Building A Crypto Mining Hub In Georgia
Beka Vashakidze founded Bitcoin & Fund Group (BF Group) last year with the help of friends and family, a cryptocurrency mining corporation offering hosting options to a global audience.
He didn’t expect it, but when Beka started vlogging on YouTube about their new mining farm in Tbilisi last year, he quickly got thousands of followers. Daily people would comment on his videos - and he unintentionally started a large and tight online community around their initiative.
And that’s when Beka realized that the next move would be to do a so-called ICO: an Initial Coin Offering and he founded Ambit Mining for this. It’s when a company offers a quantity of cryptocurrency to investors in the form of “tokens”, in exchange for other cryptocurrencies - to fundraise for new projects. In the case of BF Group, their ICO funded capital will go toward expanding their hosting services.
Often, companies do an ICO before they even have a product, making it a really risky endeavor for investors. But in the case of Ambit Mining, the infrastructure is already in place. “We are not testing something new, we are not building from scratch,” Beka tells me in their office, “As Andreas Antonopoulus [a well-known Greek-British bitcoin advocate, host on the Let’s Talk Bitcoin podcast, and a teaching fellow for the M.Sc. Digital Currencies at the University of Nicosia] said, ‘build it first, and they will come, rather than funded first, and we build it later.”
Ambit Mining offers cryptocurrency miners the possibility to use their services to mine cryptocurrencies, including Bitcoin, Ethereum, and several altcoins - emerging cryptocurrencies. A cryptocurrency is a form of digital money designed to be secure and anonymous in most cases. It uses a technique called cryptography — a process used to convert legible information into an almost uncrackable code, to help track purchases and transfers. The most well-known cryptocurrency is Bitcoin.
These cryptocurrencies are digital, they use elements of mathematical theory and computer science and can’t be printed, like other currencies. To create them, you need a lot of computer power. You could do it from your own home, but you’d have to invest a lot of money in the right kind of hardware - and continued high costs for insane amounts of electricity to run the hardware - which include GPUs (graphics processing unit) for Ethereum and ASICs (application-specific integrated circuit) for Bitcoin.
That is why some mining farms, such as Ambit Mining, offer people to mine in their mining farm. And Ambit Mining does so at a competitive price. Ambit Mining offers their hosting service including full maintenance, 24/7 Security, CCTV, at a non-beatable $0.05 electricity price, a customized remote desktop control and a 24/7 Help Desk - saving miners considerable costs on buying hardware and electricity.
Ambit Mining’s mining farm is located in the Tbilisi Industrial Freezone, meaning that besides low electricity costs, they are also exempt from VAT and other taxes.
“We are very transparent,” Beka says, “Our blockchain shows how much hash power we have.” and it’s the hash power which determines how many cryptocurrencies can be mined.
Currently, about 5 MegaWatts (MW) of their mining farm is reserved for hosting only, which is maintained and managed by the BF Group. Beka tells me this is roughly enough for approximately 2000 miners. And in the future they are planning dividends not only for mining, but also for hosting services. In this way, people can generate revenue and dividends from both, diversifying their risks.
Beka explains that they are doing the ICO now to expand their mining farm hosting facility to 20MW. And they have quite a lot of interest in their ICO already.
But how did Beka get into the cryptocurrency world? Studying Business Management at Kingston; Management and Organizational Innovation at the Queen Mary University of London, and Shipping Trade and Finance at City University London, cryptocurrencies weren’t necessarily on his radar. But it was then when he decided to buy a few bitcoins, only to completely forget about it a few years later.
“I was back in Georgia working in the oil and gas industry, and I was searching for some data I had used in my MA thesis,” Beka tells me how one day he got out his old laptop. It was just a regular day at the office. But when he opened his laptop, he saw the links to his digital wallets. “A friend had just told me a few days before that Bitcoin had gone up in price, so when is saw my own wallets, I decided to take a look.” Although one of the websites had shut down in the years after he had purchased his first coins, his other wallet was still online.
“I couldn’t believe my eyes, the coins I had bought for 3 pounds only, were now worth thousands.” Bekas says excitedly. He immediately decided to read up on it and soon after started trading in cryptocurrencies. It was then that he realized a much smarter strategy would be to build his own mining farm.
“I saw it as innovation, a permissionless trustworthy system,” he says with a twinkle in his eyes. “It’s P2P [peer to peer] sharing without someone else intervening.”
It was the Ethereum coin, however, which provided Beka with the opportunity to do business differently, and to fundraise. “You can involve the crowd and make it more decentralized, it’s fundraising without Venture Capital.”
And in September 2017, with seed funding from friends, family and shareholders at Eko Gaz and GAMA - the companies he worked for - they started operating their own mining farm in the Tbilisi Industrial Free zone.
In the past few months, the initial investment that was needed to build the farm has already been earned back through their mining activities. Now, Ambit Mining aims to raise even more to expand their business and become a major global player in the cryptocurrency mining world.
And they have an impressive team, including advisors, consisting of Besides Beka himself, Kay Khemani CEO of Spectre.ai and former executive director of Goldman Sachs, Miguel Palenica CIO of quantum, Nodar Kolmakhidze CIO of Cindicator, Davit Mrelashvili Region lead of ZenCash and several others.
“Our cryptocurrency project has completely taken over my life,” Beka says, “There is no sleep, no time, no daily life. I am completely submerged.” But he is enjoying every single minute of it.