Xive, a Bitcoin mining startup, is following the current trend of reusing old or ineffective cryptocurrency mining hardware for AI projects. Its chief executive officer and creator, Didar Bekbauov, thinks miners can use their experience building massive data centres to help satisfy the growing need for processing power in the artificial intelligence industry.

Because of Ethereum's switch to a proof-of-stake consensus mechanism during The Merge last year and the inefficiency of rigs previously utilised for mining other cryptocurrencies, there is a significant surplus of graphics processing units (GPUs) that can be redirected for AI tasks, but this is not possible with the specialised application-specific integrated circuits (ASICs) used in Bitcoin mining.

Bekbauov said, "I think there is an opportunity for new projects because Bitcoin miners have extensive experience in constructing large-scale data centres," indicating his optimism about the prospect of a shift in the focus of miners towards AI data centres. GPUs can be used for AI computations and cryptocurrency mining instead of traditional mining hardware. The Block interviewed the person who made this claim.

AI Client Shortage

Xive CEO Didar Bekbauov says switching from mining to AI data centres is difficult. Repurposing mining machines is easy, but finding AI customers who need plenty of computational power is difficult. Unlike Bitcoin mining, AI computing involves relationships with AI-related industries like image and video rendering. Bekbauov said that the AI business is more closed than crypto.

Bekbauov acknowledged the necessity to secure AI computing power demand from companies. He proposed working with AI businesses like OpenAI, especially image and video processing ones. He noted that while software development in these organisations is fast, hardware is slow.

Xive, a Bitcoin mining business in Kazakhstan and the US, indicated interest in AI data centres. Bekbauov said they knew how to develop and supply data centres technically but not business-wise. Before investing heavily in AI data centres, Xive is actively exploring collaborations with OpenAI and demand.

Hive Digital Technologies, another mining business, altered its name to reflect its concentration on cloud computing income prospects with Nvidia GPU cards. The startup wants to improve AI applications like ChatGPT.

The Block's data dashboard shows that Bitcoin miners' seven-day moving average revenue increased about 100% this year, despite diversity.

Hydro cooling and fish farms

Bekbauov emphasised the growing use of hydro cooling solutions for Bitcoin mining equipment instead of air or immersion fluid. Reusing the hot water for heating was emphasised.

Bekbauov cited hydro-cooled mine farms heating residential complexes, fish farms, and greenhouses. A Chinese firm uses hydro-cooled mining equipment to heat residential flats. Norwegian miners heat a top-three salmon farm. Increased water temperature by 10 degrees has cut salmon growth time from five years to one and a half years.

Bekbauov also mentioned heating greenhouses using mining-heated water.

Bekbauov noted the heat utilisation benefits of merging hydro mining with other enterprises, despite hydro cooling's complexity and increased maintenance requirements.

Future Bitcoin Mining

Bekbauov got into the mining business during 2018's tough bear market. He saw that Bitcoin mining had become a game dominated by big players with a lot of money and access to cheap power, especially in the US.

Still, he admitted that there were still smaller-scale mining operations, like those run by home miners and hobbyists, in places where power was cheap enough. These miners are determined to keep going because they can keep their costs down and run their businesses well.

Bekbauov said that he is sure Bitcoin will last, even if mining is made illegal everywhere in the world. He said that home miners will still be around, which shows how strong and committed they are to the coin.

Bekbauov also said that countries like Paraguay, Argentina, and the United Arab Emirates are good places for mining companies to go because their energy costs are lower than in other countries. These countries could draw new mining businesses that are looking for good places to work.

Regulations and ETF Excitement

While regulatory challenges exist, Bekbauov, who also mentors at Houston's Founder Institute startup accelerator programme, noted mining companies' lobbying efforts and the favourable regulatory environment in countries like the U.S. where bitcoin's decentralised nature aligned with its values of freedom.

“Kazakhstan's bad regulations are a concern. "Miners have a lobby in the US," Bekbauov remarked. “Even Biden recently wanted to tax miners 30% for electricity, and there was a lot of debate around it, and many public mining companies said that it would destroy the local crypto economy and force them to move. The administration stopped marketing it. It's good in the U.S. because huge firms like Coinbase are defending decent rules.

“In 2017, my biggest fear was, what if Bitcoin is banned everywhere and the price goes to zero? That worried me. "I don't even think Bitcoin can go to zero," Bekbauov said.

After developing a factory in Kyrgyzstan, Xive aims to expand to Hong Kong and Dubai, where regulations are friendlier, Bekbauov said. Dubai and Hong Kong have good rules. Bekbauov said several companies are considering shifting there, especially to Dubai.

After BlackRock's spot Bitcoin ETF registration, Bekbauov was optimistic about Bitcoin's future.

“I believe, now we have passed this uncertain period, where people were still thinking about bitcoin's future,” Bekbauov added. 

"I'm confident bitcoin's future is bright," he added. We're in the right industry. We're early adopters because most people don't know about Bitcoin. I think we live in an intriguing moment, and in the next decade, we will see a revolution in the world financial system, and Bitcoin will assume its honoured place.”