What type of capital investment would be needed to set up a mining farm?

seriouscoin

hero member

Activity: 658

Merit: 500

Quote from: coinits on August 12, 2014, 03:04:11 PM

Quote from: SMB-2525 on August 11, 2014, 09:59:04 PM

Quote from: seriouscoin on August 11, 2014, 08:59:46 PM

I cant believe you guys convinced the noob that he can make money mining right now.

LOL Atleast show him how to do a proper calculation.

Hey OP, newsflash for you, you're competing with +80% of the network that only pays <7c/kwHr

I sent him my spreadsheet. He has the modeling tool to run various scenarios.

I've modeled on in a few different scenarios. Seems that I'm always chasing my tail. I can make money but not at the level I would want. And just before it starts to decline I would need to buy more miners to stay afloat.

But then I say to myself that someone is mining, yeah the boys with unlimited resources.

I saw this today and shit my drawers:

Inside a Chinese Bitcoin Mine

Then this guy with his solo act:

https://www.youtube.com/watch?v=ELA91d_mx80 - I've seen this before.

None of them are "solo"

They got the capital from ppl like you who buy their mining hardware which then fund their mining farm. Lots of ppl cant wrap around this simple concept...

Ppl say they sell because mining is too risky and they can make more money to sell.... well its only half truth.

To be able to stay ahead of the game, they need large capital to start a mining farm that use the best electrical rate (2-5c/kwHr) Small miners have no chance to compete, at best you just wish for a break-even. They COMPETE with their own customers! Remember that as their farms are going up, they're pushing their customers out of the mining game (most small miners can only get 10c/kwHr at best). Its a no risk to them.

Put your effort into something else (services) to have income, and buy btc and hold will gain you furthest.

Mining game isnt for hobby or small business venture, its for the big boys. I say let them find capital elseswhere and not sucking us in for a free-risk capital funding.

coinits

legendary

Activity: 1582

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011110000110110101110010

Quote from: SMB-2525 on August 11, 2014, 09:59:04 PM

Quote from: seriouscoin on August 11, 2014, 08:59:46 PM

I cant believe you guys convinced the noob that he can make money mining right now.

LOL Atleast show him how to do a proper calculation.

Hey OP, newsflash for you, you're competing with +80% of the network that only pays <7c/kwHr

I sent him my spreadsheet. He has the modeling tool to run various scenarios.

I've modeled on in a few different scenarios. Seems that I'm always chasing my tail. I can make money but not at the level I would want. And just before it starts to decline I would need to buy more miners to stay afloat.

But then I say to myself that someone is mining, yeah the boys with unlimited resources.

I saw this today and shit my drawers:

Inside a Chinese Bitcoin Mine

Then this guy with his solo act:

https://www.youtube.com/watch?v=ELA91d_mx80 - I've seen this before.

tcrasher

newbie

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Merit: 0

I had two S3's come via DHL and had to pay $123.98 in taxes when they delivered. I am in Ontario.

SMB-2525

full member

Activity: 195

Merit: 100

Quote from: seriouscoin on August 11, 2014, 08:59:46 PM

I cant believe you guys convinced the noob that he can make money mining right now.

LOL Atleast show him how to do a proper calculation.

Hey OP, newsflash for you, you're competing with +80% of the network that only pays <7c/kwHr

I sent him my spreadsheet. He has the modeling tool to run various scenarios.

bitcoinbearhk

member

Activity: 76

Merit: 10

Quote from: Bitsaurus on August 09, 2014, 05:42:13 PM

Quote from: coinits on August 07, 2014, 10:22:27 PM

Quote from: Korbman on August 06, 2014, 10:01:01 PM

Quote from: coinits on August 06, 2014, 08:09:57 PM

I have a 14 x 20 space and I'm thinking of setting up a btc mining farm. What kind of rigs and systems do I need to pull this off. At current btc prices I would like to haul in a net profit of 50 k per year. This would be under a legit business as I could write off costs.

In Canada if that matters.

Thanks

280m² is a fairly substantial amount of space (at least I'm presuming it's in meters since you mentioned you're in Canada). Since you seem to have that covered, your next objectives are to secure power and cooling / ventilation.

What is your average cost per kWh?
What is the cost to own the space (either rent or mortgage)?

A net income of $50k per year would mean roughly BTC80-90 at current prices. Let's assume your ongoing operational expenses (energy, cooling equipment, rent, internet, miscellaneous maintenance) amount to the same amount...meaning in 12 months you've generated BTC180 (BTC90 for expenses, BTC90 net profit...all assuming a stable BTC/USD or CAD price).

For an entire year, the Bitcoin network of miners will generate roughly BTC1,314,900 until the next block reduction in ~2016. To generate a revenue of BTC180 over the course of 12 months, you will need enough equipment to constantly maintain 0.0137% of the network, or approximately 19.18TH/s at the current network rate (~140PH/s). This would mean 45 BitMain S3 miners to start, increasing your amount of hardware over time to compensate for the difficulty increases.

This is just a very brief overview of course, and the caveats in this game are plentiful.

Thank you for the info but the space was in feet not metres. Me bad. I'm old school when it comes to dimensions. The space is paid for and electricity is 10.05¢ per kWh + a $20 per month service fee.

This give me a framework to build around. Time to cash in my RRSP because the fucking government and banks will just take it anyway!

Your electricity cannot be $10.05 per KWH - that would be the highest rate on Earth. Please clarify - did you perhaps mean $0.10 as in 10 cents per killowatt hour? Even that is on the higher side now as many miners have most to areas with $0.02/KWH.

$0.02/kWh is indeed SO cheap, where do you get that? In my opinion $0.10/kWh is not too bad and is quite decent.

seriouscoin

hero member

Activity: 658

Merit: 500

I cant believe you guys convinced the noob that he can make money mining right now.

LOL Atleast show him how to do a proper calculation.

Hey OP, newsflash for you, you're competing with +80% of the network that only pays <7c/kwHr

grn

sr. member

Activity: 357

Merit: 252

Quote from: philipma1957 on August 10, 2014, 01:46:31 PM

Quote from: coinits on August 09, 2014, 11:50:02 PM

Quote from: Bitsaurus on August 09, 2014, 11:47:13 PM

Quote from: coinits on August 09, 2014, 11:43:57 PM

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Then I'm assuming you're using electrical heaters. You should send all the excess heat into your living space or spend money with the diversion.

If you were using gas for heat it may not be worth it to do this, however, as natural gas is insanely cheap right now in most places.

You would be running a cyclical farm 8 months of the year - may or may not work.

Yes electric here and gas is expensive because our government meddles and retrofitting is too damn expensive.

oh so if that is so you are under 8 cents maybe under 7 cents. from sept 30 to apr 30.

I would think antminer s-3's could work for you. The trick is how to get them in house and pay low import taxes. You need a canadian to post here that has ordered

from bitmain. right now 2 are 1.32btc which is about 770 usd. shipped to your home.

if you order 2 at a time you may save on import taxes.

you will also be able to setup a bit slower to see if this will work.

There are no import duties to canada but you will have to pay pst/gst

Bitsaurus

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Activity: 873

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Quote from: EvilPanda on August 10, 2014, 08:19:54 PM

Quote from: coinits on August 10, 2014, 01:51:39 PM

Having ordered online from many countries the government misses a lot. I find that they miss almost all of the ones I have sent via air/express UPS, Purolator etc.

I am thinking that I will do it in small increments and see how it goes. Slow and steady.

Great idea buy a bit, see how it goes and then double. It's better to be safe than sorry.

You asked what systems are needed. It depends on on the location (ambient temp.) and the heat produced by the miners. If the room is in your house you may need to make it soundproof so it doesn't annoy you 24/7.

Can't really make miners soundproof unless you enclose them in a room and vent the room. Where there is airflow there is sound since air transmits the sound. That's why he was going to run them outside in the first place. Annoying noise vs free heat in winter... depends on what the wife/GF allows Tongue

EvilPanda

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Small Red and Bad

Quote from: coinits on August 10, 2014, 01:51:39 PM

Having ordered online from many countries the government misses a lot. I find that they miss almost all of the ones I have sent via air/express UPS, Purolator etc.

I am thinking that I will do it in small increments and see how it goes. Slow and steady.

Great idea buy a bit, see how it goes and then double. It's better to be safe than sorry.

You asked what systems are needed. It depends on on the location (ambient temp.) and the heat produced by the miners. If the room is in your house you may need to make it soundproof so it doesn't annoy you 24/7.

coinits

legendary

Activity: 1582

Merit: 1018

011110000110110101110010

Quote from: philipma1957 on August 10, 2014, 01:46:31 PM

Quote from: coinits on August 09, 2014, 11:50:02 PM

Quote from: Bitsaurus on August 09, 2014, 11:47:13 PM

Quote from: coinits on August 09, 2014, 11:43:57 PM

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Then I'm assuming you're using electrical heaters. You should send all the excess heat into your living space or spend money with the diversion.

If you were using gas for heat it may not be worth it to do this, however, as natural gas is insanely cheap right now in most places.

You would be running a cyclical farm 8 months of the year - may or may not work.

Yes electric here and gas is expensive because our government meddles and retrofitting is too damn expensive.

oh so if that is so you are under 8 cents maybe under 7 cents. from sept 30 to apr 30.

I would think antminer s-3's could work for you. The trick is how to get them in house and pay low import taxes. You need a canadian to post here that has ordered

from bitmain. right now 2 are 1.32btc which is about 770 usd. shipped to your home.

if you order 2 at a time you may save on import taxes.

you will also be able to setup a bit slower to see if this will work.

Having ordered online from many countries the government misses a lot. I find that they miss almost all of the ones I have sent via air/express UPS, Purolator etc.

I am thinking that I will do it in small increments and see how it goes. Slow and steady.

philipma1957

legendary

Activity: 4116

Merit: 7849

'The right to privacy matters'

Quote from: coinits on August 09, 2014, 11:50:02 PM

Quote from: Bitsaurus on August 09, 2014, 11:47:13 PM

Quote from: coinits on August 09, 2014, 11:43:57 PM

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Then I'm assuming you're using electrical heaters. You should send all the excess heat into your living space or spend money with the diversion.

If you were using gas for heat it may not be worth it to do this, however, as natural gas is insanely cheap right now in most places.

You would be running a cyclical farm 8 months of the year - may or may not work.

Yes electric here and gas is expensive because our government meddles and retrofitting is too damn expensive.

oh so if that is so you are under 8 cents maybe under 7 cents. from sept 30 to apr 30.

I would think antminer s-3's could work for you. The trick is how to get them in house and pay low import taxes. You need a canadian to post here that has ordered

from bitmain. right now 2 are 1.32btc which is about 770 usd. shipped to your home.

if you order 2 at a time you may save on import taxes.

you will also be able to setup a bit slower to see if this will work.

coinits

legendary

Activity: 1582

Merit: 1018

011110000110110101110010

Quote from: Bitsaurus on August 09, 2014, 11:47:13 PM

Quote from: coinits on August 09, 2014, 11:43:57 PM

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Then I'm assuming you're using electrical heaters. You should send all the excess heat into your living space or spend money with the diversion.

If you were using gas for heat it may not be worth it to do this, however, as natural gas is insanely cheap right now in most places.

You would be running a cyclical farm 8 months of the year - may or may not work.

Yes electric here and gas is expensive because our government meddles and retrofitting is too damn expensive.

Bitsaurus

hero member

Activity: 873

Merit: 1007

Quote from: coinits on August 09, 2014, 11:43:57 PM

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Then I'm assuming you're using electrical heaters. You should send all the excess heat into your living space or spend money with the diversion.

If you were using gas for heat it may not be worth it to do this, however, as natural gas is insanely cheap right now in most places.

You would be running a cyclical farm 8 months of the year - may or may not work.

coinits

legendary

Activity: 1582

Merit: 1018

011110000110110101110010

Quote from: Bitsaurus on August 09, 2014, 11:38:20 PM

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

One thing that I can factor in is that I can use the heat to partially heat my living space. Since we are in cold weather for 7-8 months per year it will help offset the heating bill.

Bitsaurus

hero member

Activity: 873

Merit: 1007

Quote from: coinits on August 09, 2014, 07:47:07 PM

Actually I did say 10.5 cents. DOH!

At 10.5 cents I probably wouldn't consider setting up a farm as you will be making a significantly lower profit margin from the beginning. Either find a site with lower power rates or find a way to steal electricity Cheesy

SMB-2525

full member

Activity: 195

Merit: 100

At 10.5 cents/KWHR, you are gambling on the rate of difficulty increases to go down or the value of BTC to go up to invest in current generation mining hardware. Note the recent rate of difficulty increases has been substantially lower than the 16% average for 2014. If you have not built a spreadsheet, PM me and I'll send you mine.

I have a tiny mining operation going with "free" electricity. I would not if I had to pay for electricity.

coinits

legendary

Activity: 1582

Merit: 1018

011110000110110101110010

Actually I did say 10.5 cents. DOH!

Bitsaurus

hero member

Activity: 873

Merit: 1007

Quote from: coinits on August 07, 2014, 10:22:27 PM

Quote from: Korbman on August 06, 2014, 10:01:01 PM

Quote from: coinits on August 06, 2014, 08:09:57 PM

I have a 14 x 20 space and I'm thinking of setting up a btc mining farm. What kind of rigs and systems do I need to pull this off. At current btc prices I would like to haul in a net profit of 50 k per year. This would be under a legit business as I could write off costs.

In Canada if that matters.

Thanks

280m² is a fairly substantial amount of space (at least I'm presuming it's in meters since you mentioned you're in Canada). Since you seem to have that covered, your next objectives are to secure power and cooling / ventilation.

What is your average cost per kWh?
What is the cost to own the space (either rent or mortgage)?

A net income of $50k per year would mean roughly BTC80-90 at current prices. Let's assume your ongoing operational expenses (energy, cooling equipment, rent, internet, miscellaneous maintenance) amount to the same amount...meaning in 12 months you've generated BTC180 (BTC90 for expenses, BTC90 net profit...all assuming a stable BTC/USD or CAD price).

For an entire year, the Bitcoin network of miners will generate roughly BTC1,314,900 until the next block reduction in ~2016. To generate a revenue of BTC180 over the course of 12 months, you will need enough equipment to constantly maintain 0.0137% of the network, or approximately 19.18TH/s at the current network rate (~140PH/s). This would mean 45 BitMain S3 miners to start, increasing your amount of hardware over time to compensate for the difficulty increases.

This is just a very brief overview of course, and the caveats in this game are plentiful.

Thank you for the info but the space was in feet not metres. Me bad. I'm old school when it comes to dimensions. The space is paid for and electricity is 10.05¢ per kWh + a $20 per month service fee.

This give me a framework to build around. Time to cash in my RRSP because the fucking government and banks will just take it anyway!

Your electricity cannot be $10.05 per KWH - that would be the highest rate on Earth. Please clarify - did you perhaps mean $0.10 as in 10 cents per killowatt hour? Even that is on the higher side now as many miners have most to areas with $0.02/KWH.

Dabs

legendary

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The Concierge of Crypto

Well, if in Canada, maybe your mine can be like Volkswagen... I mean, air-cooled. Runs better in winter, for example. Depends on which province you are in.

I mean, if you happen to be in Nunuvut or Northwest Territories, then heat will be less of a factor (and noise is probably irrelevant.)

Kprawn

legendary

Activity: 1904

Merit: 1073

Most of the cost come from the stuff you least expected.

Air conditioning damage and repairs and the cost of the mining racks. So factor in these type of things, when you do your calculations.

The hidden cost creep in slowly, and if you have no liquidity, you might run into problems, keeping your farm running.

Topic: What type of capital investment would be needed to set up a mining farm? (Read 2185 times)