The operator of a large cryptocurrency mine in South Carolina was initially a crypto skeptic.
When a pair of bitcoin miners first approached David Feingold, CEO of Greenville-based Broadstreet Private Equity, seeking investment, Feingold was nearly 60 years old and “a big naysayer,” he said.
But one of the miners laid out the business’s true potential, he said. Six months later, the miner began working with Feingold to establish what he now says is the largest dogecoin mining operation in the country – a conclusion he came to by comparing his firm’s financial information against that of the largest public altcoin miners.
Dogecoin is a cryptocurrency created in 2013, further popularized in 2021 by billionaire Elon Musk, who is a fan of the coin. Its name bears resemblance, too, to the Department of Government Efficiency, the special government office headed by Musk since President Donald Trump returned to the White House on Jan. 20.
Six months ago, dogecoin was valued at $0.09. Following the election, it jumped to $0.46, though it has since steadily declined to its current value of $0.20.
While crypto mining is just part of Broadstreet’s overall business, which largely relates to real estate, the mining business has experienced “spectacular growth” since he launched it three years ago, and he’s “really proud of that.”
Feingold sat down with Banking Dive to discuss the ins and outs of running a crypto mine, and to discuss what changes his business can expect during the Trump administration.
Editor’s note: This interview was edited for brevity and clarity.
BANKING DIVE: What are the primary business challenges of owning and running a crypto mine?
DAVID FEINGOLD: It’s important that we minimize risk. That means each day that we mine coins, we're converting them to USDC, which is a stablecoin.
Each day people take the risk of holding altcoins, and it's extraordinarily volatile. You can see all your profits evaporate fairly quickly if there's increased volatility in the market. You have to have a really good business plan and stick to it, and that's our business plan. A lot of people will say, “You guys started mining when dogecoin was 6 cents, it's now 40 cents. If you held on to all those coins, you would have 70 times your money.”
There is truth to that, but we like to have a very conservative, stable business plan, where we convert every day. We know what we've made each day.
Number two, you have to have the manufacturing capability to have the specialized machines that we have to generate the profit margins we do. If you were to buy a crypto machine off the shelf, the computing power that you would buy is not competitive with our computing power, and therefore you're not going to generate nearly the amount of money, nor will you likely be able to have any kind of substantial profits in it, even if you scale and add in a lot of machines.
The components of our machines come from three different countries. We have to assemble them, and we have to bring them into the United States in a manner that's both tax efficient and tariff efficient.
What sort of manpower is needed to run a mining operation of your size?
Right now, we're at around 16,000 machines. Every day, you wake up and there's an issue with a machine, or there's an issue with the cooling system, so it takes a lot of people involved to maintain operations. It's a very labor-intensive operation.
Even just bringing machines in, unpacking them and putting them in racks takes several hours per machine. At 16,000 machines times several hours per machine, you're talking about 50- to 60,000 man hours, unpacked and operating. It's a lot of work.
Where do the coins go after they’ve been mined?
A very reliable counterparty converts them to stablecoins. The dogecoins – it’s almost no different than when you go to the supermarket, and you give them $1. You don’t know where your dollar is going after the cashier accepts it, right? But it goes into circulation. It’s the same principle.
How do you expect the new presidential administration to change crypto mining?
The new administration is embracing mining. By advising regulators to reduce their negative bias to crypto, this positive position is now making banks, counterparties and financial institutions more comfortable doing business with miners.
Has the Department of Government Efficiency affected the popularity of dogecoin in any meaningful way?
Since DOGE [the agency] has come into existence and the progress it is making in changing the government, it seems to be seen as a positive for the word doge. Hence, any positive news around the word doge seems to translate into positive support for the dogecoin.
