S16 E15: Marko Tarman on NiceHash & Proof of Work Mining

Marko Tarman started mining Bitcoin in 2012 and hasn’t stopped hashing ever since. He’s witnessed the transition from graphics cards to FPGAs and then ASICs, he’s seen many companies and pools come and go, but ultimately he was there to observe the quick evolution from hobbyist mining to big business.

Today, Marko Tarman is the Lead Mining Manager at NiceHash – a company which specializes in renting and commodifying hash rate, which opens up a convenient marketplace for people who produce hashes and seek to sell them to the highest bidder. The beauty of NiceHash has always been the automation of mining – the average video gamer who owns a powerful GPU can choose to put his machine to work a few hours a day, so he can receive BTC payments. In the background, this hobbyist miner will most likely be securing another chain such as Ethereum Classic, Beam MimbleWimble, Firo, Zano, Kaspa, or Alephium. But the chain gets picked automatically based on the existing supply-demand dynamics, in order to maximize the profits of the hashrate provider. And the BTC payments can even get sent via Lightning Network, as NiceHash owns one of the most popular and liquid nodes.

In this episode, Marko Tarman makes use of his extensive experience in order to talk about current trends in Proof of Work mining and try to predict the future of the industry. Though the projections might seem a little gloomy in the era of Proof of Stake DeFi, there’s still enough experimentation in the world of Proof of Work to keep the markets interesting. However, Bitcoin mining is already in its industrial phase and most likely will never revert to hobbyists using their home rigs.

We also talk about regulations in the European Union – especially MiCA, which accelerated NiceHash’s decision to move out of Slovenia. The company recently relocated to Switzerland in order to function just like before. On the other hand, the NiceHash Pay service had to be put on hold until further regulatory clarity.

Towards the end of our conversation, Marko also reveals a new partnership between NiceHash and M2. Now miners will be able to access loans which allow them to hold their coins over longer periods of time, thus offloading the pressure to sell the rewards in order to pay the bills. This type of deal should definitely impact markets, as fewer miners will sell their coins out of immediate necessity.

Listen to Marko Tarman on YouTube, Spotify, Apple Podcasts, Twitter/X, and More!

This episode is sponsored by Sideshift, LayerTwo Labs, Citrea, Bitcoin.com News, NoOnes.com & HODLing.ch

Time stamps:

Introduction to NiceHash (00:01:16)

Role of Lead Mining Manager (00:02:11)

Mining Popularity and Trends (00:02:52)

Mining Algorithms and Projects (00:03:40)

Profitability in Mining (00:03:57)

NiceHash Marketplace Functionality (00:06:03)

Profit Switching Mechanisms (00:07:44)

Impact of Mining Dynamics (00:09:49)

NiceHash’s Role in Mining (00:10:39)

Understanding NiceHashable (00:14:12)

51% Attack Explained (00:15:05)

Mining Algorithms Supported by NiceHash (00:18:08)

NiceHash as a Marketplace (00:19:19)

ASIC Boost vs. SHA-256 (00:20:32)

Advantages of Using NiceHash (00:22:00)

Bitcoin Payouts for Miners (00:24:45)

Popular Mining Algorithms (00:27:08)

Proof of Stake Is Proof of Shit (00:28:52)

Proof of Work vs. Proof of Stake (00:29:01)

Impact on Hobbyist Miners (00:29:31)

Fairness of Mining Distribution (00:30:43)

Regulatory Concerns (00:30:56)

Developer Security in Mining (00:31:39)

Algorithm Development (00:32:00)

Ethereum Classic’s Hash Rate (00:32:53)

Mining Profitability Insights (00:34:15)

SideShift & bitcoin.com News (00:34:47)

Historical Mining Profitability (00:37:07)

Sustainability of Mining Model (00:37:26)

Intimidation of New Miners (00:40:00)

Early Mining Experiences (00:41:59)

ASIC Mining Challenges (00:44:18)

Regulation in Mining Industry (00:46:35)

Competition Among ASIC Manufacturers (00:48:20)

NVIDIA’s Focus on GPUs (00:51:29)

GPU Mining History (00:52:56)

Current GPU Prices (00:56:01)

Chip Shortage and GPU Prices (00:56:45)

GPU Mining and Hash Rate Utilization (00:57:17)

Decline in GPU Mining Profitability (00:58:11)

Future of Proof of Work (00:58:44)

Home Mining Resurgence (01:00:59)

Evolving Mining Algorithms (01:02:41)

ASIC Mining Algorithms and Risks (01:03:03)

NiceHash Payment Processing Features (01:05:10)

Lightning Network and Compliance Issues (01:09:22)

Mining Profitability and Market Dynamics (01:12:55)

NiceHash’s Innovations (01:13:44)

Hash Rate Marketplace Differences (01:15:44)

Bitcoin Blocks Mined (01:17:05)

Buyers of Hash Rate (01:19:25)

Buyers of Hash Rate (01:24:26)

Competition for NiceHash (01:25:13)

Complexity of NiceHash Services (01:26:39)

NiceHash Product Offerings (01:27:01)

Future of NiceHash (01:31:16)

Regulation in Mining (01:32:04)

Trends in Mining (01:34:37)

Concerns About Mining Centralization (01:36:11)

Evolution of Mining (01:38:31)

Hope for Decentralized Mining (01:39:39)

Future of Proof of Work (01:41:30)

Quantum Computing Threat (01:43:47)

Adaptation of NiceHash (01:47:57)

Staking Pools Discussion (01:48:11)

Marco’s Future Plans (01:49:02)

Merchandise and Community Engagement (01:50:18)

Final Thoughts and Contact Information (01:52:34)

Partnership Announcement with M2 (01:53:50)

Hash Rate as Collateral (01:54:34)

The Short-lived Commodity (01:55:03)

Access to Loans (01:55:54)

Game Changer for Miners (01:56:11)

Repaying Loans with Hash Rate (01:56:25)