Crypto mining firm Hive Blockchain sent a signal to the tech industry when it dropped “blockchain” from its namesake in July, opting to call itself Hive Digital Technologies and reflect its artificial intelligence foray.
The decision is part of a wider movement from crypto miners to pivot outside of digital currency mining, amid depressed crypto prices. January saw crypto mining firm Riot Blockchain rebrand to Riot Platforms while June saw crypto miner Applied Digital announce a $460 million deal to host AI cloud computing in its data center.
Since ETH mining ended in September 2022, $HIVE has been transforming its fleet of 38,000 Nvidia GPUs from miners into cloud infrastructure, marking the next stage of our evolution into a diversified data center operator.
Read the latest HIVE Newsletter: https://t.co/raHqwMMalv pic.twitter.com/tHkVuLMtyT— HIVE Digital Technologies (@HIVEDigitalTech) August 17, 2023
Speaking to Cointelegraph, Hive Digital Technologies CEO Aydin Kilic and Chairman Frank Holmes reiterated the company is still heavily involved in Bitcoin and crypto mining — despite the name change.
However, they now see two nascent sectors — blockchain and AI — as being almost symbiotic when it comes to Web3 development, with Kilic stating:
“Blockchain and AI can certainly co-exist — they're both pillars of Web3.”
Pointing to the key differences between Web2 and Web3, Kilic suggests that AI will be used to upgrade the user experience of Web3 over time.
“AI allows Web3 to be more adaptive. In Web2 you have all this metadata but you lose your privacy because all of the big Internet companies are secretly harvesting all this data for their profit,” said Kilic.
“With blockchain, you have all this privacy and can own your own data. But without that metadata, how will you have a curated web experience? So that's where the AI comes in to make it more adaptive and intuitive. It all works together,” he explained.
“Where AI will play a role, is where Metaverses and DAOs will play a role. All of Web3 is still in the early innings."
"Where these pillars of technology actually get applied in novel ways that are broadly adopted is yet to be seen," he added.
Ethereum taught valuable lessons
Hive Digital Technologies was the first ever publicly traded crypto mining company, building out its first Bitcoin mining center in 2014 and going public three years later in 2017.
Holmes attributed much of the company’s ability to jump into new technology from lessons learned from mining both Bitcoin (BTC) and Ether (ETH).
“Our mining operations were really enhanced because of Ethereum mining. And when you're mining Ethereum, it's not like driving a Jeep, you're driving a Porsche and you it's a much more sensitive piece of machinery. You need 2 to 1 workers that you have for an ASIC,” he said.
These lessons were crucial for learning how best to pivot and ensure they were capable of having a broad enough scope of both product and technical know-how to take advantage of emerging technologies, Holmes explained.
Related: Hive Blockchain revenue declines by 44% Y/Y despite overall mining production surge
Instead of buying purely mining-focused chips, the team at Hive made the more expensive decision to purchase chips that allowed for dual processing — meaning that the firm could be mining at the same time it offered high performance computing.
“One of the things we were concerned about was Ethereum transitioning to Proof of Stake from Proof of Work. Initially, we thought it was going to take longer, but we said, okay, we're going to buy Nvidia chips. And we made this decision almost 18 months ago to go down the path of building out our High Performance Center site along with it.”
Crypto still in focus
Kilic pointed out that the company is still focused on Bitcoin and crypto mining.
“Our Bitcoin per exahash per month is amongst the highest in the industry. At the moment we’re at four exahash and we’re currently targeting six exahash for Bitcoin mining by the end of December this year.”
"Gradually, decentralized trust will be accepted as a new and effective trust model. We have seen this evolution of understanding before – on the internet."
~Andreas Antonopoulos pic.twitter.com/BaeTztuWjS— HIVE Digital Technologies (@HIVEDigitalTech) August 17, 2023
Kilic also shared a detailed breakdown of how their 38,000-strong fleet of Nvidia GPUs are being used in day-to-day operations.
“Currently, 500 of them are doing either AI or HPC computing and the remaining 37,500 cards are still doing proof of work mining where they're mining altcoins using a profit switching algorithm that varies day by day. Essentially, we’re utilizing the GPU hash power to mine the most profitable coin every single day.” Kilic explained.
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