In mid April, we will have Jimmy Thommes of Bit Capital Group on the podcast. Jimmy is a lawyer turned crypto miner from Chicago Illinois. He operates a GPU-based compute cluster in central Washington state. Jimmy wants to build GPU farms for the purpose of performing live video transcoding, machine learning, and other computational heavy tasks with cryptocurrency mining as the backup plan. He is currently exploring the re-purposing of his farm for COVID-19 research (for example: [email protected]). On this episode, we will also discuss the Ethereum ProgPoW debate a little too.
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All right. We’re live. Welcome to the crypto mining tools podcast. Everybody. today we’re here with our cohost Ethan Zerka. Hey, everybody. And our guest today, Jimmy Thomas. Thomas Thomas. Yep. All right. Welcome. So Jimmy, yeah, we’re going to talk a little bit today about GPU and what you could do with those other than cryptocurrency mining, right. And today Jimmy, where, where are you coming from today?
So I’m from Chicago in the Chicago suburbs right now. But my business is based in Iona GPU, strict GPU mining operation. I’ll call us by medium size of hosting about 30,000 GPS and we’re in central Washington. And you know, because of coven 19, I kinda got stranded here for the month. So I’ve just been kind of riding it out back in my own town.
Wow. So you said w Washington, you have a, a facility?
Yes. central Washington around the Wenatchee, which is like right smack dab in the middle of the state run on the Columbia river. And there’s a lot of, yes, there’s a lot of mining farms in Douglas County grant and Chalan and I’ve been in there for almost three years now. So, so I, I’m imagining you have really good power rates. We do part of last Christmas I think Douglas was the last County to raise their rates, so we’re, but they’re doing it over a slow period of time where the grant and shall land just kind of said, Hey, on this date your power rates are going to be six, 7 cents. Douglas is allowing a ramp up over a four or five year period, which gives us a lot of time to react. And part of what we’re doing and trying to do as a company is I think one of the biggest risks you can take as a any crypto mining operation is having that third party risk of who is your power provider?
Well in this case it’s the public utility. And I think while they promised, you know, to everybody that they would not raise the rates, you start to see crypto mining miners start to suck up larger, larger of their allocation. So then they kind of flip the script on you. So I think now the business or my business we’re trying to find another location and which Philly, Oh, I think I’ll ask you guys for a second there. We’re trying to, we’re trying to find another location where we’re actually providing the power. So that’s where I, what I’ve been doing over the last couple of months is finding another location in which we can generate power. And I think that kind of eliminates some of that risk that is inherent in having a single power provider that we’re experiencing in Washington right now. So we have some time to react to that. But that’s what I’ve been working on over the past couple of months. Wow. So can give our, our
Viewers an idea, like where do you even start to look for power? Is, do you go, well, I mean, we, we’ve seen, you know, lots of different people explain lots of different things. First of all, can you tell us you know, what kind of power are you looking for? Are you looking to like maybe harvest you know, gas, you know, flare gas, things like that? Or are you looking for hydro or, you know
So we currently have hydro, that’s what’s a big outwin ACCI. We’ve explored or we’re exploring the idea of wind and solar or combination of the two. And we’re, we had explored in the past, and it hasn’t been part of the conversation recently, which is and I remember the name for exactly, but essentially burning trash and then you can repurpose that power. And that’s a, a, there was a company that we had talked to that does that in LA. The only issue with a lot of these power sources, which is why hydro is King and the renewable energy field, is that it’s not necessarily stable or reliable in terms of how much power the power is delivered, which mining needs that stability. Bio-Waste is that what your yes. Bio is, yeah,
Viral waste. Yeah. Yeah. Bio-Waste energy recovery. I love it. Yeah.
So, yeah. Well, so when you start looking for a second location, we wanted to just diversify our risk from third party providers and the conversation has evolved into well how can we eliminate that risk entirely and produce the power ourselves. So I mean, maybe we won’t land on that as, as, as the end up solution, but that’s kind of where the conversation is currently and that’s going to give us the best longterm solution for you know, the the business of this sort.
So you said hosting are you hosting or are you like self mining?
It’s combination of both. We have, I want to say between 50 and 60 clients. We have, I would say about a third of the space is the company owned equipment and the equipment that we have is you know, 5 cent AMD, five seventies, Nvidia, 10 seventies, 10, eighties, 10 80, TIS kind of all over the map. We originally had started, you know, during the big boom in 2017 where we were selling rigs. And we were able to have all the rigs kind of be made of the same components when the market kind of took a left turn and has kinda been in this Valley over the past couple of years. We ended up hosting other people’s equipment. So now we’ve got a whole range of all kinds of stuff which is kind of a headache for me. The operator
And imagine like from a GPU management perspective, from what I’ve heard, you know, I, I’m not into GPU as much. I’ve sold some, but I have never run them myself. So yeah. You know, what, why don’t you tell us a little bit about that because that I’m sure as a hosting company, you probably have to maybe charge a little bit extra for managing that as [inaudible]
Managing six. Yeah. So I, I’ve never hosted a six. And from what I’ve, Oh, sorry. From what I’ve gathered they’re a little bit easier to run. And then also a part of our contracts was a nice hashS kind of a profit switching where let’s say a Z coin or Raven coin became the most profitable coin. We wanted to capture those gains,uwith our clients. Ubut we actually, we’re moving from pool to pool, so it wasn’t necessarily nice Ash that was part of the rotation, but we would allow other pools to be a part of that conversation. And this is crypto mining tools podcast and the,uthe software that we use is actually awesome. Miner. Uif you guys are familiar with that. UI’ve been,uI’ve been doing the mining since 2013. Uand I’ve done a lot of different of Linux distributions, but when I wanted to break it out large scale, that I think the only option that allowed for that kind of profit switching on the fly was a windows based system that could have changed.
Now, I actually haven’t done the research over the last couple of years because it would be such a pain in the neck to repurpose all the software. But that’s, that’s what we’ve been using the past. You know, since we started in opened our doors in December of 2017. So that’s, we’ve been using for the past couple years. Yeah. Awesome. Awesome. Okay. So, so did you ever try anything else other than awesome on it or do you just kind of land on it and decided to, Hey, this is exactly what we need for this company, which the company I run now is called bit capital group or a big cap. We’ve always been awesome minor. I’ve been mining since 2013 and I started off, Oh, I’m sorry, start it off without a management software. Just runningF minor as a bat file back, you know, when, if your amp started.
And then I moved to ethos which back then it was ethos and I think he’s rebranded. And actually that’s run by Alex Alex Levin and I’ve actually met with him cause he was in the area. So I, I had everything on Linux back then. And I, I agree Lennox is a better system. I think in general it’s a large run, a large scale operation, but the features that which I was trying to position the company to try to attract clientele, the Lennox just wasn’t built out for that as a plug and play kind of system, which also might operator at the time. And that’s, that’s why we went that direction. So I’ve played with a lot of them ethos pimp a hive briefly. That’s more recent. But I’ve already, I also, MITRE also has a, an upfront fee, not one of these monthly fees that [inaudible] offers.
So I’m kind of financially entrenched in our position there anyway. So I’ve been sticking with that and it’s, it’s been great so far. I’ve, I’ve learned a lot of command line in terminal interacting with windows. So it’s been, it’s been a journey. So, so you said the, the reason why you chose awesome minor one of them was because it was windows based? No, the reason well I think it’s combination of two. I mean, so I think it was difficult for, I know that at least on ethos, they tried to develop a, a system where they could do profit switching because ethos has started off with just a theory, IOM, a mining and then added multiple other miners over the course of time. But when they tried to add, at least this is my experience talking with some of the dubs that over the, over the 2014, 15 and 16 whenever they switched minors, Linux would break or something would break with the voltages and something like that.
So like that’s kind of where when I was starting to make decisions about which OSI I wanted to use and windows would, would work. Windows could handle that a little bit more easily. And also minor. Actually you can have it on both. But I have most of my equipment is on windows. Okay. So keep has a question here. He would like to know what kind of, what are the coins that you’re mining? So over the past half year, six months or so the, it’s been pretty much strictly Etherium or if you’re in classic there’s, there’s basically a port in which that port will decide which of that Bush coins in that algorithm are the best to mine. And then my clients can choose to either get paid in theory M or Bitcoin or, you know, some of the big ones.
We don’t really support some of the smaller ones cause that would be a headache if one client wants, you know, doge coin, that’s kind of a headache. But before that it really range and I try not to, I try to avoid like the noise, let’s say like one coin is more profitable for 10 minutes. It’s really not worth switching the software to that coin for 10 minutes cause you have all kinds of liquidity issues and things like that. It’s really only a rolling average over, we do a 24 hour period where if a coin starts to eke ahead of, of a theory then over that average time period, then we’ll switch to it and it will stay on it for, you know, a couple hours before we’ll consider moving back. And isolate. I automate a lot of that so I don’t actually know exactly what it’s mining, but it’s been in the past, Raven coin had had a big you know, a couple months where it was mining it on it, on the end.
And we also have to benchmark each card. So a Nvidia Raven coin is going to be, was big. I think it’s going to be big again because they’re actually moving forward with Prague pow, which a theory I’m, we’re just recently rejected. And the zero coin I think is one. Two, that’s an Equihash variant, one 92, comma seven which does not have an AC for it yet. That’s been on the, the rotation. And then I believe grin on the 10 80. TIS since grin has a dual algorithm with a cooker room 29 and cook a two 31. If you have an over 11 over, I think at 10 or 11 gigabyte card, which the 10 [inaudible] are you’re kind of in that select class where you can get a little bit more profits out of that GPU mining grin. So those are the ones that come to mind being in the rotation over the past a year or so.
[Inaudible] Now you, you mentioned what is it, Prague Powell. [inaudible] Can you explain to our viewers what, what does that stand for? What does that mean and, and how does that fit into the, the whole scale of everything?
Sure. So Prague pal stands for programmatic proof of work and it was a proposed upgrade. It’s, it’s actually a tweak to, to F hash, which is a theory and algorithm. And what it does is it basically bricks the, the ant miner [inaudible] and any other [inaudible] that is out there. And it gained a lot of, against some traction within, sorry, I’ve lost you guys for a second. It gain traction within the developer of curls and was accepted multiple times on the, on the Etherium developers calls and you guys can go on their YouTube channel and you can track all of these conversations and how this got to be where it was. And then once it was accepted, there was suddenly a big pushback from the community to not allow it. There’s all kinds of speculation. Are these people who invested in, in the [inaudible]. There’s a whole discussion that was had on a website called [inaudible] where you can look up and everyone put in the pros and cons. And it was a big community debate about what to do. And then just I want to say within last month a theory and ended up rejecting it as an upgrade. And the theory may basics are allowed to continue on that, on that outfit.
So it was kind of a war between [inaudible] and GPU. [inaudible] You know, who would have the rights to mine coins with or without it?
Correct. So, I mean, GPS are still in the game obviously with a theorem. And because the, if you’re, I think of all of the coins thus far maybe with the exception of the latest Monero fork my gosh, I can’t remember the name of it. They just fork to a new algorithm that is a CPU based algorithm. With the exception of Minero’s new algorithm, a few room has done the best in resisting a six. The ASX only gain I wanna say 20 to 30 to maybe 40% efficiency or a hash per, per wattage used ratio. And the white paper and the yellow paper on a theory and basically had this baked in that they wanted, they didn’t want a six on the network. So this was supposed to be an evolution of, of that thought process. But I mean, there are, I mean, you guys are probably more Probasics than I am. So there’s, there’s definitely reasons to have ACX on your network. It creates a community of miners that are tied to the fate of your coin. And the, you know, there’s, with the GPU, if, if something else comes along that’s more profitable, that a Ferrum than, you know, theory. I’m just,
It’s a switch and, and goes to that. Yeah.
So there’s, I think there’s a real settled
Debate on as to which one is technically better. But that, that’s where Prague, Paul landed with a theorem, and then so Raven coin should be forking off. It’s a six, and then they’re implementing a version of Prague pow over the next, in the next couple of months, I believe. Jimmy, why don’t you just tell us a little bit about how you personally feel about Prague pal? Are you, you know, pro con? Well, yeah, I’m, I’m pro pro pow, but obviously I’m biased having a mining operation that is strictly to be used. But just from a a technical perspective, I think that the mining is the backbone of, of cryptocurrencies. And I think that having the widest base of miners giving the what and it gives the widest distribution of that coin and inquiry creates the most enthusiasts of those coins when you do it on general purpose hardware.
Many, many people have processing power in the form of general computing process or general computer hardware, whether it be a GPU or a CPU. And I think that that creates a kind of money for the people kind of ethos within a crypto currency, whereas [inaudible] are going to be dominated by those that may be investment on multiple thousand machines to do just that. And it’s strictly a decision. So that, that’s kinda how I feel about the whole debate in general. So help us understand the argument, you know, on either side. Why would somebody like, like maybe a Alexander 11, you know, why, why would he be so against Prague pow well I did you bring him up specifically because he actually pretty hard stance against someone like him for example. I don’t know his exact reason, but like someone like him, why, why would they be against?
Well, I mean I can speculate as to what his positions may be. I know that he has essentially stopped development of ethos or, or push it on or put it onto somebody else. Another developer and he’s developing a software called [inaudible], which is an AC piece of software that’s supposed to help boost boost profitability with that. So I can only imagine having another algorithm that has a six on it is probably good for his business. Much like how having GPS more, more GPU dominant algorithm is probably better for my business. So there’s definitely some biases at play. Beyond that I think that, like I said, there are pros to be had for a six on your network. It creates that longevity that more of that security longterm. But I mean, I can only speculate as to why he feels that way about it.
I guess the thing that I can appreciate about Prague Powell is it can keep hardware relevant longer with a six. I’ve seen as soon as the next generation comes out, you know, maybe the older generations have six months to live and when there’s, there’s no end game for them after, you know, they’ve been retired. I mean, basically they just become waste metal and waste electronics. They can’t really be recycled or rehashed into another purpose or anything like that. But with Prague Powell and utilizing, you know, GPU [inaudible], there’s lots of options after they no longer become viable for mining. You can, you can still play video games with them. You know, you can you can still do graphic editing with them and, and video rendering and things like that. And so I guess for me personally, the reason why I would like to see GPU stay relevant is exactly for that reason because they’re far less wasteful than a six hour.
And I’m just talking a little break and talk about our sponsor. Speaking of a six, I’m going to give a big shout out to our, our sponsor BraiinsOS for this episode. BraiinsOS in case you guys don’t know, I’m just like, are our cell phones here can be unlocked and give us a lot more functionality and things we can do. So can your miners, your minors can also be unlocked and BraiinsOS has two versions of their OS they have their free open source version, which will allow you to unlock your minor and increase the hash rate, get better efficiency. And then they have the enterprise edition, which has even more fine grain control over everything that your minor can do. Do yourself a favor, if you’re mining in the AC industry, look into getting BraiinsOS onto your system. It can improve your hash rate by up to 30%. And it can also reduce your, your electrical, you know, your electrical draw, your, your use of electricity. And Scott’s going to tell you guys how to to get BraiinsOS and also wanted to let you guys know that if you have the enterprise edition, you can get 50% OFF of Slush Pool’s fees, which is awesome too because BraiinsOS and Slush are, are kind of one in the same entity.
Yeah. Yeah. So give that a shot. You can actually visit their website at Braiins-OS that’s brains with two eyes, Braiins-OS.com, and definitely give that a try. Like Ethan was saying, you can either increase your hash rate or increase your mining efficiency or both. So I’ll give that a shot. Now I know there are some people that don’t like it, maybe solely for the reason because it is hard to insist on an install but maybe that’s something that they’re going to address in the very near future. But yeah, it definitely give a BraiinsOS a try for your your old S9’s and then what’s coming up in the very near future, hopefully in quarter two here is support for the [inaudible] 17. And they [inaudible] yeah, I’ve heard good things about them and following their project for, for a little bit. And a lot of the people that I respect on Twitter have given them
A big thumbs up in the crypto sphere. So, yeah.
So we, Jimmy, we wanted to talk to you a little bit about the project that you were thinking about working on. I don’t know the status of it yet, but you’re telling us offline about folding at home.
Yeah. So part of what Ethan was mentioning earlier when it comes to the, the ACX versus the GPU is is that the GPS can be repurposable for more than just mining. And it seems to be pretty relevant to now be able to connect or you have been able to in the past. But it’s gained a lot of popularity because of the, the pandemic is that you can actually connect your GPS and anyone can do this at home. Connect your GPS. And I was hoping to donate a part of my farm towards fighting coven 19. Basically what folder your home is, is it simulates proteins on the virus and tries to find a site for a molecule to be developed to inject into the virus. So it can’t bind to the cells that it attacks in your lungs or, or in your body.
And you can actually go on their Twitter folding at home and you can see some of the work that the GPS or farms and anyone with the GPU and the simulations that have been rendered that are helping scientists find a vaccine to, to, to to, to stop this pandemic. So, and it’s not just coven 19, that’s just the one that’s gotten so much attention lately. I should pull your home has gotten more processing power than the world’s leading super computer just on that project. So that’s why we wanted to do our part. I know there’s been some other, there’s like a bit speed trippin has also devoted some of his harm towards doing, doing that. And you know, we, we, we hopefully are, we have the ability to add to that project. So I’ve been exploring that option. We’ve already got a couple of rigs on it, but not really necessarily a meaningful amount and then I’m hoping to expand that over time to see what we can do.
So. So how, how does that work then from a compensation standpoint? Like if you’re used to making money from mining, you know, and then the certain to divert that hash power or the processing power over to something different, what does that,
Well, that’s part of kind of what I’m looking to do is finding a, a partner, whether it’s locally in central Washington or some to do some kind of a, you know, partnership to see if we’re, if we can, cause we don’t get paid. There’s no, there’s no business model really for this yet at all. This is a donation, this is a donation. You know, at a certain point, I think just where we are with this pandemic, you know, people’s lives are worth looking into what you can do with whatever industry you’re in. So yeah, there’s definitely no compensation involved in this whatsoever. It’s not like I fold a protein and I get a patent or something like that and like this is all open source for the public and we will be burning electricity for, for humanity. I guess if you want to put it that way,
Would you, would you be able to do it as a write off as a, as a donation later in the tax year? Could you, you know, maybe pay less in taxes and claim this as a, you know, a donation? And
That’s a good question. We would have to that’s a good question. You know, I, I’m, I’ll, I’ll definitely put that in my notes and see if that’s something that we can, we can chase, thanks for that suggestion.
Sure. Yeah. And then why don’t you just tell us a little bit about having a GPU facility that’s maybe not necessarily the sole purpose is for a mining cryptocurrency. I think you were telling us earlier that you know, your, your desire really a and other than the folding at home you maybe want it to use your GPU for other things like like that video rendering like Ethan was running. What, how does that business model work? You know, who uses those kinds of, of services and, and what, what are your, what are your plans for that?
Yeah, so basically what I wanted to create was like a hierarchy essentially a lot like how we have now with the prophet switching, what coin is most profitable. Let’s switch to that. And we wanted to add other use cases like you can do like Twitch. Dot TV is a famous or of the biggest streaming platform, live stream platform out there right now. And they, that uses a lot of processing power to do that live video transcoding. So you’ve had a come up [inaudible] be that centralized where they basically leverage mining or GPU is like, like fog computing, which I think blockchain is allowing for because it lowers the barrier for you to have for you to participate in business needs that someone else might have, even if it’s just one GPU or a whole farm. So we can do live video transcoding, we can do some of this folding at home.
The issue is balancing that work or, or machine learning, artificial intelligence and video. We’ve been pushing that. And we, we basically, there’s always going to be that work for mine and mine is just, that’s always gonna be there. And the challenge is seeing, Oh, we have this work come in cause someone wants to live stream, how much of the farm do we need to help that person? And we want to make sure that everything, everything’s being used 100% of the time. So we’re developing these kinds of tiers of profitability. Machine learning, you earn more per, per hour, but the work’s not as steady. So you have to build a system in which you’re able to take in that not as steady work, but also have that, that bottom bottom layer of mining act as the foundation of, of the revenue for the business.
So are, are there really platforms out there that, that can help you to automate switching between, you know, I know that it exists for pools, you know, and cryptocurrency mining, but is there something that will help you to automate that already for
This? That’s kind of what we’re, you know, that’s kind of what we’re hoping to develop over the next couple of years. We’re trying to open the second location scale up and then start developing software that would allow anyone with a GPU or a small farm because I should be able to tackle all these different problems in, in a way that makes business sense. And and that’s, that’s, that’s really been the challenge over the last a year or so. And I think the V, my vision of the, the, the internet is to have these kinds of mom and pop data centers kind of replace some of these behemoth. And I live in central Washington where you have Yahoo servers and Google servers and they just, they’re massive. And I think it makes more sense just from an internet stability perspective. I lost you guys are just for me to interact. Yeah, just, sorry. Just for a decentralized perspective which, which makes the internet more robust that you have smaller clusters of processing power all over the world versus some big plants that may exist in [inaudible].
Well, I mean not only that, but you know, there’s a security element to that too. You know, if you go into the big data center and you compromise that data center, everything, you know, but if you compromise just a, a cluster, you know, it’s pretty easy to con, you know, contain it in that cluster.
Sure. I think, I think it would help with privacy online. I think blockchain is going to help a lot with privacy in the distant future. And I think having independent clusters, processing, you know, agnostic data where, you know, not necessarily tied to a specific person through some of these blockchain projects that allow people to get paid in real time for their work. Mining being the best example. I think that’s just, that’s, that’s where we’re headed and that’s, that’s kind of the vision that I, I see the internet having a future because I think it’s also going to have a lot more compute heavy work involved as we continue to find more uses for it.
Yeah. Now, Jimmy, you mentioned privacy and I wanted to touch a little bit more on that. Because I, I feel that, that we’re all aware of privacy and the value of privacy and why we need it, but I feel especially with the younger generations of people that I’ve talked to, they just could care less, absolutely care less. What do you think we can do to make them more aware of the values of privacy and, and, you know, help them learn that it’s, it’s important?
Oh, man. Great question. I mean privacy is, I think one of the cornerstones of of, I mean I think everyone has a right to privacy. It just, the ability to track down your interests where you are location-wise. I don’t know if you guys have seen the maps of the kids that were in Florida for spring break and then they track all their cell going back home about potential coverage, 19 scares. That is pretty scary to, to follow. I mean I haven’t thought about, I mean for me privacy is kinda been a foregone conclusion that it’s something that we need to I think re-instate into the internet. But in terms of a good way to describe it to young people who have no, have never had a concept of privacy. It’s a really tall question. So I might have to put a rain check on that one. Okay.
And yeah, so just as we’re wrapping up here is there anything else that you have for our mining audience? Any advice or any? Hmm. Well, I want to say thank you guys for having me on. I’ve been you know, I had been following your telegram channel and I saw you posted on Twitter that you were thinking about doing this. And I’m like, right then I was like, Oh, I would love to be on that, that podcast. So I just thank you guys for having me for sure. In terms of advice I think [inaudible] said it a while ago that the safest thing and the first thing that you should do if you want to get into crypto is to just buy some Bitcoin and seriously forget about it. And then if you, if you want to get involved, if you have some skills that you could that could be put to use in the industry, then then go from there.
But I think everyone should own a little bit of Bitcoin, especially now with the printer money, with the printer, the money, printers, you know, going for the, the way to go. And this is coming from a GPU miner. I think Bitcoin is going to be the best best blockchain from a monetary policy perspective for sure. All right, well, Jimmy, thanks for coming online. And how, how can a, our followers contact you? Sure. You online. Yeah, my website is bitcept.co. And then on Twitter. I’m @Cointersect. That was my old company. I just kinda kept that handle. And now I’m also that that’s @Cointersect and then I’m also on telegram, but that moniker as well. So that’s the best way to reach me. Okay. That’s awesome. Great. Jimmy, thanks for coming. I really enjoyed talking with you. Thanks a lot. Have a good one, guys. Bye.