Cloud Mining Provider Kikohash Sets ICObr>
Alexey Smirnov is the CEO of cloud mining provider Kikohash.
Smirnov is a business leader with over 10 years of experience in offline and online entrepreneurship. He founded a number of companies, including an SMB cloud solutions software development company and an IT outsourcing company. Smirnov is an evangelist of cloud mining since 2015.
Kikohash is offering KIKO tokens as a coupon that covers 99% of the equipment cost, i.e. the cost of a particular GPU model inside a mining computer. Acquiring ownership of the equipment implies token redemption and creation of a contract in the user’s personal account. Users are entitled to individually choose the algorithms and coins for mining. They also have the access to the marketplace where they can lease their equipment.
Kikohash will make KIKO tokens available through an initial token offering (ICO) on November 21. One hundred percent of the issued tokens will be allocated for sale. Kikohash doesn’t generate tokens for its own possession.
BLOCK TRIBUNE: Could you tell us a bit how Kikohash got started?
ALEXEY SMIRNOV: Kikohash was founded on June 1, 2016. We simply copied the model of other cloud mining providers, added with the only, but very important, feature that we offered to our community – open-ended contracts (i.e. perpetual contracts for mining).
During the proccess we realized that we are gaining a stable fiat currency, but our clients are gaining risks due to the altcoins rate volatility and growing mining difficulty. We’re not comfortable with the fact that a product we copied from our competitors had a defect. So, we re-thought our goals and our marketing strategy. Our main goal that the equipment, owned by our customers, is working regularly and our plan to become a more specialized collocation provider.
BLOCK TRIBUNE: What’s the difference between cloud mining and traditional mining?
ALEXEY SMIRNOV: Traditional mining is about physical purchase of the equipment, installing it (at a home garage for instance) and mining (with all respective headache).
Cloud mining allows you to use the equipment of data centers and mine cryptocurrencies without the need to purchase hardware, software, spend money on electricity, etc.
But that’s really hard to call usual “cloud mining” (and since the market of cloud mining has a bad reputation).
Most of the so called cloud mining services offer limited (term) contracts for mining equipment, although their costs covers the purchase of equipment and electricity fee for the same period. After the contract ends, the equipment remains with the provider.
Opposite to that, our customers own the equipment. We kinda look after it, maintain and provide all necessary routine. Moreover, we will provide our customers an option to become a cloud mining operator – they will be able to rent their equipment to another users. That is why Kikohash is more like the accompaniment service for traditional mining.
BLOCK TRIBUNE: Is cloud mining still profitable after bitcoin’s second halving?
ALEXEY SMIRNOV: Due to the mining difficulty, it can be compared, in terms of profitability, with the HODL strategy, only in case of equipment shortage. The HODL strategy looks more profitable at a first glance. We can verify this statement by performing an analysis of NPV (Net Present Value) of investments in mining for any time interval.
But when we speak about profitabilty we should take in mind one unknown variable – the sell date of what we mined before. Cause there is really a big difference – to sell in “ordinary day” or in to the moon day.
BLOCK TRIBUNE: How risky is cloud mining?
ALEXEY SMIRNOV: Since the output of mining are “coins” the risk and the profit depend on the coins sell rate. Cloud mining with lease (1 or 2 year) contracts is very risky for the end customer. That is why our contracts imply selling the equipment, it is the customer’s property, not lease. I think that this is a normal process, when the market becomes more and more efficient and less risky due to new competitors.
BLOCK TRIBUNE: How many cryptocurrencies can be mined from your platform?
ALEXEY SMIRNOV: We mine ethereum-based coin, Zcash. Step by step we will expand the number of algorithms and number of available coins respectively. We are forced to use stable solutions that can be monitored to ensure high availability and service level compliance (SLA).
BLOCK TRIBUNE: There are a lot of cloud mining services. How are you different compared to your competitors?
ALEXEY SMIRNOV: We declare that equipment is an ownership of clients. We have unlimited contracts. These are our main competitive advantage. We are also the most transparent mining service – we publish all the numbers so that customers can compare and even see our margin.
BLOCK TRIBUNE: What do you hope to accomplish with your ICO?
ALEXEY SMIRNOV: We hope to increase the amount of equipment significantly, that leads to getting access to a cheaper electricity, thereby reducing the costs of our customers. We will invest in the development of a platform where our customers could lease their hardware.