Tomasz Wojewoda believes the cryptocurrency industry is still in a relatively early stage of evolution. As the founder and CEO of AGA, a DeFi Bitcoin mining protocol that relies on AGA Token for its governance and AGAr Token for monthly rewards, he has developed a unique perspective on the space. In an interview with Gokhshtein Media, Wojewoda offers his insights on emerging crypto developments and what they might mean for investors.
How long have you been involved in crypto? When and why did you launch a company?
I have always been interested in emerging technologies and have loved experimenting with Blockchain and mining. We started mining Bitcoin and other cryptocurrencies in 2017 and in 2020 decided to go all in. That is how AGA was born in August 2020.
What problem(s) does your startup solve?
A common issue with cryptocurrencies is that after their ICO’s they no longer have consistent funding for their business and marketing campaigns. AGA’s mining operation delivers over $150K in monthly revenue with mining profits funding AGA Token monthly rewards and buy-backs. AGA token sales then fund expansions in our mining operations. Ultimately this organically creates a positive feedback loop in revenue and token appreciation.
What’s the difference in Bitcoin mining in the early days of 2016-2017 and in 2021?
In the early days of Bitcoin mining, people could mine with their personal PCs or even laptops. This has changed significantly in 2021 in three ways.
The first is that mining difficulty has increased. As more people learned and got interested in Bitcoin mining, more people began to participate and contribute their hashpower to the network. An increased amount of hashpower on the network increases mining difficulty because the Bitcoin algorithm is built to increase or decrease complexity every 2016 blocks that are mined. Therefore, if more people contribute their hashrate to the network, the Bitcoin algorithm will increase its complexity every 2016 blocks. This results in people having to use more and more hashpower in order to get rewards.
The second reason Bitcoin mining has changed significantly from 2016 to 2021 is due to the Bitcoin halving. The Bitcoin halving cuts block rewards in half every 210,000 blocks that are mined. This results in lower and lower profitability over time. To compensate for this, miners either have to buy more hardware to keep their profitability up, or they have to weather a decrease in mining profitability.
The third reason Bitcoin mining has changed significantly from 2016 to 2021 is the development of ASIC miners. In the past, people could mine for Bitcoin using a laptop or old gaming PCs. However, people have developed specific hardware for the mining of Bitcoin making it virtually impossible for laptops and gaming PCs to compete against ASIC miners. Almost all of the Bitcoin blocks are mined with ASIC miners now.
So can anyone start mining Bitcoin on their own?
Anyone can become a miner. However it will require a great deal of patience and capital. Like anything you need the patience to learn new tricks of the trade. You also need capital in order to buy the increasingly expensive mining equipment on the market. Especially as mining becomes more popular, the price for equipment will increase making ROI a bit harder.
What else is needed to start a Bitcoin mining business?
When it comes to Bitcoin mining, you need a little more than just capital and patience. Although both patience and capital are still important, you also need a vision, a team, and a community to help you build your company. Doing anything on a large scale alone is difficult. However, with the right support anything is possible.
AGA is fortunate to have an amazing community, partners, and team that help us get better each and every day. Their efforts make it easy to stay on top of the market and capitalize on business opportunities others may miss.
What trends do you see in DeFi?
Right now the largest trend in the DeFi space has to do with L2 solutions. Most of DeFi is on Ethereum right now. With gas fees being so high on the Ethereum blockchain, the barrier to entry in the DeFi space is increasingly steep. This is resulting in a lot of the potential DeFi market having to take a back seat until this problem is solved.
Fortunately, several companies are working with L2 solutions with the goal of reducing gas fees for retail investors wanting to get into the space. At AGA, we recently partnered and bridged our tokens with Polygon in order to allow our investors to buy and trade AGA at virtual no cost. With the help of L2 solution companies like Polygon and DEXes like QuickSwap, DeFi is ready to explode in these spaces.
What About Mining?
When it comes to mining, the most profitable and well known cryptocurrencies to mine are Bitcoin and Ethereum. As the price of Bitcoin and Ethereum has increased over the course of the last half year, mining interests have skyrocketed making equipment prices extremely expensive. Furthermore, with the release of EIP-1559 in July, GPU mining on Ethereum will become less profitable.
The GPU mining space may experience some precarity in the near future. Fortunately for AGA, we were able to purchase ASIC miners prior to the exponential increase in hardware costs. Furthermore, our partnerships allow us to purchase Bitcoin ASIC miners at low costs in bulk.
What advantages and disadvantages for retail investors do you see in the current market situation?
As a retail investor, the largest disadvantages right now are the high Ethereum gas fees. People have found themselves trying to invest $50 USD into Ethereum only to discover that they have to pay $30 USD in gas fees. Fortunately, many companies like Polygon are providing L2 solutions for various DeFi companies.
We are recognizing this and partnering with L2 solutions like Polygon in order to offer investors a solution to such high fees.
Finally, what are the best options that retail investors find now?
Our recommendation for retail investors who want to get into crypto is to look to L2 solutions to minimize gas fees. Until Ethereum 2.0 is launched and Optimization is implemented, the best strategy is likely to use L2 solutions for your investing.
The good news for retail investors right now is that the crypto space is still in its infancy. Because we are still early in the investment world there are still lots of opportunities for large rewards as crypto and blockchain technology become more widely adopted.
Note: Trading and investing in digital assets is speculative and can be high risk. Based on the rapidly changing business and regulatory environment of this nascent industry, this content should not be viewed as investment or legal advice.