Six months ago a couple of friends and I started some small scale cryptocurrency mining in Nova Scotia for the fun of it. We’d all worked together before, in some capacity, building and operating some of Canada’s early cloud infrastructure companies, so we figured we could apply our expertise in data center operations to crypto mining operations. As time went on, friends and family started reaching out and asking us about the project. The common feedback was “I want to learn more about cryptos and get involved… But i’m not technical..” After some brainstorming we thought, “what if we built a mining cooperative for our friends, family and community?” We’d take on the work of mining operations, and all club “members” share in the costs and proceeds.
The Crypto Noob Club was born!
Financing the Crypto Noob Club
Any Infrastructure operation is capital intensive and none of us are wealthy, so financing this project was our first challenge. We thought about different models, but the one that made most sense was to crowdsource the capital required to build out the operation. We proposed the idea to our friends and family. Everyone would share in both the costs and proceeds of the operation. We envisioned the concept of “seats” where each seat was worth a certain amount of crypto as a membership fee, and each seat had an equivalent amount of hashing power. Members could buy an unlimited amount of seats. Once we had the buy-in from our initial club members, we sold our first round of seats providing the club with enough capital to purchase our first miners.
Our Mining Strategy
When we launched the market was still hot and sourcing miners are difficult. We waited over 2 months for our first order of miners to arrive. During the waiting period, the market crashed (more about this in our post: Lessons Learned From Building a Cryptocurrency Mine During the Biggest Boom/Bust to Date. We knew that we needed to come up with a mining strategy that would maximize our returns and reduce risk during the market downturn. We introduced a concept that we dubbed “speculative mining,” where we would opportunistically mine altcoins that:
- Solve real world problems
- Have a strong vision and founding team
- Is early enough that mining difficulty is low.
We were confident in the strategy, but implementing it was easier said than done. First of all, this strategy requires a huge time investment in researching mining opportunities. Secondly, we needed to ability to switch the coins we were mining quickly to take advantage of market opportunities. At this point in time, we were manually configuring our mining rigs, which meant that “coin switching” was too slow. Our first major development project was to implement some basic automation that would allow us to isolate individual miners and create scripts to automatically configure them to mine the coin of our choice in real time.
Since implementing our coin switching automation we’ve cut the time it takes to switch coins by 10x. While this hasn’t solved our research time constraints, it allows us to spend more time researching and less time configuring miners. This agility has resulted in the club mining tens-of-millions of coins from projects that we’re proud to be a part of in the first two months of operations.
Our mining operation is currently setup in a co-founder’s garage. We’ve retrofitted some old metal filing cabinets to become our mining racks. We are running several ASIC-based miners that mine Litecoin 24/7, as well as a growing number GPUs which we use for our speculative mining efforts.
We meticulously track the club’s block rewards each month and members have the option to withdraw their portion, paid out in LTC. The club will trade off an asset when we’ve felt that it is becoming overvalued or has reached its peak.
We are 100% transparent about club operations with our club members. Members receive monthly reports about club performance, what we’ve mined, the total value of what was mined, electricity costs, capital purchases etc.
From the beginning we’ve been open about our roadmap and have featured it on cryptonoob.club. We’ll continue with the speculative mining and work to make operations more efficient in two main ways:
We plan to invest in renewable energy generated by solar and/or wind to lower the club’s operational costs as close to zero as possible. The first step is to install a bank of batteries that will be attached to the grid. By day, the miners will run off of the batteries and the batteries will get their power from the grid in the evenings when power costs are cheaper. The next step is to remove the operation from the grid completely and charge the batteries from solar generated power.
For more information on our renewable energy plans, check out our post: Blockchain’s Energy Problem and the Need for Renewable Processing Power
Data, Monitoring and Automation
Being infrastructure guys, data, monitoring and automation is ‘right up our alley! You can learn a lot from data if you have the right tools. Our hope is that investing in this technology will provide us with the information required to make good mining decisions and ultimately a better return for our members.
Follow our Journey
Considering this all started out as a fun project, we now have high hopes and big plans for the Crypto Noob Club. We’d love for you to follow our journey and sign up for our monthly newsletter where we highlight what we’ve mined, new gear we’ve purchased, new content and updates on our roadmap.
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