once Treis Mining is in full force, they will need about 1,600 watts of power to each ASIC rig per hour, making it one of the largest customizers for the South Carolina power company, Duke Power. Right now, in electricity alone, the miners have to spend about $4,302 in electricity for each bitcoin. Treis Mining’s goal is obviously to remain lucrative, which is why they plan to both sell shares and install a trade chiller with ventilation to help the rigs work around the clock without overheating. Additionally, this chiller will help the rigs to reduce their energy requirement, lowering the cost. There will also be more monitors to watch the pricing to figure out the best coins to sell at any given time.
Treis Mining has an advantage at the moment, since bitcoin, themselves, and other ventures are raising funds through ICOs (initial coin offerings). With the right stimulation within the industry, cryptocurrency could easily reach a value of over $5 trillion in the next four years. In fact, by the first week of December 2017 alone, the collective funds raised by ICOs was about $1.38 billion.
Challenges From Federal Commissions
Even with profits, cryptocurrency opportunities have come with some scrutiny. Every investment through them is high risk, and there’s been many securities laws that have had to be put in place. For example, the U.S. Securities and Exchange Commission has established certain laws that deal with crypto exchanges and digital assets. An even bigger restriction is that which is found on social media, where Twitter, Google, and Facebook no longer allow cryptocurrency platforms to advertise at all.
With these changes, in just three months, Bitcoin had a 48% decline, which impacts the value of the tokens and the price of consumers. Ethereum also had a 47% drop as a result. However, even with these issues and declines, Tres Mining has not given up.
Future Mining Plans
There will be about five or six more data centers coming to the Upstate area in the next ten years, of which each facility plans to hire two staff members that will monitor the rigs. They will also continue to research and analyze the blockchain information to create new apps and potentially a title records database.
Bolick has said, “The market is maturing, and the use cases for various blockchain applications is no longer nascent but compelling. It’s going to streamline and optimize financial transactions to a much more cost-effective and efficient model.”