Will Szamosszegi on Bitcoin mining and renewable energy at Sazmining

0:01I'm Ashton Addison from Block West capital for investment pitch media and today on blockchain interviews we have will samasegi the CEO of SAS mining well welcome to the show and thank you for taking the time thank you for having me you're very welcome I'm excited to dive into Bitcoin mining it's not often I and get too deep into Bitcoin mining because it can become a whole another

0:24world of its own on top of trying to learn about all the cryptocurrencies and all the touring complete networks and once you start including hardware and Mining and electricity costs and all that jazz it becomes a whole other world of knowledge to learn but there are many in the world who are doing it and making a great profit and there's still lots of people interested in

0:47Bitcoin mining for that reason as well so I'm excited to dive into your knowledge into the industry and what SAS mining is doing let's kick off the conversation by just a little bit about you know how you first got interested into Bitcoin mining and sort of what setting up SAS mining look like yeah well when I first started learning about blockchain and cryptocurrency I

1:08was just instantly drawn to it I knew that if I didn't start working in it I'd look back at the end of my life and I would regret it and I saw mining as the best way to get into that and so I started SAS mining in January of 2018 since then I built an incredible Network within the space with a lot of the different miners we had done some Consulting had our own small Mining

1:28facility and then I realized that we have or you're looking at this massive need in the marketplace and that massive need is that let's say you wanted to start buying Bitcoin today how would you do it well there's no easy answer to that question and through a Consulting we had people hitting us up wanting to begin mining Bitcoin but you can't start mining with you know fifty thousand

1:51dollars against a lot of these big minors and we realized we had the network and the capability and space to be able to build a platform that allows you to begin mining Bitcoin and instead of you needing to spend six months to a year building a facility building all the relationships and then spending millions and millions of dollars we decide to make it easy where you

2:12could sign up in one minute and you don't need millions of dollars you could just buy a single binding rig and we've got our Flagship facility for the platform coming up later this year in December out in Wisconsin 100 Hydro power and yeah we couldn't be more excited we think that right now it's a great time to get into mining the prices on these mining rigs have come

2:32come down significantly so we couldn't be more happy with the timing that just we got lucky with that but we think our customers are going to do extremely well as their miners go up and running in that facility wow great to hear will and yeah when I've looked into Bitcoin mining in the past I've seen the options of you know buying your own Rigs and putting it

2:53in your garage or you know trying to find some way to compete against these giant warehouses of Bitcoin Miners and it seems like the Upfront cost that you have to pay to start up your own rig and the knowledge in that as well is a little bit overwhelming for most people and I've had a lot of people that are just getting into cryptocurrency approach me saying I want

3:15to start Bitcoin mining and because I'm unfamiliar with the intricacies of mining I've had a hard time recommending it on what's the right way to approach it you know I often recommend just getting Bitcoin and holding it because then you're not paying for those upfront costs of the graphics cards and the electricity costs and trying to calculate to make sure that you're

3:37not in a loss so I'm guessing SAS mining makes it a lot easier to start than just building a rig in your garage yeah and this is one of the big things first off I will never ever tell someone that they shouldn't buy Bitcoin I think Bitcoin is a great thing to buy if you're going to buy anything Bitcoin mining is a different type of investment

3:59with Bitcoin you're owning the digital asset that's great with Bitcoin mining you're owning a hard asset which is the Bitcoin miner and that hard asset is generating new Bitcoin over time so it's a different type of return profile than just owning a digital asset buying and holding which is a great strategy it'll this allows you to own a hard asset and then generate new Bitcoin it's

4:22An analogy that I give to a lot of people who are aren't deep in the crypto like let's say I'm talking to a real estate investor you can draw the analogy to real estate in many ways because real estate hard asset you can generate rent or passive income with it a Bitcoin miners like a money printer except you're printing Bitcoin instead of dirty Fiat

4:44but all joking aside I think that there was a big problem before we go went and launched this platform and that big problem was that it's very difficult right and you need economies of scale to do well and so the way that we do it for our customers is let's say you go on to sasmine.com and you buy a mining rig your mining rate is being priced in at a

5:06bulk order with everyone else on the platform who decided to go and buy a mining grid so we pass along the mining rate to you at Cost we don't up charge it and then same thing with the hosting and the service and maintenance we're not up charging any of that either so you're getting everything at Cost we align incentives no one has done this in the market but our big focus is being

5:27your partner so the way that we make money it's very simple we just take a percentage of all the Bitcoin mind and we don't ever touch your Bitcoin you can put in your wallet address your own Bitcoin wallet and the mine in full sends your Bitcoin directly there and sends our cut directly to our wallet and we're keeping 15 have a Bitcoin mind and so we think that by aligning incentives

5:50we have the incentive to keep your mining rig up and running versus just up charging your mining rig or your electricity and we think that's a better model that the market needs at this moment that's interesting so I've seen many sort of cloud mining as they call them Services where you can put in a small amount and you're sort of tapping into a large company's Bitcoin

6:15miners but from what I understand it with SAS mining you're actually using the economies of scale that SAS money has to be able to purchase your Rigs and host them at the salesman facility but the can you explain more on the differences between yeah this is an important yeah I'm very glad you asked this question because there's an important distinction here

6:40We do not do Cloud mining Cloud mining is as you mentioned a company as a facility and they're selling hash rate but the customer doesn't own the mining rate and what we're doing is we're giving you as a customer the ability to purchase your own mining rig you own it and the asset that you own that's generating passive income is being run at a facility so

7:04It's a new type of model it's a much more sovereignty driven model it gives you ownership of the hard asset and access to those cash flows and we're not selling hash rate we're selling an actual mining machine and passing along all the services and the hardware costs at the cost that we can get like the best deal that we can get on it okay that's great to know and

7:28I feel like one of the best advantages of that model is you know being able to own your own rig by harnessing the electricity costs that SAS mining is able to get which normally if you have a large facility you're able to get a deal on you know the cost of the electricity versus using your home electricity at home and the cops ordering if you're

7:50running a girl up at your house or why your electricity bill is so hot when your mind is Bitcoin at your house yeah it's really crazy how much electricity prices can vary based on scale and also where you are so let's say for example and you would not want to do this let's say you had a mining rate and you wanted to just run it on residential power rates in

8:12California you're paying over 50 cents per kilowatt hour if you're a customer at SAS mining you're getting seven Cent power pass along to you at cost without necessarily being up charge like crazy so it gives you the ability to get cheap power and have someone else run it rather than you having to run it yourself and still end up paying a lot more and energy costs running around

8:36machines yeah that's a significant difference probably the difference between mining out a loss and Mining out of gain so you know with that kind of economies of scale obviously there's a big difference there now with purchasing the miners or the you know I know that they're always coming out with new Asics and new graphics cards to put into the

9:01Bitcoin Miners and often they're more powerful and stronger you need to keep up with the latest technology to sort of stay on top of the competitors who are also getting the newest Rigs and I don't know the exact depreciation rate but I hear anywhere from you know a year to two years the miners sort of slow down and the new miners start taking over what's the case with having the new

9:27Miners And if somebody purchases a minor in SAS mining how long does that last before the hash rate starts going down a little bit because it's you know it's getting old yeah now that this is also a very important consideration when you're buying mining Rigs and that your mining rig over time is going to become less competitive because they're going to be

9:47new mining rigs that come out so what you need to do is you need to get the good entry price on your mining rig you got to run it at a low-cost power rate and you got to take good care of the equipment and that's how you make money as a Bitcoin miner if you're going out there and you're buying cheap expensive electricity and you're overpaying for your hardware and you're not taking care

10:05of it then you're not going to make money as a minor and it's a much better idea for you to just go buy Bitcoin if you're not going to mind properly so all these are factors all these are variables and at the end of the day you want to be able to make smart decisions to be able to participate and if you're an everyday person out there and this was a big problem you're not

10:28going to have enough time or energy to spend all day learning about mining finding out the right ways to run it and make it a full-time job to begin mining you might want the return profile that a minor can get but you don't want to have to run a massive company to do it and so that's basically where we try and fit in the market we try and make it

10:47accessible in a couple of clicks you can sign up join our wait list and then hop in the facility when you want to when you when the mining rig is ready when you're off the waitlist you can put in the deposit to hold your spot in line and then once your mining work is ready we call the rest of the capital so you don't have Capital tied up for 12 months which you've seen in a

11:12lot of other areas within the mining industry we tried to lower that Gap to provide a better experience for our customers that's great to know and of course there's a lot of variables with you know how competitive Bitcoin mining is and you know day to day and what the hash rate is changing is there any way for people to calculate if they're to buy one rig you know how long does it take

11:38in mining Bitcoin to break even and then start earning a profit yeah actually on the website we have a calculator built in so if you go onto sasmine.com you scroll down you can see the calculator let's say you choose three rates for example you can see the exact amount you're paying the monthly maintenance costs and then the amount of Bitcoin being generated on average

12:01that's using real-time historical data from real-time apis from historical data and then utilizing that the forecast every monitor you can run your own model but you try and make it simple and easy for people to truly understand each variable within the mining process and that's why we built the calculator directly onto our platform oh that's great to know and

12:27you mentioned there about having a wait list and ensuring that the you know people don't have to pay all of it up front but from what I understand with this wait list that means that you and your team are not yet fully fully running or maybe there's a backlog of people that are trying to get into the system where are you guys at with that and ensuring that anybody who

12:54wants to start mining can do so yeah that's a great piece and that's one of the unique parts of our business model is we actually go and we have to put a capital to acquire and access mining rigs so they can be turned on quickly after customers purchase them so rather than taking all the money up front we're floating some of that Capital to help deliver our products for

13:16our customers and so when when you go onto the website and you go and you purchase you're just putting down the deposit and then we do the capital call for the rest of the capital for that mining rig once your mind we know that your mining rig is going to be ready shortly after amazing and is there an approximate sort of minimum investment that's needed to you know I'm

13:42guessing if you're if you're buying more rigs it's going to be faster that you're going to earn your money back but what if you just want to dip your toe into Bitcoin mining you know sort of what's the minimum cost that it's going to cost to get started at the bare minimum yeah the bare minimum is just a single mining rig and of course there's there's

14:00volatility in that exact price just depending on the price of Bitcoin but you're looking at roughly a 3 500 investment for a single mining rig at the date of this recording so once your mining rig is ready then we go and do the capital call but if you want to buy more than a single binder you can of course upsize that and because of our waitlist approach right now and going

14:24into this first facility we're capping the amount of mining rigs that you can buy at 10 mining rigs per person so if you want to buy rigs the max you can buy in this first facility is 10 ranks great to know and maybe you have insights on to Bitcoin mining and how that will change as hopefully Bitcoin goes into sort of the next Bull Run and goes back to

14:49all-time high prices normally when when the price goes down it gets less competitive to mine Bitcoin and when it goes up there's more incentive because each Bitcoin is worth a lot more so have you looked at you know previous Bitcoin mining Cycles or what kind of growth do you anticipate in the competitiveness and the profitability of mining in the next three five years

15:15yeah I think that predicting exactly is always there's always variability I have my own Outlook and it is based on the historical data typically what you see is the hash rate following the price of Bitcoin and it's because of exactly what you mentioned if the Bitcoin price is higher there's more incentive out there and larger margins for more miners to be

15:37able to access and begin mining Bitcoin profitably so with all that said what my current belief is what's going to happen is I think that you're going to see some consolidation here and that you we've already started to see it with the dropping price of the miners you've had a lot of miners who took on a lot of debt and ended up getting burned so now

15:57they need to liquidate that Hardware which makes it a perfect time for you to actually go and buy that Hardware because the price has just gone down like Eightfold from from where it might have been if you were buying at the absolute peak of these Miners And so with that said I think that the miners who vote who you see that get in during the bear Cycles are the ones that

16:18perform the best because they acquire that Hardware cheaply and then when bitcoin's price shoots up not only is there Bitcoin that they find more valuable but their Hardware that's already been running shoots up in value and so because of all those different factors I think that you're seeing a great time to enter Mining and you've seen these areas in

16:38the past for example in more March of 2020 after that initial Crunch and bitcoin's price droppings significantly that was an incredible time to get into mining similarly in the in the previous bull cycles you always want to get in right before the price shoots up which I sounds very obvious but it's the time where everyone's scared and you see a lot of capital that's more scared

17:04on the sidelines right now although everything is cheaper in price great insights will and I don't know if this is an obvious question as well but with the Bitcoin that you mine let's say SAS mining the Bitcoin that your team acquires do you try to hold on to as much Bitcoin as you can and just sell off what's needed to pay the operational costs and hope for that

17:30appreciation and try to sell you know later on at the late stages of the next Bull Run yeah there's in terms of Treasury management there are a lot of variables right so it's one how much do you need to grow and accomplish the company's objectives like how much risk are you willing to take on because at the end of the day I think holding Bitcoin is a much better

17:53strategy than just holding cash Bitcoin is going to become far more valuable than the cash but simultaneously you also have business objectives that you have to you have to reach and how much risk you're willing to take on holding Bitcoin on the balance sheet you've seen many different companies take different approaches you've seen microstrategy take a really large

18:13approach to bitcoin and you've seen others who just want to put half a percent or one percent in their treasury for us it's it's more variable but we're also still trying to allocate Capital to growth and so we're not taking the microstrategy approach where we're holding the majority of all of our cash in Bitcoin but we definitely do have exposure

18:35great to know it will and we don't have a lot of time left but I wanted to ask one last question about the electricity costs and you know renewable energies we saw with Elon Musk talking about you know creating sort of a council of sustainability and the move from ethereum's proof of work over to proof of stake because of the electricity costs you did mention that the seismic

18:57facility was going to be working on hydro what does the outlook look like for renewable Mining and all of these other alternative energy sources and you know whether it's Hydro or volcano powered in El Salvador and if the amount of electricity required to run the Bitcoin network is going to be less as we start using these alternative sources towards

19:20the future yet the energy costs for Renewables are going way down the cost curves are declining I think solar is going to be extremely competitive we at says minor Focus solely on renewable energies or carbon negative energies and I think that in the long run you're going to see the Bitcoin Network actually become carbon negative and proof of work I

19:42think is the big innovation for the energy sector you can capture waste and generate value from it you can capture methane one of the biggest problems in terms of global warming 84 times the warming effect than CO2 over a 20-year period there's no solution to that today until Bitcoin line so I think that having proof of work not only provides value and makes Bitcoin valuable for the

20:05obvious reasons from an economics perspective it makes it valuable because of how we can combat some of these large problems of the energy sector that currently are not really addressed today and then yeah it says mining we're focused on renewable energy if you got when you buy a rig from size money yes you're going to make money and yes it's something it's a way for you to get

20:27An allocation to Bitcoin in a different type of way but the big key is that you're helping support renewable energy and helping accelerate Society to renewable energy so yeah we're really excited about that and I feel like a lot of these views aren't talked about enough regarding proof of work and the energy sector and you have a lot of people who are

20:49covering it who aren't necessarily in it day to day because those people are busy running the energy companies and the and the mining Bitcoin mining companies but yeah I want I'm I'm happy that on the show we're going to bring that to light and show miners are helping support grid stability reduce and combat climate change and create a

21:11better monetary Network for everyone wow that's incredible to hear will and yeah you often hear the opposite you know like it's it's using a lot of electricity but I have seen I just saw a video where they were using like used cooking oil to power their Bitcoin mining Rigs and you know stuff that was going to go in the waste during the sewage all of a sudden they're able to

21:34convert that to energy to convert that into value through mining Bitcoin and keeping the network alive so super fascinating I'm really looking forward to seeing how SAS mining grows for the viewers that want to learn more about Bitcoin mining check out the calculator look at the costs and the potential profits and look at the wait list for SAS mining to get involved

21:57what is the best way for them to learn more yeah well the way that they can go and become a customer is just go on to sasmining.com join the wait list a hundred dollars per mining rig if you want to follow what we're up we also I should mention we also have a mining rig giveaway so if you follow all of our social media channels that gives you entries into the raffle to win your own

22:18Free Bitcoin mining rig we're on Twitter LinkedIn and obviously the website so go check it out and yeah we hope to be a good partner for you on your mining Journey amazing thank you so much will for all the insights I will leave the sasmining.com link and the socials in the description box below as well all the best with the launch of the new

22:44facilities and continued growth in Bitcoin mining and let's follow up in the near future awesome thanks again for having me