The future of immersion cooling for mining equipment with tokenization.

Cryptocurrency mining remains a promising area. Every year, millions of dollars are invested in crypto mining. However, this niche has problems that become more and more serious with the higher complexity of mining. One such problem is equipment cooling. During the operation of the equipment, a lot of heat is generated, which must be somehow removed. One of the modern methods for this is immersion cooling.

Mining experts consider immersion cooling to be the future of cryptocurrency mining. However, the implementation of this technology requires investment. Attracting investments in traditional ways can be very difficult, so miners have to look for an alternative. Tokenization is one such alternative. Let's talk about what tokenization is and how it can help implement immersion cooling technologies.

How does immersion cooling work?

Traditionally, miners have used two methods of cooling. The first is coolers and air. However, this method is only suitable for low-power devices. For more powerful mining equipment, liquid cooling is used, but it also has its drawbacks and is not entirely suitable for mining. Therefore, miners were forced to look for better solutions such as immersion cooling. It is cooling with the help of special liquid dielectrics. These include:

• Mineral or synthetic oil.
• "Dry water."

Systems that use oil are called single-phase, while those with "dry water" are two-phase. Each of these methods has its advantages and disadvantages, but there are general advantages that can be distinguished for immersion cooling in general:

• Significant energy savings.
• Environmental friendliness. Less environmental pollution.
• Immersion systems do not accumulate dust.
• Uniform heat dissipation from all systems.
• The ability to safely increase hardware performance (for example, overclocking video cards).
• Compact dimensions of cooling systems.
• The low noise level in the room.
• Liquid immersion cooling systems can even be used to equip mining rigs in containers.

Immersion cooling has another essential feature, unlike conventional liquid cooling. Mining rigs with such systems can also work in winter in rooms with low temperatures because oil and "dry water" do not freeze. This avoids damage to the system, even if the room temperature is low for a while.

The main problems of mining companies when switching to immersion cooling

Immersion cooling is the future of mining. This technology is already beginning to be implemented, as it can make cryptocurrency mining more efficient and provide equipment protection. However, switching mining rigs to such a cooling system requires investments. And at this stage, many companies and private miners face problems.

The fundamental difficulty lies in that it is almost impossible to raise capital by traditional methods. Traditional investors are not ready to provide funding for mining companies. For example, it is complicated to get a loan from a bank or to coordinate investments with a prominent private investor.

In addition, an important factor is the lack of legislative regulation of cryptocurrencies and mining. In the absence of a unified regulation system of cryptocurrencies, attracting investment for mining becomes an almost unsolvable task.

A few years ago, ICOs were a popular method of raising funds in the cryptocurrency world until regulators paid attention to such fundraising. Today, in the case of raising investments for the purchase or modernization of mining equipment, this method cannot be used. During the ICO, companies can only issue utility tokens. With their help, investors can get certain benefits, such as a discount on some goods or services, but not part of the company's profits. Because of this, raising funds through ICO for mining centers is currently not legal.

What is tokenization?

Due to the inability to use traditional methods of raising funds, mining companies have limited options to obtain the necessary funds. However, there are still ways out. One of them is tokenization.

Tokenization is the process of transferring assets to the blockchain. In the process, security tokens are issued. Their key difference from utility tokens is that they are analogs of traditional shares and give token holders corresponding rights. In particular, security tokens allow investors to get the right to receive profit, share in the business, make decisions on the company's management, etc.

By participating in an STO (security token offering), an investor can receive real guarantees through smart contracts developed by the company. They are executed only if both parties to the transaction have fully fulfilled their obligations. At the same time, the company can include any conditions in smart contracts. For example, the right to receive dividends can only be given to those investors who have bought security tokens and own them as of a certain date – the day the dividends are paid.

Related: Why the best time to conduct tokenization is today?

What are the benefits of tokenization?

Asset tokenization is gradually gaining popularity in the world. This process is universal; it can be used for mining, real estate, oil, gas, etc. Moreover, tokenization allows you to get several important advantages, in particular:

• Legal guarantees. State regulators in many countries consider security tokens as securities. This provides legal guarantees for both the investor and the issuing company.
• Financing from retail investors. Tokenization provides a low threshold. The company can issue any number of tokens and set a low price for them so that private investors can participate in such STOs and buy as many tokens as they want. This opens up ample opportunities for raising capital.
• Opportunity to attract investors willing to take risks. Mining is a high-risk investment. Banks and institutional investors often invest in low or medium-risk assets. Private investors are more risk-averse, and they can invest by adding a high-risk asset with good prospects to their portfolio.

In addition, the use of security tokens allows mining companies to avoid traditional bureaucracy. The launch of an STO, including preparatory work and legal advice, takes 3-4 months.

Summary

Immersion cooling is a new technology that improves the efficiency and protection of mining equipment. However, switching to immersion cooling requires significant funds, which mining companies often do not have. Therefore, companies that want to develop and modernize mining rigs are looking for funding options.

Asset tokenization is one of the possible alternatives. Security tokens are actually equated to securities. The technology of smart contracts guarantees the fulfillment of obligations by both parties to the transaction. In addition, tokenization makes investments available for retail investors who cannot afford to invest a large amount of money in a high-risk asset. Tokenization is gradually developing, and experts predict a good future for this technology. Want to learn more about tokenization for mining businesses? Feel free to get in touch with us to sign up for a complimentary consultation with our experts!