Crypto mining pioneer moves headquarters to Cheyenne
CHEYENNE — In a state well known for its mining industry, one West Coast startup is ushering in a whole new wave of miners as Wyoming continues to lead the nation in digital asset technologies.
Elite Mining Inc. announced this month that it has officially acquired two manufacturing facilities in Cheyenne and will be setting up shop in the former Habitat for Humanity building downtown. The Washington-based company will move its executive offices, marketing, sales, research and development and production to the Cowboy State within the next few months.
The company will be producing its 28-foot elite mobile units that house its one-megawatt immersion mining pods and will also offer hosting and investment opportunities for crypto speculators.
CEO Justin Podhola said the company was drawn to the state’s crypto-friendly regulations, with 24 laws providing a legal framework for digital asset companies, including “crypto bank” startups Avanti Financial and Kraken.
U.S. Sen. Cynthia Lummis, R-Wyo., and Wyoming Gov. Mark Gordon continue to rally behind blockchain and Bitcoin-related industries to offer a new frontier for digital asset companies.
Unlike other crypto companies, which establish virtual forefronts to take advantage of low taxes and minimal regulations, EMI will maintain a physical presence in the state, with the hopes of hiring up to 40 new positions, some of which have already been filled, Podhola said.
He admitted he was surprised to hear that Wyoming was leading the charge, but immediately thought he needed to set up shop here. Now, his challenge is to explain exactly what it is that he and his company do.
Cryptocurrency and data mining are probably two of the least understood modern technologies, Podhola noted, simply because it’s an entirely new way of thinking about currency.
In a nutshell, cryptocurrencies like Bitcoin are a type of peer-to-peer digital currency that isn’t backed by traditional banks or governments, also known as fiat, that determine the value and regulation of currency. Instead, Bitcoins are backed by code, and are created, distributed and stored in blockchains that act like a decentralized digital ledger system that keeps them secure. There are no tangible, physical coins; rather, balances are stored on a ledger that validate the currency and store it publicly for everyone to see.
The idea of Bitcoin stems from a white paper released in 2009 by Satoshi Nakamoto (likely a pseudonym) as means of creating a non-government issued currency operated by a decentralized authority with the goal of creating a borderless, peer-to-peer financial network with lower transaction fees and greater accessibility for users.
This is where people start to get really confused, Podhola admitted, and have a hard time wrapping their heads around the concept of a digital currency.
But it’s no different than our money today, he said, given that the U.S. monetary system is also digitally represented, despite the dollars we might be holding in our wallets or hands.
“What they don’t realize is that all of their money that they’re using is already digital,” he said. “It’s just being printed and handed to them in cash.”
Cyrptocurrency is a lot like using a credit card in an already largely cashless world, he noted. And like the credit card network, the bigger it is, the more valuable.
“Nobody is using cash anymore, right?” he said. “So, Bitcoin is the next evolution of that.”
It’s also deregulated and borderless, and allows a person to send small and large amounts of money from their computer with no cost and within seconds to anyone in the world without having to go to a bank or wait for funds to transfer.
There’s also a finite number of Bitcoins – an ultimate total of 21 million, with about 17 million still in circulation, according to Coin Central, and 2.18 million still to be mined.
The value of a Bitcoin on Oct. 30 was just over $61,000 per coin, a rate that fluctuates wildly, but seems to be on a steady upward trend.
The concept of Bitcoin mining is, in itself, another convoluted concept to break down, said Podhola, who compared it to the process of gold mining. Whereas gold miners use equipment to dig into the earth to extract gold or another valuable ore, crypto mining relies on computer power, known as “hashing” in the crypto world, using application-specific integrated circuits (ASICS) run by intensive graphic processing units, or GPUs.
Unlike gold mining, the yield is finite, with a regulated release of currency into the cyber network at about 10-minute intervals in which thousands of computers operating all over the world attempt to grab the coins by solving computationally difficult puzzles to discover that new block in the blockchain that records and verifies the Bitcoins.
The reward is halved every four years, Podhola said, so when it began 12 years ago with 50 Bitcoins, it decreased to 25 and 12.5 eight years later, respectively, to a total of 6.25 today.
The impact of these decreases is the exact opposite of fiat currency, he noted, that deflates and creates a hard asset that’s constantly reducing and is expected to continue for approximately the next 40 years.
Mining the digital currency is the tricky – and very costly – part for investors, which is where EMI comes in.
Years ago, people were capable of mining from a desktop computer, but with the advent of so many more prospectors getting in the game, so, too, has the technology advanced to the point of massive mining units.
Given the roughly 1 megawatt of power needed to operate a crypto miner, about the equivalent of what a big box store like Walmart requires to be operational, the units are costly, massive and very loud. A hundred of these miners running in one room sounds a lot like a supersonic jet about to take off, he said.
EMI’s elite mining units, by contrast, are submerged in their proprietary biodegradable immersion mining fluid that Podhola has engineered and designed to keep the units cool and free of dust and other contaminants. By taking away all the high-waning noise of the fans, the immersion fluid offers a perfect environment for circulating from the tub to the heat exchanger, he said.
They’re also submerged in a trench in the ground that Podhola referred to as an “alleyway,” much like the underground work area at a Jiffy Lube.
The IMPs are also compact and portable, with wheels, and unlike other much larger mining units, can be transported by a three-quarter ton pickup and don’t require a semi or CDL driver. Along with being much more eco-friendly, they also have an increased hashrate of over 30 percent, with a 99.7-percent uptime, according to the product data sheet, compared to typical air-cooled miners.
Each 1-megawatt elite mobile unit retails for $300,000, and currently, the company is booked out for the next year with 45 orders and potentially more in the works.
Along with selling these units, EMI also offers hosting services and investment opportunities for prospectors, with a $10,000 threshold.
Podhola, who founded and developed the company’s technology, is looking forward to growing in the firm’s new home and hiring locally.
“Right now, our trajectory is the sky’s the limit, in all honesty,” he said. “We’re looking forward to lots of growth.”
As for the positions that will be available, all “nerds” and “techies” are invited to apply.
A fellow nerd himself, he joked, he’s also looking for those in trade fields, such as welders, plumbers, electricians and other manufacturing roles. He’s also planning to hire a full-time staff therapist to help employees with any mental health issues.
“I can’t begin to tell you how many companies don’t do that,” he said, “but it’s so important to have someone there if a person is having any problems.”
The 35-year-old CEO is eager to settle into his new digs, he said, and already feels right at home in his adopted state, having grown up in a working-class town on the Washington coast, where he was raised by a single mom. As an 18-year-old, he worked two full-time jobs while also building his own house that he finished and fully paid for by the time he was 21.
“I love Wyoming,” he said. “These are my kind of people. Salt of the earth.”
Once he gets settled, he’s planning to give back to his newly adopted community by investing in resources to help the homeless community and those struggling with mental health issues, which he puts a lot of stock in.
Unlike flipping houses and his early days trading on the stock exchange, he’s excited to be heading up a new venture and investing in people.
“I get to grow a big business, which is really exciting for me, and I get to actually influence others in a very positive, impactful way.”