Topic: Interested in Mining, doing due diligence, have some hardware questions. (Read 456 times)

The best way to get a real asic miner is buying from official websites only, third-party websites or store consists of fake hash rates on some asic miners like OP said, to consider a asic miner today you have to take note about for cost of electricity, this is the most important part of mining, I also recommend buying a particular miner few weeks or months after released, the newer they are they longer they last, obsolete happens fast with asic

Yeah, I've checked them out and others. The costs come out to 8c kWh to 8.5c kWh when you figure shipping and setup costs per unit etc, etc. That must mean that around 8c kWh is about the 'least' amount you can get walking in off the street. I might get more of a break if I sent the guy like 10 ASIC units of whatever flavor, but alas, can't really do that, don't ya know. Now I know of 'some' folks on bitcointalk and litecointalk that get like 4-6c kWh but they are kinda 'grandfathered' in and just plain are not looking to host anyone outside of the group of folks either known to those running the data hall or again, big enough. Also, you add the cost of say Bitmain equipment even if you could get such, in a timely manner or any other ASIC miner of any Algo flavor...and even the risk of buying one say Bitmain unit, even if you got it today, just don't cut it at 8c kWh. Thus the overseas angle. Actually on 2nd thought, love America, but with 2020 and the last 4 years of the Trump Administration getting kinda sick of Americans.. I should just move overseas....anyone got a 'sister'.....

But yeah, it is frustrating when I can make more just selling stuff I'll never use out of my attic on eBay and convert to Bitcoin and make a lot more money than I ever could now at my home rate of 13.85c kWh Residential now. I currently can jump in again anytime at 8c kWh with a data hall I do know in the The USA, but with current equipment not available of any ASIC flavor till what Summer of 2021 and dubious equipment used....not worth the hassle..that is unless you are one of the 'wise few' in the USA that did some Solar, back in the day with grandfathered in benefits, now dismantled under the Trump Administration. Truly been 'gutted' in my state indeed. Currently, I know solar operators with local cities and counties? contracts where the city is telling them they will only pay 8c kWh vs the grandfathered agreement of current rates from 5-7 years ago with Solar subsidies...that was set in contract..they should be getting a base rate of now 13.85c kWh. Cities and counties are getting desperate with no tax revenue coming in with the USA recession and covid-19 pandemic. I'd expect 'more' of this pushback around the USA on grandfathered in Solar operations. So anyway, would love to mine 'Solar' but unless pushback by Biden Administration on such things back to 5-7 years ago (doubtful) that boat don't float...it used to be you could 'mine' solar for a profit and pay off solar in like 10-12 years alone, ASIC mining you could push that up to say 8 years payback. No more of that in my area.

So it goes, probably the same complaints were made by miners when they had to 1) upgrade from their laptop 2) upgrade to GPU 3) upgrade to ASIC etc, etc.  

Brad

I see blackware solutions on telegram mining groups offering hosting/colocation services all the time, in the groups where I am most active, I always see Mason (one of their founders) and he is trusted by the community, we talked a few times and he seems nice and serious, and most importantly (to you at least) is that they are located in the U.S, so you could probably pay them a visit and check their hosting facilities and all that, I am not sure about their terms and prices and all that but they are the only once I could think of, you could also reach out to Scott and Kaboomracks, they are large scale resellers, both post in the market place/hardware section and both are located in the U.S so they likely know more about hosting services in the U.S than most of us, there are other people outside of the U.S that offer hosting services, but that comes with a great risk which you seem to be fully aware of.

I'm getting around to my question below...but first IMHO, mining in the Midwest USA and such is pretty much over. 8c kWh is the best rate I can find in the upper midwest when you consider it covers everything. Setup/Tweaking, hell, they will probably even provide you with a Bitmain 220v PSU for free.  My average residential rate this winter (just got it) Xcell is 13.85c kWh. Well, You can't mine around here!

So my question is, the only place to mine is to do so overseas someplace. Canada I've looked at but again all the bells/whistles I've seen 8c kWh is the best I've seen and that doesn't cut it. Has anyone had any 'legit' long term and you can trust the particular data hall overseas kind of history that you can tell us about? All I hear about is the usual 9 out of 10 horror stories of your BTC/Equip/or whatever up and disappearing at night! Or is there no such possiblity as such being rarer than BTC/Crypto Unicorns?

Also, people say to 'cloud mine' but frankly I've never seen a real 'trustworthy' cloud mining setup when the BTC/Crypto price tanks..you as the customer simply eat such costs from what I understand. Also, from the figures on setup/shipping/VAT and the rest I've never seen a 'supposed' on checking 'cloud mining' operation that beat 8c kWh anyway..and I know that doesn't work for me these days. Not that I ever went with any, but just doing the 'math' just because.

So again, is there any mining operations (full or not..) that just want to know if such 'exists' or 'existed' overseas where it would actually make any sense to buy 'someday' Bitcoin/Crypto equipment and have it go directly to the data hall there? Is there NO historical info on such stuff, even if it has been a 'closed' group for years? I 'know' I did this in this manner at the 'later' years of BTC/Crypto mining myself, in USA data halls across state lines. I also looked into Canada (again never better than 8c kWh with fees/setup/shipping/vat etc)...for hosting they likely were legit as well.

So hardware wise and data hall wise overseas and mining in 'due diligence' is this even remotely possible anymore?  Direct Ship around USA tariff to say a 'trusted' data hall in China say,..direct from Bitmain say? I'd at least think fail/pass/win someone would have least tried such, dubious though it still maybe? Asking. I suspect not without a trusted friend or family member in the particular country to run interference..but figured I'd ask on this thread for the hell of it. Perhaps this too like Midwest USA data halls and mining and home mining, has gone the way of the DoDo Bird. But hey, someone here must have had at least one 'dubious' overseas relative they talked into doing this fail/win?

Brad

The bold part is pretty much the summary of my previous post, I went into great detail to explain how inaccurate those mining profitability calculators are when used to estimate the future outcome, there isn't anything they can do since the future is unknown, but you as someone who is studying a business plan should consider the unseen and the unknown.


Of course, they do, but they only take the current difficulty which could be much different an hour later (assuming we are about to adjust to a new difficulty target), the longest period for these calculators to be accurate would be 2015 blocks or about 2 weeks, if you happen to use them at block 1 of any given epoch, the result they show will be 100% accurate for 2015 blocks, they can't be any more accurate future wise.

Mikey I appreciate the detail and the time you took to answer and explain.  I have read about the difficulty changing, and as you see, I didn't incorporate that into this thought process - I had forgotten about it, and even now I"m not sure how one could calculate that.  But what I think I'm hearing you say, is that if I run those numbers through the mining calculator today, and the same numbers again say 6 months from now, it will tell me a lower mined coin figure, is that a simple understanding of it?  I believe those calculators take the live data of bitcoin price into consideration, do you know if they factor in the difficulty as well? 

I've read things that influence the difficulty, but certainly do not fully understand it.  That is good food for thought. And like I alluded to in my last post, I am now leaning towards the GPU/AltCoin mining, but obviously not right now as there is not much hardware available and the prices are elevated.  However, I do want to build a good plan (I will discuss in the other forum so I don't get in trouble here), and have money set aside for when the conditions are right.  I'm not in a rush to do anything now - hasty decisions can be bad, just like the luck can be bad.  I am trying to soak up knowledge first so that I can make an informed decision when I'm ready.

I even spoke to my accountant today about how to mange this for dealing with the IRS come tax time.  She now has some research to do on her end, because this is a new field that none of her present clients are involved in.  I want to understand the entire sphere of information as best as I can before making the investment. 

In the mean time, I have crypto ETFs to invest in, and I may just buy a snickers or two worth of BTC as we go along. 

There really is a lot to consider on all of this! Thanks again!

Yes, except that depending on your luck, your gear could do a bit more or less, but the variance is too little and thus we can ignore it.


It is pretty high.


Here comes the problem, or at least a part of it, technical and physical wise with all economics ignored, there is NOTHING that guarantees a miner to run that long, while it's possible - it isn't an average by any means, so it's very unrealistic to expect that your mining gear will run at full speed for two years, there is no perfect way of estimating this, but the safest approach would be that your gear will run at no extra expenses as long as it's under warranty, after that it can either die on you, lose a hash board or a PSU and thus requires more expenses that would mess the whole rainbow scenario that you drew.

In fact, even when it's under warranty, you will lose time, from opening a repair ticket to actually receiving the gear back, a few months can pass by.

I know some people will argue that taking the 6 months warranty period as the max free-expense period is way too conservative, but this is really the only rational way I can think of, remember that you are dealing with mining gears that are made in China with little to no regulations or quality control, many of us received DOA gears, many of us had gears that died 1 week later, thinking that you will be super lucky with a mining gear that will run for 2 years troubles-free is simply betting against the odds and that is no good for business.


Perfect, that's how it should be IMO.


I don't want to milk this all over again, so refer to the previous part, also check my topic regarding my S9ks that came DOA, also my posts regarding Chinese miners having hundreds of dead gears after running them for a very short period of time, look around and you will see that 2 years is just isn't likely even thought it's possible.


This is another major issue, you can't get S19 pro for $2684 not while profit is looking this great, S19 pro is $4500 in China, and it's not ready to ship, you got to wait till January (assuming bitmain sends those gears anyway), so let's just assume you can avoid tax by getting it from Malaysia and shipping is free, so re-do the math with $4500.


I have not checked the math, but I would trust that you know how to use a simple online calculator like whatmine.com and that you entered the right power rate, the numbers don't look too far-stretched anyway, so the math seems correct, but the logic is off by a bit, allow me to take you the future and back with this chart.



This is the difficulty chart, I want to imagine that you came here, asking this question exactly two years ago (based on your 2 years assumptions), so that would be 11-12-2018.

The difficulty was 5.6T, at the time the S15 just came out and the price of Bitcoin was about $4000 and the S15 went for about $1500 which was 0.37 bitcoin back then, if you run the math back then it would give you 0.00064 daily or 0.467 BTC in two years, or 0.1 profit (27% profit on top of your investment), but guess what? non of that shit would have happened because the difficulty grew by 250%, so while it made 0.00064BTC daily back in Dec 2018, it only made 0.00028BTC in Dec 2019 when diff was 12.8T (-56.25% drop) and it will only make 0.00019BTC daily in Dec 2020.

Remember, this assumes that it did indeed run perfectly for 2 years, which is unlikely, oh and by the way, those figures didn't include any power bill, just a 4% pool fee, so when you add the power cost to it, 90% of people who paid 0.37BTC for an S15 did not make 0.37BTC as of today.

Looking into the future when it's 2022, this chart can only be looking similar, a guy who buys S19 pro for 4.5k does the math of 19T difficulty, only to realize that difficulty has gone up exponentially and his S19 pro didn't actually mine for 2 years.

To be successful in mining you need:

1- Have a very low power rate.
2- Buy the right gear at the right price and time.

You don't have a cheap power rate, and as of now, Bitcoin mining is tempting, the demand on mining gears is pretty high, the supply on the other hand is low, it's just about the worst time to be investing in bitcoin mining, but that's just my opinion and own analysis that could turn out to be wrong 2 years from now, you can bet against it, and I will have to wish you a lot of luck because you will really need it.

Mikey, so I was playing with a spreadsheet today, and I'm trying to wrap my mind around what I'm reading here, and on other topics, and my math is so weird, I must be doing something wrong.  So using one of the mining calculators, and setting it up with the posted rates from bitmain.com on the three miners they presently have listed - T19, S19, and S19 Pro...  I used the following assumptions:

 - that the TH/s and the power consumption are exactly what they say they will be. This is probably not the case, correct?
 - that my power is 14 cents (USD) (which I'm learning is a lousy rate at the highest consumption tier, where an ASIC would certainly land me)
 - that the ASIC will run 2 years before it dies (which I'm told is possible)
 - and for this exercise I'm ignoring the actual price of BTC, and just focusing on how MUCH coin can be mined for X dollars
 - spreading the cost of the equipment over 2 years
 - I realize this is grossly oversimplified.....

So let's say I could actually buy an S19 PRO for 2684.00 and let's pretend the shipping is free and no trump tax, because I don't know those dollar amounts.  The calculator says that machine can crunch out 0.2625 BTC per year, at a power cost of $3863.16 per year.  So double both of those numbers for a 2 year total:
 = 0.525 BTC mined in 2 years, Equpment cost of $2684, power cost of $7971.60.  So my costs are $10655.6, to generate just over a half a bit coin, means (not counting any auxiliary expenses ) is about $20,296.38 per BTC.  And it took two perfect, no interrupted years to get there.  Am I doing this math right? You guys on 4 cent power knock about $5000 off that 2 year price tag.  It's insane.

Please don't delete this thread because I'm going to say the words "GPU mining ETH" here, but I did the same type of calculation on that with an 8 card rig, and came up with a cost of under $200 per coin, much less than the current price.

This has been an awful lot of information to wrap my head around.  I've been at it for a few weeks now, and it's all pretty mind blowing.

I sell a lot of older gear. I modded quite a few s9s with braiins software .

designed them to be quite use less watts .

Right now I am checking some older gear ⚙️ trying to keep it running.

my whatsminer gear is all breaking down.

m20s should do 70 only does 45 dead board.
m20s should do 70 only does 39 must set to low or it overheats
m21s should do 50 dead psu
m10. should do 30 does 28
m10 should do. 30 does 14

270 is down to 126

I have a lot of aging sha 256 gear.

we may run it all into the ground and then switch to the antracks.

Wow that's quite a setup Philipma.  I'm working my way through your videos and just got to the one where you have a location with the partner in an old warehouse.

So I guess another direction to ask this - since the chatter I see (all speculative, of course) is that bitcoin is going to go crazy in the next year or two.  Let's say for argument sake, it goes to 50k per coin.  That busts all the calculations out the door the now, right?  Machines that used to not be profitable anymore, or just barely breaking even, now you fire those up because the coin you're mining is worth way more, right?

Okay I am not a hobby miner But I am not a big farm or a medium farm.

60 gpus
25 ltc asic miners
50 BTC asic miners.

in 4 locations  3 of the 4 are very good power cost.
I is not I only mine at mine home to test and repair the gear for the other 3 locations.

Since this is BTC section only I will talk about the BTC gear.  my deal for btc asic is I pay for ½ the gear I own ½ the gear.

I get 25% of all btc mined. There is me,buysolar,a warehouse guy and his son.

So lets say I put up 25k and buysolar puts up 25k.  50 k of pdu's wires cables and various btc miners.

Since we take 50% of the coins no matter what happens we get coins.  The warehouse guy put up the power and the warehouse and get 50% of the coins.

how can I lose.  the gear breaks or gets damaged in a fire or gets stolen.

the warehouse guy and his son are in a different spot. if 50% of the coins do not cover the power they lose.

I balance the books and keep the gear running.

Fo me and buy solar we could put in the cheapest gear per th and make money but it is not exactly fair to the ware house guy.

So I try to blend gear. good better best.

I also try to track the diff which can give me a 4 week guess on how many coins week earn in the four weeks.
I spend 4 hours a day:

tracking gear
on the cheap.
coins price
diff

Fixing gear varies sometimes 8 or 12 hours a week sometime zero  so this adds to 30-40 hours a week.

Good points on the revenue details.  Also I was thinking, whatever numbers a calculator shows today, will be different tomorrow, because the prices for the various coins are so volatile. I mean a configuration of TH and power consumption that shows a positive cash flow of say $2 per day right now, could be a $5 per day loss if the price of the coin drops substantially, correct?

I would assume you guys that do this a ton, monitor the prices and act accordingly.  I've seen posts referring to turning off miners if the price drops too bad, or switching to a different coin that your gear supports...  I would imagine this can be quite a bit of time spent monitoring this and adjusting your moves, am I correct? 

Buying new S17s brand new from Bitmain comes with an average failure rate of 30% (please pay attention to the word average), so buying a second-hand gear from Alibaba comes with even greater risk, you should avoid all the 17 series altogether.

What newbies do is the following, they go to whattomine.com or any mining calculator for that matter and enter their hashrate + power rate and they get a monthly profit of X in fiat. For example, they enter 10 cents per kWh , 110th, and 3500w ( the specs of S19 pro). The result will be :

Total = $15.56
Net profit after paying the power bill =$10.50

Gear cost = 4000, so ROI = 4000/10.50 = 380 days or just over a year, what's funny is that even some of these calculators will tell you that you need 380 days to return your investment, but this couldn't be further from the truth.

These calculators assume static price and difficulty, and this is never the case, there is no way that both difficulty and price will remain the same, but you might say, well this is totally random since they can go either way, so 380 days could be 100 days and can be 500 days.

Well, not really, on the scale of probability and based on historical data from the genesis block up to now, the difficulty only goes up when the timeframes considered are a few months and above, on the other hand, price doesn't do that all the time. so it isn't a 50/50 chance here, it's worse, think of it as your odds against the casino.

With that being said, even if the stars were aligned perfectly and you did manage to get back your $4000 in 380 days and then you sell it for $2000 thus making a profit of $2000, that total $6000 you end up with might not worth the btc that you spend today, so while you may manage to ROI in USD terms, you lose big time in BTC, this assumes your gear will still be profitable and you won't be forced to shut it down sooner and sell it for pretty cheap.

There is a lot more to it than just this, this post is just the summary of how calculating mining profit isn't as simple as these websites show you, I can go on forever but the short version of my story is if you can't ROI in a few months, you have better chances making more profit buying BTC directly rather than going into the rabbit hole of mining.

As for solar, phill will be your guy, he runs most of his gears on solar power and he probably knows best.

Unless your government offers incentives that will cover 75% of the cost of the system, it doesn't make sense to use solar for mining, at least profitability wise. But depending on where you live, it is possible to get the taxpayer to buy a lot of your system for you. Can't hurt to check it out.

Get some quotes, they will generally give you a report of total cost, tax incentives, and how long it will take to pay the system off with your power usage. I did this a few years ago. For where I live, it would have taken around 6 years to pay back the cost of the system if I laid out cash to buy it. What I got quoted worked out to paying around 10c/kwh if the system never broke and lasted for 25 years. That was after all the tax breaks.

Thank you both for the additional input - Sorry, it took me a bit to find this thread, it looks like it got moved and I couldn't see it.  While I am specifically asking questions about hardware, I guess the mods felt it belonged over here in this this subforum, that's cool with me, I just thought it had been deleted.

Yes, I'm not looking to take a huge risk.  I believe in diversification, and though I've started working towards retirement late, I'm diversified pretty well there.  I've thought about notion of mining vs just buying a sliver each month and adding that to my overall investments.  I wouldn't be putting my eggs all in one basket for sure.

Solar panels are popping up on many roofs all over my neighborhood, I've wondered if something like that would add a useful value to my home and then help offset the costs of mining as well.  I see some of you are using solar in your operations.

I am liking Philipma's idea of starting with some video card mining to get familiar with the process. My understanding is that this isn't useful for BTC but would be geared more towards other coins, so I'm engaging along those lines in another thread Philipma invited me to.  Looking to see right now if some existing hardware I have would work for a couple of cards.

I see used S17s on Alibaba, have you guys had good or bad experiences buying there?  I understand the used factor is risky.

And I'm trying to calculate as best as I can, the power costs, as well as my definition of what would make this successful.  I'd like some help with what you said Mikeywith, about the ROI mistakes new miners make.  Can you elaborate on that?  I'm running all kinds of numbers through the revenue calculators I've found, but I don't have a solid way to factor in equipment cost.  At the end of the day, in my mind, if I'm breaking even, not flowing anything into my own pocket for pleasure, but I'm slowly dripping some BTC (or other coins) into my portfolio, and doing so for less than just buying the coins outright, then I think I can live with that.  But it's all just theoretical right now.  I might try setting up this little GPU rig and completely failing at understanding how to configure it, or to optimize it, etc., and realize this isn't for me.

It's very intriguing, that's for sure!

---

So for the sake of curiosity, I just ran an online solar panel estimate on my home - it uses google imagery for measurements, etc., and sends you back a virtual layout of the panels, how they would go on your house and what they would create.  According to that rough estimate, it said my roof could support 10.5kw in solar panels.  I'm not sure exactly what would mean in terms of cost, etc., I'd have to have a real tech come out and do proper measurements for that, not something I'd want to do unless I felt real solidly that I'd be headed that direction.  For the record, I would consider solar regardless of mining, now that it seems like it's becoming more and more standard in my area - I'm hoping to let all the early adopters eat the biggest part of the cost so hopefully it's cheaper by the time I do it ;-)

I usually ignore such questions since really almost all the information you need can be found around the forum, but you seem very serious and you put quite a lot of effort into asking your questions.

The sad truth is that it isn't a great idea to consider mining with the power rates you have, even your lowest tier rate is high, let alone the 3rd tier of 14 cents, while power rate isn't the only thing that separates a successful mining business from a losing one - it still is the most essenital factor, mining, in a nutshell, is competing with thousands of other miners around the globe.

It is pretty safe to assume that the average power cost for large mining farms is 4 cents, let's be "optimistic" and say its 5 cents per kWh, so your odds are terrible, and the chances that your miner will die before you hitting ROI are very high, now one mistake many miners do is focus on the fiat value of mining to determine a succesful business plan, there is no doubt that even with 14c kwh you might make $5000 out of the $4000 you invest in S19 pro, but this isn't how to look at it.

$4000 is 0.21BTC, are you going to make 0.21btc before your power bill surpasses your earnings or before the miner is dead? hard to tell, but unlikely.

Are you 100% guaranteed not to make a profit? of course not, miracles do happen, China might ban mining altogether or a hurricane hits 10-20 large farms in China making your S19pro 5 times more profitable, but you don't want to bet against the odds, at least not while making a business plan for your retirement.

When bitmain allowed PayPal in fall of 2019 we purchased 35000 worth  of s17pros using paypal.  We had six months to pay.  It worked out very well for us.

Keep in mind that you can probably find a host to run your miners for around 7c/Kwh all in the US or Canada, less if you're willing to use one in Russia or China. Lots of large operations are out there mining at less than 4c/Kwh, and that makes it risky to be paying 7c, really risky to pay >10c. Chances of making back your investment in the hardware back go down dramatically. So with your power rates, I'd maybe find a S17/S17pro to run yourself if you want to tinker, but send any others off to a host. With the recent prices, hosts may start filling up to capacity pretty quickly though.

I like the idea of holding what you mine ... that's exactly what I've been doing nearly since I started. The only BTC I've parted with was to directly buy more miners, and I regret every time I've done that. Should have just used $. Thought I would need to start selling some to pay my hosting fees after expanding this early year, but ended up not doing that, and now the BTC I mined at 8K is worth 19K... Of course it could have gone the other way, but if your not long-term bullish on BTC, probably shouldn't bother mining anyway.

Another thing to keep in mind is that the 17 series from Bitmain have had manufacturing issues that have caused some people to claim that up to 20% of the miners they got failed within the warranty period, which is awful buy itself, but then the repair centers got backed up and now with COVID they are all but completely shut down. I've been waiting over 4 months for a S17pro I RMAed to the CA repair site. Don't know if people have had 19 series long enough to know if the manufacturing issues have been fixed.

See this thread for more info.

Used gear is always iffy.
All gear is priced high at the moment.

We do have a market place there are some good sellers there.
There are some good escrow guys

I have to tell you your power is okay but not good.

I sent a pm to you as this section does not allow for alt coin discussion.

Philip, thank you for the feedback. I was hoping you would chime in, as you seem to be super active here with loads of experience. I'm actually consuming several of your youtube videos today, thank you for sharing those.  I'm starting at the older ones and working my way forward, trying to catch up.  I meant to say in the original post, that obviously the best play would be to invent a time machine, go back 10 years and get started in this LOL.

good to know on the life spans.  This is also sours me on the idea of getting 2nd hand equipment, as it seems the previous owner could have sucked all useful life out of it already!  haha

Our power is not super cheap, and it has a tiered structure.  Summer rates vs. winter rates, and we pay on the low end, 8.8 cents for the first 400 kwh, then either 10.7 or 11.5 cents (depending on season) for the next *I think* 600 kwh.  My normal usage is historically just tipping over past the 400 kwh block.  After that, which I would assume running miners would push me there, it's about 14 cents in the 3rd tier.  Solar is making a big push in our area, so maybe it's time to consider that to help offset some costs, but I havent ever looked into that very hard yet.  Might be time to.

The cold storage area in my basement is basically a concrete vault with an open door way, by itself with no external influence stays about 60 degrees fairly constantly.  Might also be good for hiding the  noise too, provided I can address the open door way, which is generically framed right now.  Probably not too hard to build something and include some in/out ducting as well.

What sources have you or other folks seen for the used hardware like the s17  pro's you are suggesting?  The idea of getting them on ebay or amazon makes me nervous from all the scammy stuff I've seen.  Is there a way to test a unit to see how well it's been maintained, or see how many hours are on it, anything to try and protect myself from picking up a lemon?