Coinmine

Coinmine, Inc. was a hardware startup founded in 2018 by Farbood Nivi and Justin Lambert, positioning itself to simplify the cryptocurrency mining process for everyday consumers. The company was based in West Hollywood, California, and attracted significant investment from notable entities in the crypto space, including Coinbase Ventures, Arrington XRP Capital, and M13 Company, raising a total of $4.5 million over two seed rounds.

The core of Coinmine's business was the Coinmine One, a physical device marketed as a 'plug-and-play' crypto miner. Resembling the size and aesthetic of a gaming console like a PlayStation or Xbox, the device was designed for users with minimal technical knowledge. The business model involved the sale of this hardware, which initially retailed for $799, and a 5% commission on all cryptocurrencies mined through the device. The setup was straightforward: users plugged the device into power, connected it to Wi-Fi, and used a companion mobile app (available on iOS and Android) to select which cryptocurrency to mine.

Farbood Nivi, the CEO and co-founder, had a background as a serial entrepreneur, having previously founded the ed-tech startup Grockit. His journey started with building computers in high school and later co-founding consumer software companies. This experience in consumer hardware and software was pivotal to Coinmine's mission of making complex crypto technology accessible to a broader audience. The other co-founder, Justin Lambert, served as an industrial designer for the company.

The Coinmine One operated on a proprietary operating system called MineOS, which allowed for over-the-air updates to improve efficiency, add support for new coins, and enhance hashrates. Initially, the device supported the mining of coins like Ethereum, Monero, Zcash, and Grin. While it could not directly mine Bitcoin due to hardware limitations, it featured a 'Bitcoin Mode' that would mine the most profitable altcoin at any given moment and convert the earnings into Bitcoin. This feature, however, came with a 5% mining fee and potential exchange fees. A key benefit highlighted was its low energy consumption, comparable to a gaming console, and its quiet operation, making it suitable for home use. The company also introduced a feature to earn interest on the crypto held in the Coinmine wallet.

Despite early traction and positive user feedback on its ease of use, Coinmine ceased operations on September 15, 2022. The shutdown coincided with the Ethereum network's upgrade, known as 'The Merge,' which shifted Ethereum from a proof-of-work to a proof-of-stake consensus mechanism, rendering GPU-based mining for that currency obsolete. The company announced that the Coinmine devices would no longer function, effectively becoming e-waste unless users could repurpose the internal components, such as the AMD RX 570 GPU, Intel Celeron CPU, and SSD. The closure was a notable casualty of the "crypto winter" that impacted the market.

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