#011 Alejandro De La Torre - Crypto Mining Tools Podcast

In this episode, we interview Alejandro De La Torre of Poolin. Alejandro has 7 years of cryptocurrency industry experience with multiple acquisitions. Currently, he is VP at Poolin.com, a multi-currency mining pool. He was previously VP of BTC.com & BD at Blocktrail.

Transcription

All right. Hey, everybody, thanks for joining. Everybody, welcome to the 11th episode of the crypto mining tools podcast. Today we’re here with Alejandro and Ethan, our cohost. Hi. so yeah Alejandro you are currently with Poulan. Yep.

Yeah. So, yeah, go ahead.

Well, why don’t you tell us a little bit about how you got there and where you’re located right now and and yeah, go ahead.

Okay. Well I’ve been in crypto for a while. I was a part of a btc.com before I was joining Poolin. So I’ve been in mining for many years helped build out BTL con from the very beginning. I was there from the cofounding team. And we built companies to one of the largest mining pools in the world, still is one of the largest Michaels up to that. I decided need a little change. So I moved into Poolin and plants and growing very strong in the last couple months. We were actually number one in mining hash power for Bitcoin. Also number one in light coin, Z cash, Raven coin. And we, and we were, were pretty high in other coins too, so we’ve been growing very strong. The team at UHIN and it’s also former BCL comm guys. So we’re, we’re very happy to very happy to bring in some new pools to the mix and get the old guard down, bring the old guard down.

Right on. Yeah. so I’m curious like tell us a little bit about, to you personally right now you are located in Germany, but that’s not quite where you’re from,

Right? Well well where I’m from is a long story, but I’m Spanish but I grew up in many countries around the world. I just moved to Germany where we just opened up the internet international office for Hulu. Before that I was living in Holland for many years where I had the BTL comm office where we have the detailed calm office. And yeah, Germany is a burden. It’s a great city and a big city and booming and crypto. There’s a lot of crypto companies love crypto people around here. So I thought, Hey, let’s move to Berlin and do the office here. And Germany and Holland is not too far from Germany, so it’s a great, it’s a great, it’s great. It’s a great deal for me.

How so many languages do you speak? Yeah. Tell us about that.

I speak fluently four languages and I speak Portuguese pretty well too, so far. And I’m learning German.

That’s awesome.

I hope to learn Chinese one day too, but I will have to live in China to that.

Yeah. Difficult

To learn it all that, that’s about four or five more languages than I know of. So yeah. You bet. In Europe you need a Europe view that you’re always talking to other people and you just, you just pick it up. And I know how a lot of people always criticize the Americans. They don’t speak, they only speaking English, but it makes sense. I mean, America is bigger than the United States continent. The United States country is bigger than all of Europe. So it makes sense that, you know, it’s not that common. Maybe Spanish would be good for you guys.

Yeah. Here’s a, here’s a cool question. Which country has the most English speakers in all the world? China. Sorry. No, that’s right. Yeah.

Yes, I know that. That’s a good, that’s actually pretty interesting. Yeah.

We should have a like a skill testing question for every, every podcast episode or something. Right. So Alejandro, why, why don’t you tell us a little bit about Poolin and what makes you guys different and and better. Sure.

For sure. Well we, since, since we have many years of experience, we’ve kind of pinpointed all the issues over the years that miners have with their operations, with, with their farms, and we’ve just been continuously trying to provide the best way forward for these minors. Be it through tools. We have many, many tools to, for example, take the heavy load off the miners. You can manage all your farm of just one computer, for example. Proxy servers. We have, we have very many tools which pinpoint the issues we’ve seen over the years. Another, another very strong thing that sets us apart from most of the schools. The service, a lot of these pools grew very, a lot of older pools grew very fast, very quickly, and they kind of let service go by the wayside. We’d started to just put service as part of one of our like fundamental pillars.

So whenever we have any issues, we guarantee us 78 hour response no matter where you are. These, these types of things that we, couple of things that we do for service really sets us apart from other pools. And, and, and finally of course is the technical side. We have like the founding team at pooling are very strong in, in technical in the technical side of mining. They built BTL compo, as I said earlier, and now they built a pool in pool. So there are the they’re probably the best. I mean, of course I worked for them, so I say that right.

Yeah.

Honestly, I think there are one of the best, if not the best in terms of the technical side. I mean, it’s less pool and that’s, the pool guys are also quite strong and it’s good. It’s good that we have competition with them. I mean competition great. And we’re happy to always compete with, with, with them. But yeah, that’s, that’s, that’s what has that in, in a, in a sh and basically put a long story short. That’s what’s actually helped us grow so quickly and so massively in the last six months.

Now we’ve, we’ve had a few guests on here that have been in your industry and one of the kind of questions that have stayed in my mind is what, what does it take to make a pool? So you know, do, do I just need like a few 10,000 miners and then I, you know, just some special software and then I can make a pool or like what, what is the difference between a facility that we see that has 10,000 miners that are mining and what you’re doing.

Okay. That’s a good question actually. So what you’re talking about is what we refer to as a mining farm. That’s basically nothing to do. Have a pool, a pool, basically aggregates all the mining farms together, hence the word mining pool, and then shoots all that, all that hash power towards the Bitcoin Damon or Bitcoin. And that increases the chances of the whole entire pool finding a block because the more horsepower you have, the higher the probability is that you will find a block. So, so there’s naturally no mining involved in the mining pool. We the company itself doesn’t mind. Right. We don’t mind. We have some minors in the office of course, to do some testing, but that’s it. We, we just, we just have hardware that aggregates the hash power and, and shoots it up as Bitcoin Bitcoin or [inaudible] or light coin orZ cash, which then increases the chances of a finding on block, which then allows the mining farms to forecast,uand find, you know, basically what if you, if you’re a mining farm, you, you would want to mind who will pool because the chances of finding a block consistently increase.

If you do it by yourself, you’re basically competing against these pools and it will be very difficult. So it’s a, it’s in the interest of mining farms to join a pool and pools also, you know provide many different services like I said earlier, which helps build the building industry forward. I mean, it’s it’s a, it’s, it’s been a natural evolution of mining. Now in the beginning you can mine with your, with your laptop and then evolved into a FPGA and, and a graphics, GPI, graphics card, GPU. Then, then they evolved to eight, six, and eight. Six. What basically the evolution, what that is, is an evolution of the hash power that how strong the machines can hatch per second. Eight, six are extremely high. Six do only one thing and one thing very well in this case, my Bitcoin. So, so it’s only, it’s only this, the evolution of the whole entire industry and the mining aspect of,

Well, so I, I have two questions and one of them is from, from the audience, but I will share that in a second. But so yeah, going back to Ethan’s question about 10,000 miners, for example if somebody has a farm of 10,000 miners, are, are they going to be trying to do solo mining or are somebody at that scale are going to be just joining a pool? like Poolin

Soda mining would require, I think, much more minors in that. I think no, there would be joining the pool. Yeah,

Yeah, yeah. Okay. Yeah.

Okay. So here’s my next question and sorry, Craig, we will get to you, man. Just hang in there. So, okay, you’re a pool and you’re aggregating all of these farms and their hash power towards solving the block. Let’s say the block gets solved. What happens next? Like, I mean, does the pool have a wallet that the, the, the block reward goes into and then that reward is disseminated out to the miners from that, from that pool wallet? Or is it just somehow magically spread out to everyone who through hashtag like, yeah, what happens when, when that block is solved?

Yeah, so it’s quite straightforward. There’s no complex, it’s not very complex actually. We do have a wallet and we do daily PEO, so, and then we just calculate how much hash power you put in. Let’s say you put in 10% of our pool, then you get 10% of that block and we throw fees in there. It depends. There’s different schemes pay out schemes for Bitcoin, we include the fees. For other coins. We, we, we do something else. So every, every different point has different payoff schemes. But yeah, every day we have a daily payout or, or you can, you can you can also set that up in your, in your account yourself, how you want to get paid if you want to get paid daily or a week. I don’t know. So it’s up to up to the miners, but yeah, we just have a wallet and we send it out.

I, yeah, I guess what my question is, is as, how does that block that’s been solved? Know what wallet to pay.

That part. Okay. Also, so you’re talking about the Coinbase reward. So you’re talking about basically the block being found

Block is found. How does it know where to send the reward to?

It’s part of the Bitcoin. I mean this is how it’s been going since day one. So it’s basically if you’re the miner who discovers the block, it sends it out to who? To, to the miner. There’s an address that you can put down and then from that address we are in control of that address. And then we send it off

And then you disseminate out from there. Okay. That’s, that’s what I wanted to know.

It’s a part of that actual built in part of the algorithm.

Yeah. Part of the protocol. Yeah.

That protocol. Yeah.

So when, when you’re aggregating all of this hash power, you’re also including a wallet address to send a block reward to in the event that one of those hashes solves the block.

Yeah.

Okay. Got it. All right. We got Craig Mullins and he’s asking he wants to know a little bit more about how to start your own pool. So how would somebody go about doing that if they want to take on that kind of adventure?

Well good question. I think I think you would, you would need a very strong technical knowledge of Bitcoin, number one, or which are cornea in intending to mine, let’s say you can also might need theory for example, or light coin. You wouldn’t need very strong technical knowledge or someone that has very strong technical knowledge of how the protocol works. Then you will need to invest in hardware. There’s some specialized hardware for pool. And then basically at the name of the game is a sales and marketing. You have to find minors, you’ve got to set up deals, you’ve got to market your pool. You’ve got to go to conferences, the whole, you know, the dentist, just straight business. But in terms of setting it up, you would need also on us. Another thing too to consider would be regulate regulation and regulatory.

There’s a lot of regulation nowadays in crypto and some areas of the world are not so good, set up a pool or, or somewhere is, are better for to set up a pool. So you would also have to look at the regulations involved with handling funds in and out and these sort of things. So it’s it’s it’s not, it’s not a simple thing to do. But it’s possible. And, and, and we, there is definitely open source options. For example between comp fool the former pool that I was a part of is open source and which, which has helped the industry massively. We believe. And w w I know, I know because I’ve seen many pools sprung from this open source school. So there is open source options and you can then set it up there. But if the name of the game is really just trying to find mining farms to join your pool, and of course if you have the more hash power you have the, the, the better your chances are to find you minors because the chances, the chances of finding a block with your pool, since you have high hash, higher hash power increased.

Nice. Could be miners would make a fool that has some kind of power instead of one that has nothing. So, and they call that luck. Right? You’re, you’re basically increasing your, your chances or your luck by having more hash power.

Yes. No, no luck. It’s, it’s more luck. There’s more to do. Look, it’s basically a a

It’s the block solve rate against the average amount of hash power, isn’t it? That’s

It. Yeah. So it does. Thank you. That’s the that’s the, that’s the, that’s how it works. But anyone can have more luck than the other. So let’s say if we have a lot of hash power, we don’t necessarily, the lock can be low for us and the smaller pool can have a lot of luck. So like it really, they had luck. It’s just a, it’s luck. It’s

Luck is luck. So Alejandro, in your STD and your estimation, Alejandro, how much hash power does one need? And this is again kind of falling with, with Craig’s question. How much is the minimum? You would say that’s how much you need to start your own pool?

Well, I dunno, I don’t know.

I mean, or are we talking petahashes are we talking to ed ashes?

No, but I mean, look, it really, really matters. It really does. It really, it really, it depends on many, many, there’s many aspects to this. I mean, you could, for example, have have your own private pool where you have your own.

No, good luck

If you can. You can have your own private pool which, which you have your own mining funds. Let’s say you have a, you know, a lot of miners in the area and then you do your own private pool of these guys because you don’t want to work with the pools over there or whatever it is. So it really depends. You can really set things up in a way. I mean, I wouldn’t, I wouldn’t, if you have, if you have, you would need some capital to get started. But you can, anyone can do it. Anyone can do it. I wouldn’t, I wouldn’t be, I’m not trying to discourage anyone from trying. That’s what I’m, that’s what I’m trying to get.

Okay. So people aren’t starting their own pool just keeping it to themselves. They really want to have the goal of growing it and having other minors join, right?

Yeah. I mean the business model is quite straightforward. It’s with basically we take a fear of, of block of phones. So the more, the more block star found because it’s more as far as you have, the more fees you get. So that’s that is, that is the, that is, that is, that’s how we make money.

Yeah. Let’s go back to, hold up. Craig is asking something similar to what we were asking. So I, how do you know what it takes to successfully sold a mine Bitcoin to, to get like one, one coin a day or something like that? Like what, what might it take?

Well, this is one of the questions I get a lot and it’s it’s, there’s many different factors and variables you need to consider. You have [inaudible] you have the cost up front, cost of the or the initial down payment of the minors. Then you also have the the cost of the operation of your farm. So, so what you do is then you take those variables. We have [inaudible] dot com we have actually a mining profit estimate calculator, which you can enter all these variables like electricity costs, the power of the minor the difficulty of the Bitcoin network because you need to also always consider the difficulty with Bitcoin that works. The more miners that are entering the Bitcoin network, higher, the difficulty gets, the more difficult it gets to mine. Bitcoin and, and, and alternative. Alternatively, if minors need Bitcoin, the difficulty decreases that it’s always the, the, the, the protocol.

We have to have a 10 minute time, a 10 minute block time. So that’s a, that’s what has to always hit. So this copy increases and decreases to always have that 10 minute block time. So this is another variable you need to include into your mining profitability calculator that we provide and many other pools provide it to. And then you can find how much it costs to mine. One Bitcoin and day. It’s so, it really depends on the minor electricity costs, difficulty, your initial costs, then you can then, if you add all variables together, you’ll be able to find the number.

[Inaudible]. So a calculator, that’s, that’s a good thing to have to try to figure that out, obviously. And then, so part of this question was about solo mining. But so, so I’m, I’m wondering who out there right now is solo mining. BTC.

Well, I think, I think the people who are sort of mining B to C right now don’t want to be known who they are. So I don’t know who they are.

Yeah,

Yeah. Because yeah, that’s sort of money for their own reasons, but, but it’s, it’s really hard to sort of mine, you need to be massive in order to compete against schools because remember, pools are aggregating many farms together, many really big farms. So, so as a solo miner, you need to compete because there’s the difficulty of Bitcoins to compete against, against the mining farms because the money part of increasing difficulty and the mining pools. So then if you’re solo, you have to, you have to, not only you have to compete with the mining pools, but you also have to consider the difficulty of Bitcoin. So it’s, it’s, it’s it’s, you cannot, in the beginning you couldn’t mind a solo mine. Not, not really any, more or less. You have a really massive operation. Okay.

Now, Alejandro, tell us a little bit about security and just kind of some of the issues that happen behind the scenes that a lot of people don’t know about pools. Like it’s been brought to our attention that slush pool has had some difficulty with their luck lately and it’s been suspected that they’ve been given what are called like a, I forget what it was referred to, like dead shares or or something where yeah, no, stale. Stale is a little bit different. That’s between you and your, your connection with the pool. But in essence they were, they were given like dummy hashes or problems to solve and, and it was just, you know, tying things up on their end and preventing them from actually being able to hash to tell. You can tell us a little bit more about that though. I found that fascinating.

Well, this is the first time I ever hear about this. Oh really? Yeah. I’m nervous. This is a, this is, I’ve never heard of this attack is this, if this is true, then this is a big problem.

Yeah.

Well, maybe, maybe that’s why they’re working so hard on a stratum two or, or whatever it’s called, you know?

Well, I can talk about that. I’m starting to, version two is pretty good. It’s not, it’s not pretty good. It’s really good. And yeah, pull in, pull in. It’s actually starting dif well similar open source protocols called the Bitcoin universal mining for call bump for short. We will have more information on that soon. That’s a Q one. Q two latest. But yeah, well basically what, what these what these new stratum portable calls, new upgrades to to mining do is give much more power to the miners. Because now with strata version one, one of the things that we could, that a mindful could do is they can actually choose which transactions to include into the block, but we’re straddling version two. The minor can actually choose that. So it gives us a little more power.

It gives less power to us and more power to the miners, which you know, in the ethos of Bitcoin. And that is great. So that’s why we’re also working on an open source mining protocol as well. And that’s why w we’re, we’re we know, we know the guys sociable very well and and we’re also, you know, I think it’s great cause they’re working on their own thing and helping, I mean, at the end, ultimately you were still sort of small industry now it’s not that small anymore. And when I started it was much smarter, but we were still all friends here and we’ll have to work together to help bring this revolution forward. It’s Bitcoin forward. So any, any, any open source technology that is hoping everyone is good for everyone. But yeah,

Yeah, absolutely. Yeah. Now, you know, recently the, everybody kind of knows this, that’s in the industry. The, the price of Bitcoin is, has been down and you know, for many, many miners now it’s no longer profitable or it’s just barely profitable to continue mining. Yet, you know, the, the hash rate and the difficulty are still kind of remaining at all time highs. Can you give us your thoughts on that?

Yeah, sure. That’s a, that’s a, that’s, that’s actually pretty interesting phenomenon that’s going on right now. I have a lot to do with the new miners that have been coming out and the new minors that [inaudible] by been made the end twenties by what’s minor are four to five times stronger than the older generations. And that, that, so, so what happened was a lot of the mining farms or the law of the miners went ahead and bought a lot of the, a lot of the new this new age minors and start switching them around switching them from that night from the older generations, the new ones, which increased their hash power by a substantial amount. So I think I think another thing, another reason why it has power continues to increase is because I believe many miners and the industry as a whole is kind of just kind of getting to a point where people really do believe in Bitcoin.

I think I think many miners are betting their house basically, or their, their whole entire company on that. Bitcoin is not going to go anywhere and a year or two maybe it’s going to go down and may continue going down, but they’re going to continue to mind because they see it going up eventually. So I also believe there’s a, there’s a element of that in there. But yeah, what’s interesting is all of these new, all of these new minors are making the airlines obsolete and that generation. So it’s very interesting to see where a lot of these us are, are, are like and the Nepean they’re ending up in places of the world war II where it should be is really, really dirt cheap. But the security risk is higher. So it’s it’s an interesting development. It’s going to be, it’s going to be interesting. I mean, a lot of the other things are already going offline. It’s gonna. I only, I can only speculate what’s going to happen, but it is a very, very interesting time to keep an eye on my knee.

Yeah. What now, what would you say happened to the ant miner [inaudible] you know, back the other year. Do you think it’s kinda the same thing that’s happening right now? Cause the [inaudible]

Oh yeah, yeah, yeah. So there’s similar, very similar. Yeah, but the thing is that night, if there was a lot, a lot more [inaudible], that’s the main difference there. There’s, that’s like powered Bitcoins for the last two or three years. Like that was, that was, it was all on that generation of miner has nights mostly, but there was also all the other minors. But yeah, it, there was a lot of millions of assigns out there. So now we’re seeing a lot of meetings where it’s like turning off. So that’s going to be, I dunno, we’ll see.

Yeah. As nights were kind of a, the backbone of big coin fair for a while.

Okay. Well it’s most definitely. Yes. Yes.

Yeah. And I just have one more question to you. And again, this kind of refers back to what Scott was saying earlier. What can users do to prevent stale shares and rejects, rejects, shares with your pool? Like that’s been brought to our attention as, as a big problem. One of the things we were told is, you know, make sure you connect to a pool that’s very close to your location. What are some other things that, you know, that can be done?

That’s that, that is mainly on down to us as a pool. We have, we have nodes in basically every major geographical location around the globe. And and you’re automatically, it’s a dynamic connection, so you automatically connect to the, to the node that is the closest to you. And yeah, I think, I think I think still shares and all that stuff. I mean, you just need to have adequate bandwidth. Right. And I think, I think it’s it ultimately, it really goes, boils down to the pools and if the pools, and I think, I think we’re doing a pretty good job. And that, that, that that department we’re doing good. We’re, we’re good today.

I mean, yeah. And you also mentioned that, you know, you wanted to make yourself different than the other pools through your customer service. Can you give us an example of that? Like what you do different versus other pools?

Yeah, yeah. Well, I mean, one thing that we do different is that we also, we just opened up an office here in Berlin. That’s why I’m here in Berlin cause I’m opening an office for pooling and that at the international arm of Poolan. So we’re, so, so we have, you know, people that are native in their own lab in the, in like English or Spanish or Russian and, and they’re debased in Europe. That’s that always says very good for those time differences from any minors. So that’s, that’s one thing. But yeah, we, we, we, we guarantee a seven to eight hour response time, no matter where you are. And no matter who you are

No matter how much tax rate you have,

Right.

No. Well, I mean, I mean if you have one minor, it might be, may, may take a little bit longer than the guy who has 1000 miners. But but no, we, we, we, we provide and we’re also trying to, and not, we’re not trying, we’re going to, we’re going to have other systems in place to help, you know, the more local or the more you know, smaller, smaller scale of minor as well.

Yeah, no, a one, one last question from me before we close. I’ve heard some other pools talking about profit switching technology and AI and those things. What are you guys looking into that, or do you currently offer that solution?

Yeah, so I dunno about AI. A lot of AI marketing I had my, my opinion but BTC, we have a BTC BCH, so Bitcoin, Bitcoin cash hash rate, auto switch. What it ultimately does is that in the backend we have everything set up so it switches the, if you minors have to choose deduction, they, it’s optional. But if they do in the backend, what will happen is if the difficulty decreases in, in Bitcoin cash and the prices the, the difference between price and difficulty is profitable for, for that minor at that particular time, then the hash rate switches off to the other blockchain mindset, blockchain and then, and then it switches back to Bitcoin when, when the difficult to readjust it readjust. And ultimately what it does is just gives you more profit. I think about something of 0.6% more profit. And you have, we guarantee profit with this tool. We, if we never, we, if we, if we mess up in the backend, we’ll pay it, we’ll pay the, our minors what they should have gotten. And so it’s actually a foolproof extra profit margin. Now I would recommend you click the yes on that option. Yeah.

Wow. That’s, that’s, that’s pretty amazing that you guys backed that up. What are, what are the typical problems that you face as a, as a pool dealing with you know, mining farms and whatnot? What w what is the, the most common issue that you see?

That’s a good question. Well, I mean regulation is saying regulation is quite something that is difficult to, to forecast, right? You can never know what the girl is going to say next week. Yeah. They might say look, mining is illegal today, so pack your bag. It happens. And it was Becky. Stan not too long ago, they, they made, they didn’t make it illegal, but they, they bumped the electricity costs by, I dunno, like 300% for every mining farm basically. So basically they made it illegal but will not live out. It’s quite messed up for people that have farms there. So it’s always a variable that it’s very difficult to to, to forecast or to know what’s going to happen. That’s why a lot of, a lot of mining farms are based in areas in the world where like Iceland and Norway or Sweden where the, you know, where, you know, radiation and things run kind of more, everything is run much more practical and everything runs well in these countries. Right?

Yeah. It’s not all about political control, it’s,

Yeah. And just political stability, you know, they’re EU, these things. So the, so, so a lot of, a lot of my informs choose to maybe pay a little bit more in electricity costs. But it happened in the back of our mind, you know, they can sleep at night knowing that their mining farms are gonna get shut down by a row government one day and you know, that’s it. So, so it’s something a lot of people consider. Yeah. Yeah. It has to go, I have to have it relates to your risk tolerance.

Yeah. Right. Yup. Well, Ella Andro it’s been great having you on our podcast here and we think one last thing how what’s the best way for somebody to reach out to you?

Oh, I’m just a Twitter bit a bit bit intrepreneur

Bitch entrepreneur on Twitter and I take it, you’re, you’re in Twitter every day. You’re tweeting a lot.

I see. I see it a lot. Yeah. But I I think Twitter has gone into a little bit

Crazy,

And it’s kind of, I don’t want to work through those. I can be sitting on Twitter arguing all day.

Yeah.

But please follow me and give me a shout out. It’d be wants to do anything and I’m putting in our comments, the website. And thank you guys.

Yeah. Yeah. Thank you. Take care. All right. Take care. Bye.