"As long as cryptocurrency market persists, cloudmining will exist”
- Hashnest CEO Rob
On 19 April 2019, Hashnest CEO, Rob, sat down with China's digital finance magazine, Cailu (财路, Cailuw.com), to discuss our achievements, views on today’s cryptocurrency market and hopes for the future.
CAILU: Hashnest was founded in 2013 and is a cloudmining platform under Bitmain. Can you briefly tell us the birth of Hashnest and your plans for it?
ROB: Hashnest was initially known as Snowball.io and was nothing more than an exchange. It was only later it became a cloudmining company. In 2014 I got to know Wu Jihan, and the company was officially bought over by Bitmain in July. We rebranded it to “Hashnest” and swiftly it was launched in September.
It has been over 6 years since the creation of this company. Our users have also been rapidly increasing; we have over 320K users now!
This year, we decided to become independent from Bitmain. That being said, we hope that we can introduce a larger and diversified variety of products to our customers. All thanks to our very loyal users, we have grown so much and we look forward to meeting new customers. We aim to bring a new, personalised cloudmining experiences for everyone.
CAILU: There are many companies offering cloudmining services out there, such as Genesis Mining, BW.COM, Oxbtc, etc... How does Hashnest stay competitive?
ROB: Indeed cloudmining services are becoming more and more prominent. We take it that the cloudmining industry is looking optimistic and promising. Those companies that you have mentioned have been in the this business for quite some time and they are really good at what they do.
When we first started out in 2013-2014, people mostly mine for the coins at their own infrastructure - be it at their home, basement or office. Slowly, mining become industrialised and people move on to mining at a larger scale but it requires more than just buying and using a miner. For those who preferred to mine without the hassles and difficulties of managing mining at large scale, cloudmining seems to be a very suitable solution.
We do have a few advantages over the rest. One special thing about us is that we have been supported by Bitmain, and you know, Bitmain is a market leader at chip and hardware manufacturing. Moreover, there are two very dominant mining pools under Bitmain - BTC.com and Antpool. Working with them has enabled us to secure hardware, infrastructure and technology at a better price.
It is also worthy to note that we provide something what most companies don’t - a trade market at Hashnest, where our users can sell or buy hashrates with coins freely. We want to be less rigid with our customers and this flexible trading system allows them to choose what they want best for themselves; they can also react quicker and adjust their plans when looking at the market conditions.
CAILU: While cloudmining has changed the way people mine for coins, the profits are gradually decreasing. Will this affect cloudmining and how will its future hold?
ROB: I guess as long as the cryptocurrency market persists, cloudmining will exist! If we were to look at this long term, the mining industry itself will never cease to exist. Even though profits rolling in at a slower rate, we must accept that it is a trait of a maturing industry.
Like any other maturing industries, the strongest players in the market will emerge through this industry’s growth and decline, allowing our risks and profitabilities to stabilise and mature.
Mining itself possesses high risks and of course, high returns that make people keep coming back for more. Now that we are in the bear market, high returns are not making any sign of arrival yet and what’s only left is the high risks. But a bear market should not make us sweat, large cap investors will get through and be ready for the subsequent bull market.
CAILU: From a customer’s perspective, we understand that cloudmining works around remote mining. Looking at how mining is profitable as before, how does Hashnest protect the interests of your customers? What makes your customers earn?
ROB: We believe in “survival of the fittest”, especially so in such a market. We have been putting extra hours and efforts to expand our business globally so as to minimise the risks and utilise international resources to introduce more unique services, which will in turn protect our users’ best interests.
What’s so charming about Hashnest is that we have versatility when it comes to finding ways to profit from mining. Beginners tend to focus on the daily payout, which is vastly affected by currency, electricity costs, mining difficulties and mining plan cost. As for those experienced cloudmining users, besides profiting from the daily payout, they thrive by using hedging practices to reduce and control their exposure to risks.
On top of all these factors, I think that the #1 factor that customers use to measure how good a cloudmining platform is credibility of the brand. Hashnest is longest running cloudmining platform, and we are proud to say that we have not once breached any contract and lost our credibility.
CAILU: After users have made their purchases on Hashnest, they would receive their payouts according to how much hashrates they own. How is the payout calculated? Using Bitcoin’s current price, show us an example how much payout would a user receive?
ROB: Payouts are allocated based on Antpool’s mining data and PPLNS reward system. The mining data and block information are available on Hashnest website; Data transparency is our belief. When the miners are within their warranty period, we can assure a 100% uptime and miners malfunctioning or power outrage at the mining farms are on us.
Look at this screenshot, taking S17 as an example. A single TH/s brings about a payout of 0.00004 BTC. The electricity cost takes away 33% of the payout, making the profit to be about USD$7.
CAILU: Some say that investing in cloudmining after the bear market has waned is a good idea, what do you think of it?
ROB: Well, I feel that mining during the bear market is akin to putting your money into the stock market’s lowest point. As the market recovers, the currency increases and the payout ratio decreases - which means your profit will increase by quite a margin.
CAILU: When users have made their purchases on Hashnest, they trust that the miners are deployed for real time mining. It does seem like this part is not heavily monitored. What do you think a cloudmining platform should do to make customers trust that it is really mining for them? Might a strict monitoring become a thing for future cloud mining?
ROB: Users can choose to automatically convert their mined bitcoins to USDT or ZEC to BTC. But I don’t recommend changing your coins to USDT now, bull market might be a better time to do so.
The first thing customers should look out for is the platform’s credibility and history. Check if it’s backed by a big, reputable company.
Secondly, check the transparency of their mining data. Lastly, check the terms and conditions of their cloudmining plans. Some companies may scream low costs but it’s all nothing but wordplay. Most of the time there are hidden charges.
We do hope that cloudmining can monitored, just like how coins exchanging platforms are currently, so that cloudmining can grow well. At the same time, this can effectively eliminate illicit companies that claim to be cloudmining platforms but scam customers out of their hard earned money.
CAILU: There are already so many good cloudmining companies in the market, but there are still people who just take advantage of its popularity and do something unlawful. How should people differentiate?
ROB: As mentioned, research on the company’s background. Find out about the brand, its credentials, who are its investors, for how long it’s been operating.
Your first choice should always be those long running and solid companies, especially those who can stand unshaken and resist high risks during a bear market. Also check the terms and conditions.
One more thing, never trust anyone who says “Get your return in 30 days!” “Get your return in 50 days!”. What a user should be looking at is stability and safety, otherwise everything you were promised is nothing but fleeting clouds.
CAILU: Besides trading hashrates, I see that Hashnest offers customised miner hosting and cloudmining services. Does Hashnest's cloudmining service also serves as an entrance to digital asset management?
ROB: Hashrates sold on Hashnest not only can be used for mining, they also can be tokenised and be used for trading.
For people who are new to cryptocurrency, miner specifications, hashrates...these numbers are foreign to them. But if we could align and label them as a financial product and provide similar contract-based services, customers might find it easier to wrap their head around it.
Because mining is very high risk project with high capital requirement, especially at a large scale, it has put off many customers who would like to start small. But cloudmining is very ideal for them. We are aiming to bring on board such small financial products in the future.
CAILU: Some feel that hashrate is more than just a computing power for mining cryptocurrency, it in fact has properties similar to a digital asset. And this is a gateway to digital asset management, which could bring about great opportunities and challenges. Do you agree?
ROB: Mining itself requires huge capital. It is also the source of the coins. The cloudmining products you see on today’s market has a shelf-life so it can be considered as a short term AIP (automatic investment plan). If we could classify these mining products according to their risk and returns and make them into financial products, I think it would sound really brilliant and limitless.
Hashnest will also be slowly transforming into a digital finance platform. We will be integrating loans, asset management, financial plans to become a more wholesome cryptocurrency-financial platform.
This is originally a Chinese article which has been translated by Hashnest.