The blockchain hashrate is directly correlated with network security. As a Proof-of-work blockchain, Alephium relies on active ecosystem actors to sustain and improve Alephium’s reliability. This series is about them, and after Nicehash and Goldshell, please welcome CryptoHall 24.
Here, Frederick shares his crypto journey, and how CryptoHall24 came to be. Here’s the full video interview. If you prefer reading, find the full (slightly edited) transcript below.
This is the first video interview in our Hashrate series, which is usually in written format. A few months ago, you interviewed Maud, and it was an enjoyable experience for everyone. So, welcome again.
Thank you!
We loved that interview, but I’m the one asking questions today! 😉 Let’s start by getting to know you. Can you tell us a bit about yourself?
Yes, I’m Frederick. I’ll be 30 in two weeks, so I’m hitting the big 3–0 soon. I’m already losing hair, and it’s turning grey, so there’s that. I’m from Germany, near Düsseldorf, where my company, Cryptohall24, is based. We are a crypto mining hardware and hosting supplier, meaning we sell crypto mining equipment and offer hosting services for our clients.
That’s not a typical job for a 30-year-old in Düsseldorf! I imagine you don’t have many competitors around. Can you tell us more about CryptoHall 24 — when and how it was founded, and how you got into this industry?
CryptoHall 24 is actually my second company. I also run another company called MyShoeFitter. In collaboration with the Fraunhofer Institute, we developed an AI model in 2019 to measure feet using pictures. The idea was to help people find the perfect shoe size when shopping online by comparing foot measurements with the shoe’s internal dimensions.
The Fraunhofer Institute, where MP3 was invented, right?
Yes, correct. The project was mainly developed during the COVID pandemic, but it faced delays due to the lockdowns, which affected our work with the Fraunhofer Institute. During that time, I became a father and needed to find a way to support my family. After exploring various options, I discovered crypto trading, which was stressful and not for me. Then, I stumbled upon a YouTube video by German YouTuber Thorben Platzer about crypto mining. The idea of having a computer work for you while you do minimal maintenance was fascinating to me, and that’s how I got into it.
So, you started with mining, but what made you transition to building a company like CryptoHall 24?
It all started with building GPU mining rigs for myself, then for friends and family. Eventually, it escalated, and I founded CryptoHall 24. Now, we are a significant player in the retail mining business.
That’s impressive. Many people dabble in mining but stop there. You’ve managed to turn it into a thriving business. So, to clarify, your main activities are selling miners, hosting miners, and servicing miners, correct?
Yes, that’s right. We also provide consulting services. One of our key strengths is offering detailed consultations, which sets us apart from other companies. We want to ensure our customers are profitable because our business depends on their success.
Most people have little knowledge of the crypto mining industry. How big is the industry in Europe, and how does it compare to other regions?
The main market is in the US, with significant activities also in Russia. Europe is still very niche due to high energy prices, which make mining less profitable here. However, there are many crypto enthusiasts in Europe, and with the right information, the market could grow, especially with companies like ours offering hosting services.
You’ve been in this business for nearly four years and have seen various market cycles. One of the major discussions has been the shift from proof of work to proof of stake. What are your thoughts on this, and why are you still investing in proof of work?
The crypto space is still very young, with a lot of experimentation. I believe Bitcoin will always remain number one, but there’s room for others. Proof of work offers the best decentralization and security, which are core principles of crypto. Proof of stake is more centralized, which goes against the decentralized nature of crypto. There are interesting hybrid solutions, like Alephium, which combine different consensus mechanisms. I think there’s a future for proof of work.
Speaking of hybrid solutions, there’s a trend towards combining different consensus mechanisms. How do you see this impacting the future of the industry?
Hybridization is definitely a trend. Many projects are experimenting with combining proof of work and proof of stake, or other mechanisms. As a miner, my hope is that proof of work will never die, and I believe it won’t, especially with Bitcoin.
As a miner, you have to make big investments in equipment and energy. What trends do you foresee in the mining market over the next two to three years?
One concern is the centralization of hash power. As more miners join the network, profitability decreases. Large-scale miners with low electricity costs and efficient operations will remain profitable, but smaller miners and home miners may struggle. There’s definitely a trend towards centralization in hash power, which could be a risk for the network.
Does this centralization pose a risk to the network in terms of regulation or potential capture?
Yes, it could be a risk, not just for Bitcoin but for other networks like Alephium as well. If one player acquires a large portion of the network’s hash power, it could centralize control, which is against the decentralized nature of crypto.
It’s interesting to see the ASICs coming on board for Alephium. How typical is it to see multiple producers entering a new chain simultaneously, and what impact does this have?
It’s a strong signal of trust in the network. When major manufacturers like Bitmain invest in producing ASIC miners for a network, it shows they believe in its future. This milestone helps the project evolve and gain credibility.
Your clients likely range from Bitcoin maxis to those more open to experimenting with new coins. How do you cater to these different types of customers?
Our customers’ intentions vary. Some are Bitcoin maxis who only want to mine Bitcoin, while others are focused on profitability and are willing to mine whatever is most profitable at the moment. We also have clients interested in new projects like Alephium. We try to educate our clients on the different options and potential risks, but ultimately, the decision is theirs.
With Alephium, miners have the unique option of using their mined ALPH in DeFi for additional yield. How does this impact the way miners think about their operations?
It increases the potential for profitability because more activity on the chain generally leads to a higher coin price. This makes mining more predictable and potentially more lucrative, especially with Alephium being a relatively new project with a lot of potential.
How did you first discover Alephium?
I discovered Alephium at the World Digital Mining Summit in Oman, where I met Maud. After learning about the project’s advantages, I did some research and saw its potential.
You mentioned having a team of 11 people. How do you manage the different types of clients, from home miners to large-scale professionals?
We don’t do shared ownership of machines because it’s too complex to manage. Our approach to clients is similar, whether they are home miners or professionals — they’re just operating on different scales. We spend a lot of time educating our clients about network hash rates, emission schedules, and coin price cycles to ensure they make informed decisions.
What unique challenges do you face as a crypto mining business in Europe, and how do you overcome them?
Europe presents some unique challenges, particularly with regard to high energy costs and regulatory uncertainty. To overcome these, we offer hosting services in regions with more favorable conditions, allowing our clients to benefit from lower energy prices. We also stay informed about regulatory changes and adapt our operations accordingly. By offering consulting services, we help our clients navigate these challenges and make informed decisions that align with their specific circumstances.
With the rise of environmentally conscious initiatives, how does CryptoHall 24 address the energy consumption concerns associated with crypto mining?
Energy consumption is a significant concern, especially in regions like Europe where energy prices are high and environmental regulations are strict. At CryptoHall 24, we are committed to promoting sustainable mining practices. This includes optimizing the efficiency of our hardware, exploring renewable energy sources for our hosting services, and educating our clients on how to minimize their environmental impact. We believe that as the industry evolves, there will be more opportunities to adopt greener technologies and practices that can help mitigate the environmental impact of mining.
What’s your favorite part of the job?
The crypto space is dynamic, young, and innovative. Unlike the fashion industry, which I’ve also worked in, the crypto community is down-to-earth and appreciative. Our customers are always happy because we help them earn money, so that’s very rewarding.
What’s the next step for CryptoHall 24?
We’re looking to expand internationally. Currently, our main market is the German-speaking region, but there’s a lot of potential across Europe. We’re also working on increasing our hosting capacity, which is a complex task due to the infrastructure required for large-scale mining.
Thanks for your time. Any final thoughts before we wrap up?
If you’re interested in Alephium or crypto mining in general, I highly encourage you to get involved. Whether it’s setting up a small home miner or investing in larger ASICs, the experience is not only rewarding financially but also provides a deeper understanding of the blockchain space. And, of course, if you need any hardware or hosting services, feel free to contact us at CryptoHall 24.
Twitter & other socials links: https://x.com/cryptohall24,
Website: https://www.cryptohall24.com/en
That is the end of this interview! If you are interested or have extra questions, you are welcome to reach out on our Discord, or in the Alephium Telegram channel. Don’t forget to follow @alephium on Twitter to stay up-to-date.