Is Sergey Brin’s Ethereum Mining Operation Running on the Cloud?
One person you might not expect to see at a blockchain event is Sergey Brin. The Google co-founder was seemingly a last-minute add to the event, which took place in Marrakesh and was hosted by Richard Branson. Incidentally, the FANG stocks have been surprisingly accepting of their decentralized peers.
It’s well known that Apple Co-Founder Steve Wozniak is a bitcoin bull, and now Brin disclosed that he operates a mini Ethereum mining operation with his 10-year old son, according to Forbes.
— Michael del Castillo (@DelRayMan) July 8, 2018
One Twitter follower wants to know if Brin is using the Google Compute Engine to create more ETH, or cloud-mining. Reddit members have suggested that using Google Compute Engine for mining is not a profitable endeavor.
Meanwhile, the price dynamics for mining Ethereum have been a roller coaster, with the ETH price having surpassed the $500 threshold over the weekend for the first time since June 21, according to Coin Market Cap. The ETH price has since retreated back below $500.
It’s unclear when Brin and his son launched their ETH mining operation, but what is clear is that falling crypto values have eaten into profits. As PC Gamer described, last year at about this time, a miner of ETH using a “GeForce GTX 1070 graphics card” for mining ETH would have earned a daily profit of $6, which amounts to a little less than $200 per month after electricity costs.
Today, a similar operation would only deliver a little more than 50 cents per day based on the same hashrate, which is a reflection of the capacity to mine new coins. So clearly the economics of mining Ethereum aren’t as attractive as they once were, but things can change on a dime in this industry.
Miners Flock to Japan
Cryptocurrency miners are increasingly flocking to more rural areas of Japan to set up shop. Cities like Fukui, which boasts approximately 250,000 residents and borders the Sea of Japan. The cool sea breeze coupled with cheaper electricity costs in the region is an ideal spot for bitcoin miners to operate, and that’s exactly what Tokyo-based Alt Design has done, according to Nikkei Asian Review.
Alt Design mines both bitcoin and Ethereum at an abandoned factory in Fukui. The operation is comprised of 500 servers that run constantly and give off an extreme amount of heat that require around-the-clock cooling. Nikkei Asian Review suggests the operation’s monthly production is approximately 200 ETH, which at current rates amounts to about $86,000.
Alt Design’s Chief Analyst told the publication: “Industrial-use electricity is cheaper [in Fukui] than in Tokyo, and we can cheaply rent a large space that fits all our equipment.”
Fundstrat Co-Founder Tom Lee recently pointed out, the difficulty for mining bitcoin is increasing. “The reason bitcoin looks really good here is the cost of mining around $7,000 fully loaded. And the difficulty is rising. So by the end of the year, it’s going to be $9,000,” Lee said to CNBC.
Featured image courtesy of Shutterstock.