CoinTerra Cashes in on Bitcoin Mining Craze

By Leslie Anne Jones
Reporter with Silicon Hills News

 Ravi Iyengar Founder & CEO of CoinTerra


Ravi Iyengar
Founder & CEO of Cointerra

When there’s a gold rush on, it’s sometimes the shovel sellers who get rich fastest. On January 27, CoinTerra started shipping the world’s most efficient shovel for mining Bitcoin: the TerraMiner IV, a networked ASIC Bitcoin miner which, at $5,999, is presently the lowest price-for-performance model on the market.

Rated Austin’s fastest-growing startup in December by Mattermark, CoinTerra is less than a year old and did $35 million in sales in the five months since announcing its first product. The TerraMiner IV is sold out through April and the company is currently taking orders for May. Founder Ravi Iyengar says they will likely announce new Bitcoin mining products in coming weeks.

A bit of background for those who find cryptocurrency rather cryptic: Bitcoin is the frontrunner among dozens of decentralized peer-to-peer value transfer systems (including but not limited to Litecoin, Peercoin, DogeCoin, Kittehcoin and BBQcoin). Bitcoin’s current market capitalization is more than $10 billion, where every other alternative is less than $1 billion.

Introduced in 2009, Bitcoin is based on a cryptographic algorithm. It was created by an anonymous person (or perhaps group) known only as Satoshi Nakamoto. There will only ever be 21 million bitcoins in circulation, and presently there are only about 12 million. Bitcoins are released in blocks about every 10 minutes. A miner can obtain bitcoins by having his computer solve complex math problems in order to uncover the blocks and also to record transactions, for which the miner earns a fee. When Bitcoin was first introduced, this could be done on a personal computer, but Bitcoin is designed so the algorithmic problem solving (“mining”) becomes increasingly difficult over time. Today, a many thousand times more powerful system like CoinTerra’s is necessary to effectively mine Bitcoin.

This time last year, Iyengar was happily employed as a lead CPU architect at Samsung where he worked on next-generation mobile hardware. Last March, two people from the Bay Area contacted him over LinkedIn and asked him to head up their engineering team for a mining system. They offered half a million in base pay. Later, two Belgians approached him about cofounding a similar company. Iyengar asked them to invest in him instead.

“I decided to do it myself,” Iyengar said. CoinTerra was incorporated on May 15, 2013.

Iyengar and his wife were about to close on a house, but they couldn’t get their loan approved once he quit Samsung. “My wife was so bummed. It took a few weeks before she would talk nicely to me,” he recalled.

For the first five months, Iyengar didn’t pay himself anything. He received his first investors in June and raised $1.9 million between then and October. It took seven months to go from concept and product, and CoinTerra partnered with Open Silicon for the TerraMiner’s physical design and with AES for the system design. The boxes are manufactured at an undisclosed location in central Texas.

“We accelerated every part of this product,” Iyengar said. “We threw expediting money at everything.”

The finished product is a self-contained system that just needs to be plugged in and installed to start mining. “Your grandmother could do it,” Iyengar said, though most of his clients are men – home enthusiasts, mostly between ages 20-40, a tech background is common among miners. CoinTerra has some bulk customers too, but Iyengar said they plan to concentrate on retail.

CoinTerra's TerraMiner IV

CoinTerra’s TerraMiner IV

Presently, Iyengar doesn’t mine. He says he wants to take care of the customer backlog before he gets his own TerraMiner. However, some staff are engaged in other kinds of cryptocurrency mining: CoinTerra’s 24-year-old business development manager Stephen Henry keeps a warehouse in eastern Washington (cheap electricity) filled with computer hardware that mines various digital currencies around the clock. He doesn’t convert any of it to dollars though, “I believe in increasing stores of wealth based on technological innovation,” Henry said of his venture.

CoinTerra’s first local customer to pick up a unit was computer programmer Jake Gostylo. Gostylo first started mining on a more basic system with friends back in 2011. They cashed whatever they mined out immediately, and he estimates they made $15,000 before power and hardware costs. They had to give up that system when the algorithm became too difficult and power intensive to make it worthwhile. In the eight days since he and his friends received their TerraMiner IV, Gostylo said they mined 3 bitcoins, an equivalent of $2,400.

“I don’t doubt that we will be making our money back and then some very shortly,” Gostylo said. However, they aren’t going to exchange for dollars right away anymore, they’re keeping it in bitcoin now: “We’re hoping for the strength of the bitcoin economy to increase as well and the coins we have now will be worth more.”

Comments

  1. Don’t be so proud of the prodigy son of silicon valley as IT ISN’T the most efficient product on the market,
    Cointerra totally underdelivered on efficiency, 20% less on power calc. & 20% more on energy consuming of the specification that were set on product sales.

  2. Poor customer service, poor product, nightmare. Beware of this company. I will not be buying again.

  3. “$35 million” of customers money and has not delivered on his promises
    December batch customers are still waiting on their machines. nowhere near delivering Jan batch.
    I am still waiting on Dec and Jan batch. he has screwed his customers and pocketed the “$35 million” giving 15% discount on your next machine is a joke. I will not be ordering from this cowboy again

    hang your head in shame!!! Ravi Iyengar

  4. Wasted Technology says:

    Wow! Lets spend our engineering resources and throw millions of dollars to create electronic “Flamethrowers” designed to waste our precious electricity and the natural resources required to generate said electricity, all for what? To “mine” for an artificial currency all the while wasting those computing resources which could have been put to use solving a real world application or problem. Talk about profiteering on technology that does no good to humankind and even hurts it by consuming precious energy. This is a true pyramid scheme – people always want to make “money” without having to do work! This sorry excuse for an engineer is at the top selling his wasteful hardware to people who then “timeshare” the machine out in cycles to multiple paying users, who eventually get a virtual currency that will surely one day collapse on itself when people realize there is absolutely nothing to back it. Hey, alot like the other world currencies, except there are zero mechanisms to protect/insure the ultimate victims when the value evaporates. This is my definition of “Engineering Evil” and I would not go to work for a company like this regardless of the offer.

  5. do you mind if I post this on twitter?

  6. EXTREMELY BAD IDEA to do business with CoinTerra.

    I sent them $12,200 and have yet to receive confirmation of my order. CANNOT get anyone to answer the phone, nor return my calls. When I submit a support ticket, I get the canned response. but no answers what so ever.

    Certainly feel like I’ve been ripped off by a professional.

  7. bitcoinminer says:

    One has to consider after sales support too. After receiving a dozen Cointerra miners, 2 had problems. It’s been 2 months and countless emails and still have no resolution. One machine was sent back for repairs and has been lost twice along the way. Still don’t know where it is. The other I am running at half capacity because they cannot get their act together. Its a clusterf%$&k

  8. There’s definately a lot to learn about this topic. I like all the points you made.

  9. who don

  10. paul Murray says:

    BUYER BEWARE… Do not order from this scam company. They still owe me $6500 and sent out a dodgy cheque that bounced. Which cost me even more in bank charges. What a scam. Give me my money cointerra

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