Elon Musk may have the world’s most popular cryptocurrencies wrapped around his finger, but one of his many market-moving tweets this year highlighted a growing concern about the virtual currency.
In March, the Tesla chief said the electric car maker would accept payments in Bitcoin from US customers, one month after announcing it had bought US$1.5 billion ($2 billion) of the currency.
Just weeks later, Musk abruptly walked back the decision, citing emissions from energy used by miners trying to grow their own pot of the world’s biggest cryptocurrency.
In a May 13 tweet, Musk wrote: “We are concerned about [the] rapidly increasing use of fossil fuels for Bitcoin mining, especially coal, which has the worst emissions of any fuel. Cryptocurrency is a good idea on many levels… but this cannot come at great cost to the environment.”
Co-founders Herbert Sim (left) and Jimmy Li say Sharemine AI only offers eco-friendly mining, as the platform only mines with green energy generated from hydro, solar power and recycled waste energy
Must sustainability play second fiddle to a future of decentralised finance? One local cryptocurrency mining company thinks the two can coexist with the help of its solution.
Founded and headquartered in Singapore, Sharemine AI claims to offer “green cryptocurrency mining services” — an eyebrow-raising proposition, given the commonly-held view of how crypto mining is a growing strain on energy consumption.
“Sharemine AI only focuses on eco-friendly mining, as the platform only mines with green energy generated from hydro, solar power and recycled waste energy,” founder and CEO Jimmy Li tells The Edge Singapore. “We source for the green energy in Malaysia to ensure all power generated is clean and renewable. We have signed an energy and electricity purchase agreement with Sarawak Energy to ensure this.”
Through Sharemine AI, users can mine cryptocurrencies like Filecoin, Phala and Swarm, as well as the more “popular and volatile” Bitcoin and Ethereum.
Li adds: “As we know, countries are concerned about global warming and carbon emissions, so the mining industry has become a huge topic. We provide mining services to anchor investors and miners, [and we also] provide cloud mining solutions for smaller-scale miners.”
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Li, who is also an adjunct professor for blockchain education at Shanghai University, highlights Sharemine AI’s Chia mining service. This is done through its Chia Cloud network, an open source blockchain network founded by Bram Cohen, who is also the founder of file sharing software BitTorrent.
Chia Cloud uses a blockchain consensus algorithm called “proof of space and time” (PoST), with the sole focus of mining Chia tokens. This protocol stands in contrast to Bitcoin’s “proof of work” mechanism, which consumes more energy, says Sharemine AI co-founder Herbert Sim.
“Bitcoin mining is intensive work using intensive energy, while cryptocurrency projects using PoST protocol use storage space only. The storage drives’ energy consumption rate is extremely minimal,” he adds.
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‘Energy saving’ tokens
Singapore users can mine the “energy saving” Filecoin and Chia tokens, says Li, while those in Laos, Malaysia, Brunei and Indonesia can use Sharemine AI to mine Bitcoin and Ethereum, which consume more energy.
“Filecoin and Chia mining have very low power consumption; the energy used is equal to the power consumption of a normal server. Hence, we are able to refer to this as ‘green mining’.”
With fees from US$10 a month, users can expect 20% returns per month, claim the founders. Daily profits will be deposited to their wallets each day.
Sharemine AI has US$10 million worth of mining assets here, located in its data centre in Pioneer, adds Li. “Our headquarters is in Singapore, where we oversee management, marketing, operation, sales, accounting and legal.”
“In other countries, such as Laos, Malaysia, Indonesia and Brunei, we have operations and engineers of around four to five persons per country, mainly for day-to-day operations like monitoring the hardware. The mining business is not a labour-intensive business, as the mining machines work for you,” says Li, adding that the company is preparing for an IPO next year.
The funds raised from the IPO will come in handy given the company’s expansion plans. Sharemine AI aims to build 1,000MW of green mining farms across Southeast Asia — namely Malaysia, Laos, Cambodia, Myanmar and Indonesia — over the next five years.
“We are gradually securing the mining farm, which can put in around 300,000 Bitcoin mining machines, which are worth around US$2 billion in assets,” Li claims.
This will let the company scale as cryptocurrency goes increasingly mainstream, adds Sim. “There are massive amounts of discussions, debates and developments [happening] across the world at an astonishing pace. The industry changes rapidly, dramatically, sometimes even daily. It doesn’t matter how many years of experience you have in the industry; there are always new platforms, payment solutions, revenue models, players, licenses, best practices, breakthroughs, blockchain protocols and more. It is very easy to be left behind.”
Buying Bitcoin at US$20 apiece
As the self-professed “Bitcoin Man”, Herbert Sim hopped aboard the cryptocurrency hype train a whole decade before this year’s market euphoria. “I bought my first Bitcoin directly from miners in 2010. Unfortunately, I also sold too early. I bought it for around US$20 and it sold for around US$100.”
“Back then, it was extremely thrilling to make five times in returns, which practically covered my education, travel and accommodation costs,” says Sim, 34.
At that time, he was working towards his bachelor’s degree in liberal studies, journalism, advertising and public relations at Oklahoma City University.
With Bitcoin reaching its all-time high of US$69,045 ($94,217) apiece on Nov 10, does he regret his decision? “When I sold Bitcoins at US$100, I thought that I was smart. Imagine if I had not sold and just held on to it till today? The lesson learnt is to ‘HODL’ (hold on for dear life), meaning to hold onto Bitcoin and never sell it,” says Sim.
It comes as no surprise that Sim’s favourite investment to date is in the world’s largest cryptocurrency. “[Bitcoin is] something I have been extremely passionate about, and not just for the investment returns… It is an extremely thrilling and exciting time to be living in; crypto brings about a new era of wealth creation, something which in our parents’ day was real estate, or in our grandparents’ time, the gold rush or the stock market.”
Given their involvement in the world of decentralised finance, both Li and Sim have larger risk appetites than the average investor. “Investing is a very long journey... I also lost millions of dollars in my investments,” claims Li, 37.
“Invest cautiously as every investment comes with risk, and always remember to safeguard your wallet. If you want to buy crypto, I suggest investors put 50% in Bitcoin-related mining and funds. The other 50% can be put into coins like Ethereum and other top 50 coins, which are building blockchain fundamentals and ecosystem,” adds Li, who also holds a master’s degree in supply and logistics management from the University of Newcastle-upon-Tyne.
Sim says he is a “moderate to long-term investor” who is used to taking a hit. “To be absolutely upfront, almost the majority of it does not pan out well. However, all it takes is one successful investment, what they call a ‘unicorn’, to recover and make 10 times or even 100 times in returns.”
“Don’t put all your eggs in one basket; it is better and smarter to diversify,” he adds. “Think back to the creation of the Internet or social media. Had you invested even a tiny bit at the start, the returns today would be astronomical. Similarly, Bitcoin and the crypto industry are new technology, one that’s already adopted globally. It would be wise to at least allocate 5%–10% of your portfolio to it.”
Photos: Albert Chua/The Edge Singapore