Mining 2.0 in Southeast Asia: Hunting for Digital Gold
Why one AI start-up pivoted to cryptocurrency
PHOTO CREDIT: Getty Images
Make no mistake about it: Interest in cryptocurrency is at an all-time high, and Southeast Asia is no exception. And with that, sadly, comes a gamut of unethical behavior. Cryptocurrency hobbyist Leon Lim Jiu He tried buying mining rigs from sellers in Singapore and experienced this first-hand in the form of over-promised rewards, guaranteed warranties that could not be claimed, or models that were no longer ideal for mining.
“One seller even turned up with an entirely different product offering altogether. I spent a total of $40,000 of my hard-earned money across a series of such sellers. My friends were concerned and discouraged me from continuing,” Lim says.
But Lim did not follow their advice. Rather than be discouraged by the loss, Lim simply wrote the $40,000 off to market research. He then pivoted his artificial intelligence software (AI) and chatbots development company toward cryptocurrency.
After only three and a half months under this new model, what became the Mining Rig Club (MRC) earned $1 million in revenue.
Here’s how they did it: MRC offers one signature product, the “Juicy Rig,” that can mine ether and 12 other coins. MRC equips these rigs with their proprietary software and firmware and offers hosting packages to users who want to mine.
“This is a process in which servers contribute computer power to solve algorithms in the blockchain and get rewarded cryptocurrency for it,” Lim explains.
MRC’s current local farm spans 5,000 square feet, but they are looking to quadruple this size within the year. Some of the rigs owned at this facility belong to small ticket customers who want to ride the cryptocurrency wave with one to five rigs to their name. Lim says there is also a fund structure for their larger ticket investors such as K2 VC which has backed the likes of Facebook, Uber, Spotify, Airbnb, and Alibaba.
Though cryptocurrency enthusiasts are often more bullish on some coins more than others, MRC could be called coin-agnostic. Miners can choose which coins to mine and when to sell them off. Lim likens the mining industry to the server business in the early days of the Internet. “So long as you are bullish that Internet will be here to stay, the server companies will always be in business,” he says.
He believes that cryptocurrency mining is less risky than other aspects of the blockchain ecosystem. “If you buy 10 Ether and the price drops to 0 tomorrow, you are stuck with 0 value. But if you buy a machine to mine Ether and the price drops to 0 tomorrow, we simply mine another profitable coin using the same machine,” Lim says.
Though cryptocurrency mining may earn some a healthy passive income, Lim says that MRC tries to educate potential customers before they make any decisions. In fact, MRC’s logo is a shield behind two pickaxes because Lim wants the company to be a defender of the industry, particularly as it becomes more mainstream.
“If nothing is done to educate the people, more victims will be created and people will start viewing cryptocurrency mining as an unethical business. We cannot change how others do business, but we can execute our business plans faster and educate the market in our way. This is the responsibility our team took on from Day 1,” he says.
If mining 1.0 involved people investing money to mine gold and oil in hopes of selling them at a profit, Lim calls mining 2.0 the era of people mining cryptocurrency, and he has big plans for the MRC.
“Our short to mid-term plan is to host 1000 of these servers in Singapore, and grow our data centers in China and Georgia. At this stage, we’re not looking to make a huge profit. We are constantly reinvesting in every part of the business, from operations to the software,” he says, adding that their goal is to create an ecosystem around cryptocurrency mining.
BY Entrepreneurs Organization