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Interview with Fluffypony, OpenRigs Owner and Long-Time Miner

Last Updated May 6, 2023 2:58 AM
Gordon Hall
Last Updated May 6, 2023 2:58 AM

The South African cryptocurrency and hacking  scenes aren’t huge in terms of quantity but their high quality often surprises the world! Fluffypony has long been a fixture in these scenes so it made sense for me to interview him.

Fluffypony runs a mining farm and a Bitcoin business selling aluminium frames for rigs.  Combined with his keen interest in technology, this makes for an interesting conversation about the current and future state of mining and cryptocurrency. There’s some good info here for people worried about scrypt ASICs or the legislative risks to Bitcoin, also sensible speculation as to the best opportunities for cryptocurrency investors.

a metal shelving unit on a gray background
OpenRigs modular frame.


<GG> How long have you been involved with cryptocurrency?

<fluffypony> I started playing with Bitcoin in the middle of 2011 – I thought it was a cool experiment, but useless for micropayments, which was the space that I thought it would play well in.

In 2012 I started mining Litecoin, as the shorter confirmation times and higher number of coins seemed to lend themselves more to micropayments.


At that stage everything was a bit of a long shot – Litecoin wasn’t massively profitable, but it broke even for the most part.

<GG> Right, do you still see cryptocurrency’s strongest draw as facilitating micropayments?

<fluffypony> I think my outlook has changed a lot… micropayments will come, but they may not be integrated directly into any cryptocurrency due to the dust that accumulates – I think they’ll likely be built on top of cryptocurrencies.

<GG> OK cool, let’s get back to that. What was it like mining in “the early days?”

<fluffypony> OK well, it was all mostly a hobby, a bit of mucking around. I started playing around with FPGAs for mining Bitcoins, but when ASICs started to loom (from Avalon and BFL) I realised that the FPGA era was going to be short-lived.

So I started building up a little farm using 2nd-hand AMD graphics cards I picked up on Gumtree, and focused on mining altcoins that were more ASIC resistant.

<GG> Right, FPGAs are expensive compared to ASICs, is that their main drawback as you saw it?

<fluffypony> Well, at the time there were no ASICs, so FPGAs were expensive but still a better bet than GPU mining. And at least FPGAs could be resold as they were general purpose.

I felt that ASICs had no resale value, and I didn’t want to end up in an arms race that produced paper-weights. So as I said – I did this little horizontal shift to altcoins, as I had a bunch of AMD cards already and started building the farm up.

<GG> Looks like that was the right call. Heavy investment in ASICs seems to only make sense for those with access to cheap power. [South African electricity prices are getting expensive.]

<fluffypony> I figured that even if I didn’t break even, I could flog the cards and at least recoup my losses, which is something I couldn’t do with ASICs.

Scrypt Asics

<GG> Sure, gamers are always a market for GPUs… And now that scrypt ASICs are on the horizon, how do you feel about the future of GPU mining?

<fluffypony> I think it’s a tough space to predict the future. We’ve seen (relatively) innovative coins sputter and nearly die and we’ve seen the most retarded cryptocurrencies (Dogecoin I’m winking at you) become successful.

Something has to capture the technical audience’s attention. If scrypt ASICs do eventually launch, maybe a lot of GPU miners will just switch to other coins that don’t use scrypt.

Then again – it took quite some time before GPU mining Bitcoin became truly unprofitable even after FPGAs and even ASICs were available, so the shift may be slower than we think.

<GG> I’ve heard rumours that certain scrypt ASICs are already available in China. Just a rumour, or do you know if they’ve already seen limited release?

<fluffypony> GridSeed.  I’ve heard they’re available too – but “available” and “widely available” are two different things.

Even when Avalon’s first batch had shipped in its entirety, GPU mining was still profitable. So having an ASIC out there doesn’t mean the demise of GPU mining. It just heralds the start of the decline and it’ll be interesting to see just how quickly other established manufacturers jump on board, if any.

<GG> Do you think people will move away from scrypt coins if their reason for being (ASIC resistance) is nullified?

<fluffypony> Yes, I think that coins that are currently “CPU only” will see more active GPU mining development. So QuarkCoin and PrimeCoin, for instance, will move away from being mined primarily on VPS nodes to being mined by pre-existing GPU farms.

<GG> I’ve seen GPU miners coming out recently for Protoshares  and, I think, Primecoin.

<fluffypony> Yes, but they don’t have the level of maturity that cgminer (and sgminer, Veox’s fork) have. That level of code maturity in mining software is critical for larger operations.

<GG> Right, I still have no idea how to pool mine Protoshares, it’s pretty difficult with lots of tweaking required.

<fluffypony> It is. So maybe sgminer or even bfgminer will roll Primecoin or Protoshares or QuarkCoin in. And then existing tools that manage cgminer instances will be able to manage those.

<GG> Right. I don’t know if you’ve seen Vertcoin  – and there may be others – which use a new scrypt implementation? It’s also said to be ASIC-resistant (for now).

<fluffypony> Yes – I’ve played around with them. A lot of the ASIC-resistant coins employee common techniques to be ASIC-resistant, such as more rounds, higher memory usage, etc.

<GG> Yeah, I’m currently trying out VTC. At this point, would you believe any coin can realistically be GPU or ASIC resistant long-term?

The Future of Cryptocurrency Hardware and Software

<fluffypony> Well let me put it this way. 10 years ago I don’t think anyone thought that guns would be readily available but here we are on the apex of mature 3D printing technology; where warlords will just print weapons, even in metal and other composites.

Now in the next 5 years, who knows. Those technologies could be adapted to print circuits complete with components on.

<GG> Sure. I believe 2014 will be a big year for 3D printing as patents expire and a lot of the tech gets cheaper.

<fluffypony> Today’s ASIC production methodologies are complicated but in the next 5 years the production side might be trivial and ASIC manufacturers may license blueprints to local chip “printers.”

Which means – long story short – that true ASIC resistance is a not a matter of absolutes but a matter of “for how long.”

<GG> Hmm, that seems pretty plausible to me. Possibly people creating new coins could go into the business of selling blueprints for boards best-suited to their mining.

<fluffypony> Yeah – so there’s lots of potential in the future.

<GG> And do you see cryptocurrency driving hardware evolution? I mean, could it be the economic reason to develop home chip fabrication and so on?

<fluffypony> Well, I don’t think we would’ve thought it possible for small companies to be able to design, develop, program, and tape-out custom processing chips from scratch. Until now – because previously there’s been little economic incentive.

Previously it was: want a custom chip? Well, you’d better have deep-pocketed investors who can see a very, very long-term vision.

Now it’s: want a custom chip? Just show them some mining calculators and they’ll throw money at you.

<GG> OK, so you think right now there’s a lot of investment money waiting for improved chip designs due to crypto’s profitability?

<fluffypony> Yep, absolutely – let’s be honest, money drives innovation.

<GG> Certainly a lot of people in the community seem eager to throw money at pre-orders but I’m talking big investor money, funds and so on.

<fluffypony> I think a lot of big investors aren’t interested in mining, but they are interested in peripheral services and products.

<GG> Right, Coinbase would be a good example. Are there other related services and products you see as particularly promising to investors?

<fluffypony> I think that there is massive potential to build accessible services on top of cryptocurrencies.

Right now even web-wallets require a modicum of technical ability. A credit card requires NO technical ability.

<GG> Right, this is true and you alluded to this earlier when you mentioned microtransactions. [built as services over existing blockchains]

<fluffypony> Exactly. I think investors see potential in “broad appeal” technology, not complicated stuff that requires air-gapped computers, paper wallet backups, and private keys.

<GG> So you think Generation 2 stuff which builds new features and greater accessibility on top of existing blockchains is going to really take off?

<fluffypony> I really do.

<GG> Right. And I agree, it needs more mass appeal to go fully mainstream – and then the profits will be insane. So any Gen 2 stuff you’re following?

<fluffypony> A lot of the Gen 2 stuff I’ve been looking at is still too “technical.” Like Trezor is really nice but still too “Bitcoin” and not enough “Credit Card” or “PayPal.”

<GG> Well, that has its advantages… outside of familiarity and ease-of-use perhaps.

<fluffypony> Trezor  is great for people like me – we’re already in this space, and we want some more accessibility but we don’t want to compromise security. But it’s the wrong product for my mother, who is still typing on her iPhone by stabbing her screen with her forefinger.

<GG> Right, it still requires knowledge of the Bitcoin system to use?

<fluffypony> Yes, it requires too much knowledge. I think that product and service builders need to think of Bitcoin as cash. I don’t need to know anything about someone to hand some cash over to them.

So Bitcoin addresses *look* complex to the uninitiated, even though we understand what they are and how they’re constructed.

PayPal works because all you need to “know” is the recipient’s email address. And PayPal is (effectively) built on top of cash.

So future services will provide the ease of use that PayPal does (and maybe the buyer/seller protection and dispute services), but built on top of the Bitcoin protocol.

<GG> OK, so ideally all the crypto and network stuff would be under the hood, and people would have a simple GUI, or physical product in the case of cash-like usage?

<fluffypony> Yes, exactly. When developers start thinking of Bitcoin as a protocol and not a currency, great things will happen.

<GG> Right, well the economic incentive is definitely there, so I think that sort of thing will happen soon!

<fluffypony> Definitely!

The State and Surveillance

<GG> At that point, do you think there’ll be any chance of stopping cryptocurrency? Like if central banks or states resist the technology…

<fluffypony> No, I think there’s no way – it would take a super-power to get anywhere close to 51% of the processing power of the Bitcoin network, for example, and by the time any of them react it’ll be too late even for that.

They can’t block the protocol because the protocol can change in a heartbeat and it would be trivial to encrypt the communication and port-hop between nodes.

<GG> One could disguise crypto traffic, if that’s what you’re saying?

<fluffypony> Yes. So there’s no real technical way to stop this

<GG> OK and what about the drastic “internet kill switch” option?

<fluffypony> I think all that effort to stop a cryptocurrency is overkill and unlikely.

<GG> Well, I don’t think it’s a war they can win, but RIAA did go after music pirates…

<fluffypony> They did. So that’s the tack they can take: they can’t stop it technically but they can attack it legally. They can outlaw its use –

<GG> Right, make examples of people in court.

<fluffypony> – but if history is anything to go by, people will find ways of hiding it (Tor, embedding traffic over HTTPS, etc.)

<GG> Right, I believe Mike Hearn recently mentioned some changes relating to Tor.

<fluffypony> Yes – he spoke about 4 changes that are coming and one of them was Tor routing.

<GG> I believe it’s already possible to use Bitcoin through Tor. Though I haven’t tried it, I’m sure there are Tor nodes.

<fluffypony> As far as I know it’s possible, this is just more of a baked-in approach to make it easier.

<GG> Well, I think nations that do go so far as to outlaw or excessively regulate cryptocurrency will only damage their ability to compete, at least with nations which take a more hands off approach.

<fluffypony> Yes. Sometimes we forget we’re talking about money, which is a driving force behind so many things. When governments tax excessively, people and companies just move their holdings to tax havens, like the Isle-of-Man.

<GG> Sure, crypto itself can be a kind of tax haven.

<fluffypony> Yep. And it can be a major alternative to cash for organised crime to hold their funds in. So just like cash and many other things, it can be used for good and for bad.

<GG> I agree, money is a tool and crypto is just a more advanced tool. I’m sure it won’t put governments out of business though, they’ll just find more real-world things to tax.

<fluffypony> Yeah I agree – I sometimes read a lot of Libertarian views on that; where they view governments and taxes as inherently evil. But I don’t think that cryptocurrency will allow them – or anyone – to truly avoid paying taxes.

<GG> Well, perhaps not in future when governments get a better handle on the technology…

<fluffypony> It’ll just allow them to skirt around many of the taxes that the dodgier tax advisors can skirt around anyway.

<GG> Right, it democratises tax avoidance in a way – previously only the very rich and corporations could get away with it.

<fluffypony> Exactly, and we mustn’t forget that for every Libertarian hiding their income from the “evil government”, there will be an honest person legitimately declaring their earnings and holdings and paying their piece.

<GG> Well, I’m not sure about the wisdom of paying governments. It only encourages them.

<fluffypony> Well, I’m of the opinion that man-made governments are always going to be prone to corruption and dishonesty, so they aren’t really good at ruling mankind… BUT I don’t feel my opinion gives me the right to break the law from a tax perspective if I’m living in a country ruled by a government, no matter how much I disagree with that law.

<GG> OK, that’s fair enough. But realistically, the only way to monitor crypto so it can be effectively taxed would be through an agency like the NSA. This is getting a bit dystopian sci-fi, but do you think crypto may lead to further internet surveillance?

<fluffypony> Realistically that is a possibility – maybe governments will increase Internet surveillance because people will become more disinclined to declare earnings.

I think we’re still very much in unchartered territory with the Internet and in future we will be more identifiable online.

If you walk into a shop they have your face on video, they have your identity from the card you swiped, and they reserve the right to get details from your ID or passport or SSN to identify you. Transacting online is going to head that way.

<GG> Probably, although there seems to be a new market in online privacy developing.

<fluffypony> Sure – but that will be backroom commerce. For the most part, most people won’t care that a company selling pencils knows who they are.

<GG> No, most individuals won’t, but at the state level…

<fluffypony> I think we’ll eventually create a distinction between the Internet (that won’t be anonymous), and things like Tor and other Darknet services that *will* be anonymous by design.

<GG> OK, sort of like public, commercial and private space.

<fluffypony> Yes. If I walk into a shop and buy something, I am making that data available to the shop, and by extension to the government if they have a court order. But if I go to my neighbour and use cash to buy some flowers from his garden, that doesn’t go into any record-book anywhere.

<GG> Sure.

<fluffypony> So I think e-commerce and online services will go down that road. Some people will value privacy more than others and will spend time using privacy-oriented services on privacy-oriented networks.

And most of the planet won’t care about that – they seem to be quite happy with the NSA siphoning their information.

<GG> Well, citizens perhaps, but I’m sure at a corporate and state level there’s concern. For me the major problem with credit cards and PayPal usage is that data goes to a user’s government, but also to a foreign power: America.

<fluffypony> Definitely – so maybe, possibly, those concerns will drive change.

<GG> The Germans seem particularly unimpressed with the whole thing.

<fluffypony> They do. And hey – I’d much prefer my information and spending habits aren’t out there for consumption by anyone. But ultimately, I guess, we have to wait it out and see what happens

<GG> Yes. On that note, have you looked into Stealth Addresses? 

<fluffypony> Yes. I find stealth addresses and a lot of other privacy-driven technology really interesting. And it goes back to what I said earlier – if I buy a pencil I may not care, so if that is public, so be it.

But if I’m buying something I want to keep private (pregnancy test, plastic surgery, whatever), then stealth addresses are great for that.

<GG> Sure. I’m not sure they do something new, just make existing crypto features more accessible?

<fluffypony> Well, it’s a little more than that. Stealth addresses basically takes out the need for bi- or omni-directional communication.

<GG> OK, right. So you don’t need to secretly communicate your address first for a private transaction to happen?

<fluffypony> Yeah. We’re not talking about hashed pubkeys, which is the typical way we transact with cryptocurrencies. There was a comment that Peter Todd made that sums it up nicely:

“A good example where this is valuable is you put your stealth address on your business card and give it to me. Sometime later you call me on the phone and say “Hey! You owe me for that beer!” I can just pay you immediately right then and there with the stealth address without you needing some payment server to give me a fresh pubkey, yet the transaction is still totally private.

Similarly, you can put your stealth address as part of your OpenPGP key, and with the web-of-trust I can be sure I’m paying the right person. Or do the same thing with a X.509 certificate.”

<GG> I must definitely investigate this further. It sounds like business will love it, as it makes it harder (impossible?) for competitors to look through the blockchain at all their sales, etc.

<fluffypony> Yep, it’s great for commerce.

Cryptocurrency Ecommerce

<GG> Right, well speaking of, how long have you been involved with crypto in ecommerce?

<fluffypony> Well, we added Bitcoin support to one of our online stores  in April, 2013. That was my first foray into Bitcoin in the ecommerce space.

<GG> Ah yes, I saw that store from a link in the BitX forum. [BitX is a South African Bitcoin exchange.]

<fluffypony> All our stock is paid for in fiat. We convert most of the Bitcoin into South African Rands automatically (through BitPay) and keep a few % in Bitcoin, which goes into a group wide slush-fund.

<GG> OK, well it seems to me the crypto market demographics are mostly young men, have you had much luck accepting Bitcoin for cosmetics?

<fluffypony> We get quite a few guys buying presents for wives/girlfriends, but it only makes up about 3% of our payments on Salon Supply Store.

<GG> Ah, right. Still, it’s a start.

<fluffypony> Obviously on OpenRigs  it’s a little more cryptocurrency-centric. There we get about 14% in Bitcoin, and the rest in PayPal.

<GG> So tell me a bit more about OpenRigs.

<fluffypony> OK so, my mining operation is a little bigger than it was in 2012 ;) –

<GG> Right. :)

<fluffypony> – and it necessitated a need to move away from plastic laundry baskets to proper frames. So I bought a welder and made some steel frames, but it ended up being a lot more work than I expected and a lot dirtier.

<GG> Yeah, I welded up a stove last year. It’s hard work.

<fluffypony> I wanted to find a better way and that eventually led to the design and creation of the frames.

So, on the farm we’re running 3×3 Arianna grids and each grid has 9 rigs.

<GG> so you’re running 81 rigs, or do I have the maths wrong?

<fluffypony> Each grid has 9 rigs, and we have a bunch of grids (I’d prefer not to give out the exact number).

From running a mining farm, there’s a lot that has sprung out of it, besides the frames. There are other solutions we’ve developed and we’re busy turning those into products.

<GG> You mean stuff like cooling and monitoring?

<fluffypony> Yes, exactly.

<GG> Cool, so OpenRigs will expand with new products?

<fluffypony> Yep. We have a rack-mountable frame that we’re launching in the next few weeks. And we have a few other non-frame products that will be coming out in the next few months

<GG> I think it’s cool a South African company is developing new stuff in the crypto space. My editor, Caleb Chen, had some questions about OpenRigs too.

<fluffypony> Sure.

<GG> He asked about your % sales in BTC, but you answered that… Which countries do most of your orders go to?

<fluffypony> Lemme pull those stats quickly and I’ll give you an accurate figure :)

Basically, North America is king of our orders.

[Fluffypony linked to some stats showing percentage figures of international sales. The USA accounts for just over half, with the UK and Canada close to 10% each.  Next, at under 5%, are Australia and The Netherlands.

Below 3% are Germany, Sweden, Switzerland, Russia, Norway and France.

South Africa is next at just under 1%, followed by a host of sales to countries all over the world.

I was surprised by China’s absence, but perhaps they have a surplus of expert welders or a strong competing company.]

<GG> Caleb also asked “What prompted you to start this business?” but I think you answered that, saying it grew out of your own hobby and getting serious about that?

<fluffypony> Yeah – we developed the product for internal use and then decided to productise it and sell it.

<GG> Another from Caleb; what is the largest single order that you have received? How many GPUs worth?

<fluffypony> We regularly get large orders from farms, in the region of 30-50 units. Some farms use Giorginas (horizontally stackable units) and some use Arianna grids (vertically and horizontally stackable).

<GG> Another question; what advantages does your OpenRig provide over a milk crate, or DIY open air case?

<fluffypony> Well, a milk crate doesn’t look as good and doesn’t breathe as well. A DIY open air case isn’t a terrible solution for the home miner but we’re finding three main classes of customer:

1. the professional mining farm, they have already made money and are continuing to do so, and so our frames just give them better organisation, better access to components, and definitely better cooling.

2. the pro-am circuit, guys with a few rigs in their basement. Some of these guys may choose to build their own, but then we get a lot that have tried and prefer to buy our kit because it’s cheaper or better looking or whatever.

3. the smaller miner. A lot of this crowd are in trouble with their wives (I kid you not) because their setups look UGLY, so this gives them the opportunity to make their setup look good (and increase the WAF, Wife Acceptance Factor) whilst providing added benefits like better cooling, better component access, etc.

a metal shelf with a bunch of electronics on it
An OpenRigs system minimizes clutter.


<GG> Ha, I see. Caleb also asked, what is your favorite altcoin?

<fluffypony> There are so many I like – I like PPCoin for introducing proof-of-stake, I like Dogecoin for just being ridiculous, I like Primecoin for showing us that there are alternative and useful algorithms, and I like Franko for sticking around and having a strong community.

I do also like Litecoin for bringing in the first decent and popular Bitcoin alternative, and Feathercoin for doing the exact same thing but for Litecoin. :-P

<GG> Ah right, speaking of Doge, I know you said you mined quite a lot. If you follow markets, you might have noticed that Dogecoin was up over 10% during a time when Bitcoin came down about 5% – and a lot of the other alts lost a lot more.

<fluffypony> Yes, it seriously bucked the trend.

<GG> Yeah. Traders have remarked on this, saying it has to do with miners using Doge to acquire more Bitcoin. Do you have any thoughts on this?

<fluffypony> I don’t think miners drove that. I’ve long held that altcoin trading markets may be influential on each other, but they do not perfectly imitate each other’s movements.

I think that Dogecoin lit a spark in the eyes of many. Because it was so utterly ridiculous, how could it succeed? But how could it not succeed? Even now it defies all logic.

<GG> So you think Dogecoin was experiencing “organic growth” due to the bobsled story?

<fluffypony> Even before that, it was featured on news articles all over the place. I don’t think anyone expected it to have that level of success.

<GG> Well, I was certainly surprised that of minable coins it’s now #4 in terms of market cap. 

<fluffypony> Yep. I also think a big panacea to the downward trend, that many altcoins faced at the time, was the nature of the Dogecoin community. It’s definitely shifted a bit now towards “oh, we can make money” but a month back (basically years in Internet time) it was really friendly towards newcomers. Lots of people dishing Dogecoin out for no reason whatsoever, very little talk of Wolong or of upcoming pumps/dumps.

<GG> Right, I saw Wolong’s chat log [about “teaching people to fish”]. The Chinese Fontas.

<fluffypony> Yeah, exactly. Nowadays in #dogecoin on Freenode it’s all they talk about.

“When is Wolong going to run the next pump?” “Will Wolong let us know about it?” “Come guys, I need a pump now.”

<GG> Sure… I’m of two minds about Doge. It’s cool that it brings in new people who’d otherwise miss the crypto thing, but on the other hand it gets spammed a lot which irritates me.

<fluffypony> Dogecoin defies odds – it’s like the Brony movement of Cryptocurrency. It shouldn’t exist, but it does! :-P (and I say that as a fluffypony)

<GG> Ha, right… But I worry newcomers will lose money trying to get in on pumps.

<fluffypony> And, of course, there are the immitators – Nyancoin etc. have all tried to hop on the “omw memecoins” bandwagon. Which is a stupid reason to start an altcoin.

<GG> Yes, I’ve seen at least 3 cat-related coins.

<fluffypony> But here we are in 2014 where starting cryptocurrencies is actually a trend.

<GG> Well, it’s a free market :)

<fluffypony> Which is a good thing, but also leads to a lot of junk.

<GG> OK, and last time we spoke a bit about Namecoin. I remember you had some reservations about it?

<fluffypony> Yeah – I think it’s a great idea, in a sense, but it needs to have more reach. What I mean is that a major DNS provider like Google DNS needs to support it. 

<GG> OK, do you see any chance of that happening in the near future?

<fluffypony> Not at the moment. I hope it happens because I think that decentralised domain names are awesome. We don’t need no steeeenkin’ ICANN! 

<GG> Yes indeed. I’d like to move my site over to one, especially if there’s a decentralised solution for certificates. I believe people are working on that with Gen 2 stuff like Keyhotee, but I haven’t really got my head around it yet.

<fluffypony> Yeah, agreed.

<GG> Right well, I don’t want to take up too much of your time. Is there anything you’d like to mention?

<fluffypony> Nope I think that’s about it – shout if you need to check or clarify anything :)

<GG> Right, enjoy your weekend and thanks for answering my questions :)

<fluffypony> Cheers!

<GG> Bye.