How to mine Bitcoin and Ethereum, and 4 Altcoin investment protocols

  • Gaurav Budhrani and Alan Konevsky have left Goldman Sachs to join cryptocurrency mining company PrimeBlock.
  • The company operates 12,000 bitcoin and ether mining machines.
  • Budhrani and Konevsky have listed four proof-of-stake blockchain protocols that retail investors are currently purchasing.

Gaurav Budhrani and Alan Konevsky are two former Goldman Sachs employees who moved into the crypto space a few years ago. They told Insider that the exodus from mainstream finance continued in 2021 as institutional investments in crypto increased.

“2021 is the first time that I have started to see institutional investors participating in the entire capital structure of bitcoin mining companies,” said Budhrani, chief executive of PrimeBlock. “You started out with a handful of names like Marathon or Riot. But that’s definitely changed a lot over the last year – you’re starting to see institutional investors coming in and providing capital.”

Crypto miners use computers that aim to solve complex mathematical problems. The first computer to come up with a solution is assigned a block of cryptocurrencies.

PrimeBlock’s mining setup focuses on the two largest cryptocurrencies by market cap: bitcoin and ethereum. They have deployed 12,000 crypto mining machines at facilities in Alabama, Georgia, Kentucky and Tennessee. Konevsky, who is the chief legal officer of PrimeBlock, told Insider that the company is currently mining five bitcoins per day, which equates to almost $ 290,000 at the current bitcoin price of just over $ 57,500.

“There are three critical inputs to a cryptocurrency mining operation – capital, equipment and energy,” Budhrani said. “Mining has become an industrial scale operation.”

The two leaders explained why there are more opportunities than ever before in the North American cryptocurrency mining space and listed four proof-of-stake protocols that retail investors use to generate returns.

Crypto mining in the United States

In 2021, the United States surpassed China for the first time in terms of cryptocurrency mining market share, after Beijing decided to ban digital currencies. The market share of U.S. mining companies fell from 17% to 35% in the last quarter, according to data from The Block.

“China’s decision was primarily driven by domestic policy considerations,” Konevsky told Insider. “China is complicated, you can never predict it perfectly, but although the current system remains the same, you will see the ban continue until 2022.”

Budhrani added that in addition to political stability, the United States’ significant power infrastructure advantage has made it an attractive region for crypto miners.

“The United States has the largest energy grid in the world,” he told Insider. “A year ago, Kazakhstan was the second largest market after China when it comes to bitcoin mining, but now we are starting to see cracks in this market because they don’t have the same energy infrastructure. “

But PrimeBlock executives said they believe bitcoin mining is now out of reach for smaller players like retail investors and hobbyists.

“I think we are beyond the point where amateurs could directly participate in bitcoin mining,” Budhrani said. “It is extremely difficult for them to get their own mining rigs.”

“But there are certainly many other protocols in cryptography, where as an amateur you can participate in these protocols and generate rewards for that participation,” he added.

Budhrani has listed four proof-of-stake protocols – including competitor Bitcoin ethereum – that crypto investors look to to boost their returns.

What is staking?

Staking is a way for crypto investors to earn rewards without having to invest directly in mining hardware. Some cryptocurrencies allow owners to “stake” their holdings, earning a percentage reward over time.

“Investors don’t need machines – they just need capital to deploy on the network,” Budhrani said. “Retail investors are trying to generate significantly higher returns than they would if they invested in a regular savings account.”

Ethereum 2.0 upgrades recently made staking possible for ether token holders – and Budhrani pointed to this as one of the four protocols retail investors are currently using to earn additional returns.

“Hobbyists can still get involved in Ethereum mining for now, but it will transition to a proof-of-stake algorithm in six to eight months,” he told Insider. “The awards encourage participation as the network grows and the developer community continues to grow above those networks. “

We list the four protocols that PrimeBlock said retail investors currently use for staking, along with the price and market cap of their native token.

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