Coinbase CTO Balaji Srinivasan believes that a new startup called Coinmine, which announced pre-orders for its first home miner on Wednesday, may make home mining popular again.
Srinivasan said: “The big difference with decentralised mining in 2018 is that there are now so many different coins and tokens out there that it is almost certainly possible to make a profit — or at least mine a decent amount of some crypto- via a decentralised home mining device like Coinmine.”
Srinivasan in the past founded 21.co, a startup that emerged in 2015 with an ambitious plan to embed bitcoin miners in everyday devices. So, his enthusiasm has history! He also backed Coinmine during its angel investor funding round. But, Coinbase Ventures is also a Coinmine investor it emerges.
Still, underlying the investment is Srinivasan’s belief in a diversified crypto economy. His previous company may have turned away from mining, but Srinivasan believes that crypto has changed in two substantial ways that make home mining more feasible in 2018. On this topic he said, “Back in 2015 only bitcoin had any significant share, so the viability of any decentralised mining approach was benchmarked against BTC alone as opposed to 1,000-plus new digital assets.” And added, “The big difference with decentralised mining in 2018 is that there are now so many different coins and tokens out there that it’s almost certainly possible to make a profit — or at least mine a decent amount of some crypto — via a decentralised home mining device like Coinmine.”
Srinivasan also sees Coinmine as a bet on more worthwhile coins to come. “There will likely always be some asset or set of assets that Coinmine can mine which makes a profit,” and he’s optimistic about Coinmine’s ability to add new coins later, as well as maybe play a role in launching new tokens.
But will it be worth it to the home miner?
Coinmine will automatically put users into mining pools as a way of making the product plug-and-play. However, the company will take 5% of users’ mining earnings. Users pay $799 for the mining unit, (it looks a bit like an Xbox) but may only earn roughly $5 per month. Perhaps this will improve, but those figures make it sound more like an expensive hobby than an investment opportunity.