Ecology is a word that has hit our lips in recent decades. Frequently put in the spotlight for its excessive consumption of electricity, Proof of Work (PoW) is largely outdated. It is for this reason that a large number of ecosystem players believe that it is set to disappear within the next few years to be gradually replaced by Proof of Stake (PoS). However, PoW offers the best security to date and mining is an important part of the blockchain industry. For this new international interview, today we welcome Igor Runets, CEO of BitRiver, the largest data center in Russia and the Commonwealth of Independent States (CIS)
Hello Igor, can you introduce yourself?
Yes of course, originally from Russia, I am in the telecommunications and data center sector in which I founded quite a few companies in 2010. After helping in the development of this one I moved in 2015 to the USA to obtain my MBA at Stanford University. It was there that I met Thomas bailey who will become my business partner.
How did you come to launch BitRiver?
When I was in the US I spoke at length with Thomas who was very fond of finance and cryptocurrencies. We brainstormed together on how best to harness both his financial and crypto skills and my technical skills. The mining and cryptocurrency business not being so far removed from the data center business we came up with the idea of a mining fund.
We wanted to launch our fund in my native country in Russia, but following geopolitical problems we established them in China. We were then able to develop and found our Data Center in 2017 in Bratsk, a small Russian town of 250,000 inhabitants. Since then I manage and manage this project and BitRiver kept on gaining weight until establish itself as the leader in data centers in Russia and the CIS.
What was the first Miner you bought when you went into business?
It was a Bitmain’s Antminer S7, which wasn’t a great buy by the way, but what do you think you have to start somewhere.
ATHave you ever been disappointed with the mining industry?
Cryptos are a very volatile industry and so is mining. However, I have never had a disappointment with the sector itself. I think that’we can also consider mining as a blockchain sub-industry in its own right because we have our own codes and regulations.
Since the income we receive is subject to many parameters, we must adapt in real time to optimize these. After that I was already disappointed with the equipment we were able to buy. When we started out, we would buy equipment at full price before we found that a few months later it was no longer worth much. Like any business we made mistakes and came out of them grown.
In view of the fluctuations in mining revenues, what can be done to make them as stable as possible?
Always keep in mind that the price of operating expenses (OPEX) must be as low as possible. This also involves a constant search for best material and cheapest electricity. Finally it is obviously necessary that your equipment is operational for as long as possible in the year to maximize the rewards for each block.
Why did you choose the city of Bratsk for BitRiver?
As I said before, we absolutely wanted our company to be based in Russia. Given the size of my country many locations were possible, but we chose Bratsk for the following reasons:
- in the past the Russian government, wanting to concentrate companies that consume a lot of electricity in one place, built lots of electrical resources
- electricity is mainly green because it comes from hydroelectric. Bratsk has the second largest hydropower plant in Russia
- hydroelectric being the cheapest energy to date, this decreases our OPEX
- the average annual temperature is -2 ° C which is perfect for mining.
- Bratsk is located in a region that is both geopolitically and environmentally stable. We are therefore immune to disasters that could disrupt our services.
- sgeographically close to China where the material comes from. This allows faster delivery of it, as well as lower costs.
Many believe that mining on a large scale would deal a fatal blow to our planet. What do you think ?
It must be taken into account that if many mining operations started in an inefficient manner and with carbon energies, we are now in a perpetual optimization of the expenditure. We therefore have less energy-consuming equipment and use greener energies, which contributes to the development of these, such as hydroelectric which is the cheapest electricity. So I think that like all technology we will further optimize it and that it will not undermine the integrity of our Earth.
BitRiver only offers mining, right?
Indeed, we are above all the largest Data Center in the CIS region. We therefore provide an IT infrastructure for projects requiring high computing power. While it can indeed be used to mine cryptocurrencies, we have clients who use it for graphics processing or research.
If we stay on the crypto side, we can also host nodes for staking or for any other consensus system. We adopt ourselves at the request of our customers. At BitRiver, the customer is king.
What have you done to become the biggest data center?
First of all you have to have a very precise vision of what you want and know that the mining business is not the easiest. When we first started, the economy was not very good, which did not attract many investors in sectors as dangerous as mining. We managed to get one, if not the best location in the country, and we settled down. Despite a difficult start due to lack of funding, we have always remained confident about the long term potential of mining. I think all successful businesses are those that dare to venture into the blue oceans. More risks ultimately lead to more results.
How do your customers choose which cryptos to mine? Do you have some kind of bouquet?
We talk to our clients to work out a strategy together as long as they comply with the law. During this year the Russian government made many changes on crypto and fiat regulation. Thanks to this, mining equipment is perfectly legal because it is considered a simple tool for computing power. There is therefore no restriction for the user on the coins that can be mined.
What is the government’s position on Bitcoin and Blockchain?
Our government has always been against cryptos, especially when it is used to buy goods or services.. Such a restriction does not encourage investors to consider this kind of service. Paradoxically but fortunately for us, the government is very favorable to mining and the data center. Indeed in Russia we have in some regions a significant surplus of energy production. Data centers and therefore indirectly mining solve this problem and develop the economy of the regions concerned.
Regarding blockchain technology itself, the government is aware of its potential and is very favorable to it, especially for votes and data security.
With Iran’s massive investment in mining, many believe we have a future industry leader here. Do you feel threatened?
We should never denigrate the competition, but we are not at all worried here. It is almost impossible to obtain electricity cheaper than that created from hydroelectric power. Countries like Iran which mainly use fossil fuels and which are countries where the average temperature is high are therefore in our opinion out of the race. Moreover, Iran is an unstable country in terms of its resources and its policies which will limit the number of investors.
How often do you replace your equipment?
BitRiver does not make this decision, it is our customers who take it and inform us. Each customer therefore decides what equipment he wants to use, when he wants to replace it or even sell it. Some of our customers are still using equipment they bought 5 years ago while others are on the lookout for new things. Everyone adapts according to their strategy and their means, but I would say that the majority replace their devices every 2 years.
If I mine a corner that makes a hardfork, can I get these back?
Of course ! Since we only provide the environment, it is normal for users to pick them up. They also have a say in this and are therefore free to choose which pools they join.
Do you think halving has a good or a bad impact on mining?
I think that it’s more of a non-event, a simple cycle as often. Many people buy equipment and sell it back to halving and then later buy more equipment at a lower price. After that this is not necessarily the most optimal strategy because we cannot predict the price of bitcoin or hardware. However, the advantage of cryptos is that many parameters such as supply or difficulty are predictable, allowing you to create your own strategy. Regarding BitRiver, the 2020 halving has not changed our business.
Has Covid19 caused you any problems?
With the majority of the material coming from China, we obviously had logistical problems to deal with at the start of the year. As this situation quickly improved quickly, we hope 2021 will unfold normally.
Before buying a miner, what parameters should I take into account?
First, you have to look at the Watts your device is going to consume for its hash power. This allows you to assess the ROI and assess whether the purchase is worth it. Secondly, you need to find material that can be delivered quickly. If you place an order and your equipment arrives 6 months later than expected, besides being already outdated, the market may also be against you.
What’s the latest big event for BitRiver?
Without a doubt the business association that we made in November with In + Group. It’s about a Anglo-Russian company, founded in 2002, employing nearly 100,000 people. En + Group is a market leader which has the largest independent hydroelectric generator in the world. The surplus energy produced by the company will be supplied to us. We will therefore have access to renewable energy at a low cost, which will allow us to expand our offer, while helping to democratize crypto mining.
How would you define BitRiver in 3 words?
We are very proud because BitRiver has stayed true to its original vision: to provide online service almost 100% of the time so that our customers have peace of mind when using our services. Our solutions can be easily scaled up and are environmentally friendly.
Engineering student in IOT, Translator, Community and Bounty Manager, I have been sailing the turbulent oceans of Blockchain since 2017.
Aware that the Blockchain will change our future, I too am participating in the revolution. Find me on Bitcointalk, LinkedIn and Twitter to discuss or suggest articles.