For Pt. 1 of this interview, click here!
How many people are in 112bit? Are you doing it alone or do you have a team?
There is a girl who does orders and such, and I do sales and more with help from another guy. We are looking to add more people especially in support. Someone who likes to play with every new unit and look at it from multiple ways. We are also going to add two persons to process orders more rapidly.
You have a good relationship with Bitmain. I know you have worked very hard to develop the relationship. How do you feel it has impacted your business?
Its effects are a lot. In many situations, we need access to the developers and engineers. To achieve that we had to develop that relationship. With the Chinese, it is important to adapt and learn their way of doing things so we can meet the requirements of the US customers. Knowing when to ask the right questions and when to filter the data to get the results. You need to respect them and make them respect you. Different culture and time zones, and we all love the same thing – Bitcoin mining. Instead of fighting you need to sit back and take a tea, and relax to find a different way to approach the situation. When you fight, it is like fighting a bull – you will not win. You need to relax and understand what they are trying to say and make sure they understand what you are trying to say. We need to be clear and focused.
What drew you to Bitcoin mining and eventually selling mining hardware?
I had been doing international businesses from 2001 serving customers in many different countries. All the time receiving and making payments was a challenge. I was a user of Eagle and some others, but it was not easy.
When Bitcoin came about, you could send it easily to others, even in small countries. People without credit cards or a banking system, or because the payment was very low. When I first saw bitcoin I was very skeptical. I did not understand it and I was trying to compare it to something I knew, but it was different. Once I understood that Bitcoin is not based on banking or a single business I understood it better.
In 2010, I started mining but I got bored because it made no sense and no one was accepting it, and none of my customers had ways to get them, so I dropped it. After the big rise in April 2013 I started getting involved again and had more time. I got involved in trading, but it was nothing that motivated me to get up in the morning. It was just money.
I then started mining with negative results, so I realized I needed to do something bigger. We realized we had to go to the source. Finally, we started talking to Bitmain. That is how I got involved, and I believe that Bitcoin will keep growing. We need to not get too excited when it is too high or too low because no one knows what it should be yet. Of course, I want the Bitcoin price to be $4000, but it is a process that takes time. It is long term. I like it, and it is growing. I hope it keeps growing and gets more stable. It will not happen in one day. When it does, we will get a bit depressed because we will say “Hey nothing is going on”, but it will be stable. We will say this is getting boring. LOL
How has Bitcoin influenced your life above and beyond the business aspect?
It is a personal question and needs a personal answer. I never saved any money in my life. Savings was like stealing from yourself. With Bitcoins, I do not want to just spend them, I am saving them. I am not thinking how can I spend them, I am thinking how can I save them and get more. It looks like, in my case, it is a way to do savings. I have never done this in my life. I spend money and find ways to produce more. Now I am trying to produce more but to save it. When I had money at a stock exchange and the market went down 2%, I would feel a lot of pain, but now when Bitcoin drops 25% – it is a process. I am still keeping my bitcoins. For me, it changed the way I approach money.
The Antminer S2 sold out very fast, and people are already eagerly waiting for the batch 3. How do you think the launch will go?
Bitmain will always try to exceed expectations. Our policy is to always provide miners in hand and not do pre-orders. We will try to move out of the batch model as soon as we can and we will not launch a batch 3 unless we need to. Quite soon we will have many units in hand for the same day of shipping. So in some way a batch 3 would be a failure. We are trying to avoid it, but we have much pressure to do it, people wish a batch 3. In maybe one week we will have an exact date and in 12 days or so we will have units in hand, so we try to avoid it. We have lots of pending orders, and we prefer not to do it. The main reason for a batch 1 and batch 2 is you need to deliver some units to market. Then you need to see the results and do the adjustments you need to do. Then make them and send batch 2, and we are hours before batch two shipments and people will have them and a few days later we will have the feedback and in another 10 12 days we will be in full production and shipping every day. We do not wish to do the pre-orders, an order is complete when the customer has it. We do not want to have lots of open orders and waiting and waiting. More batches are time consuming. You then have so many people without the units. It is a waste. We do not wish to do it.
What do you think of the Bitcoin community as a whole? Whether it is an online community or customers and people you meet at the conferences. Even competitors seem to work together as a whole to further Bitcoin.
I think it is maturing, and there is much cooperation, unfortunately let’s enjoy it now as when it gets more and more professional it will get much more competitive, and people will stop cooperating. The nature of any industry is like this let’s enjoy the time because, in the future, everything will be colder. Non-cooperative and people taking unfair advantage of others and getting not good results will happen. Enjoy it now.
How long do you think this period will last?
One year and a half maybe. Many will still be cooperating, but others will not. They will suck information from us and give nothing back. It is a selfish approach. I do not see why this industry is different and will last this way.
Do you still run any miners of your own?
Yes, many of them. Obviously Bitmain but others as well like Cointerra. I try them all. I like the units and mining. This business of trying to provide mining hardware to the community is taking up all my time, so I do not get to do all that I like. I enjoy mining.
Is there anything you would like to say that we have not touched on yet?
We have addressed so many different things the last few days. I am very happy to be here because we were able to see many people and from different parts of the industry because we are very focused on mining. We sometimes do not realize how big are the other sides of the industry. I think its a worthy system and I think it is drawing many smart people from many areas. I think this is moving forward, and some of them will disappear, and new ones will come to the game but the method of the start of understanding what we do is now. It has moved so much just the last nine months. I think the next nine months it will become more stable and predictable, and we will have fewer bad stories than we have in the past.
Juan has given me insight into Bitcoin Miner manufacturing, selling and so much more related. I like how he is very informed and plugged into Bitcoin, and it’s ecosystem. His unique view of things gave me new insights into many things. Some I am now writing new articles about. I hope you enjoyed the interview as much I did in doing the actual interview. I know this one is a long one yet he made important statements and insights that I did not feel I should leave out.
As I said earlier, I would elaborate on how he got me to go to the Inside Bitcoins Conference in NYC.
Juan Garavaglia had read several of my articles and had given me quotes for one, as well. As the IBCNYC got closer, he asked me if I was going to cover it. I had to tell him no as I could not afford it. I did not tell him at that point about my disability. He said I should be there, and I agreed but reminded him that I could not go. He then told me he would pay my way down there. He said I lived in NY State which would be fairly close, so therefor I should be there. I was so shocked at the offer and humbled, I did not know what to say for two days. With my disability, I am limited and knowing that my wife would be unable to accompany me to IBCNYC meant that I would have been alone. With unexpected falls and chronic pain, I rarely go anywhere alone. After two days, I finally got back to Juan and told him of my disability. He assured me I would not have to worry: He would make sure of it. So scared out of my mind, I said yes. I am glad I went. With his help, I was able to meet and interview not only Juan but Tyler Roye of eGifter, Matt and Dan from Minersource, Will O’Brien from BitGo, CCN’s own Paul Carrozzo and Alyssa Hertig, HolyScott from BitcoinTalk and many others. I have their interviews to follow this week, as well as others.
Juan kept an eye on me as promised and even though I was unable to attend the conference for large parts of each day due to my disability I was able to schedule my interviews for times I was able to go. He also wanted nothing in return not even this interview that I pestered him for the whole trip. That is a humbling experience.
Thank you Juan for showing me that the world of Bitcoin and Crypto Currencies is something more than just what I see on my computer screen. It is full of real people who are even more colorful and smart in person as they are on my screen.