I run a mining farm for myself and when im reading about mining contracts, i have a question.
Why should I prefer mining contracts instead of my own rig?
A contract should give me Bitcoins cheaper than my own rig. With cheaper i mean the sum of productions costs (energy, space, cooling, hardware price decline, prices for repairing hardware), time to keep the rig running (build computers, install operating system, update drivers and miners, check status of miners, fix problems), the real uptime of the miners and the risk of running own hardware.
Im very experienced and can calculate the real production cost of a bitcoin accurately.
By the way i'd like to get PMs, if I forgot something in this list.
So which type of this costs are cheaper if a company builds up a rig and run it? If they aren't cheaper there is no reason of buying a contract.
Some of these costs are obvious, like hardware, energy, uptime) and others depend on how much u pay for your own worktime)
- A company gets better hardware prices, if they buy large numbers. But in order to get these prices, they should buy at least hardware for 20k €. I worked for a small E-Shop and i know that companies just get good hardware prices, if they buy large amounts or often. Otherwise the casual shops are cheaper.
- Energy and space is cheaper for companies, at a specific size, you can't run a rig in your own house anymore
- Cooling can be simple, if you have a room and just open all windows, so you don't need to run a cooling machine. Large Rigs in production halls can benefit from open windows, too
- Hardware price decline is the same for companies as for me
- The larger the rig, the better is the uptime. One damaged part influence Hashrate relatively less in large rigs, and having some spare parts are relative cheaper.
- Companies have more experience in setting up and running rigs than the casual user, so the time needed to build a miner and keep it up is less
- The risk for companies is higher, because they need to pay space rental, and even if they shut down a rig, they have to pay loans and rental for at least a month. This limits running mining farms to small companies without employees, or their farm has to be real large
If i put this all together, i cant imagine, that a large company would setup a farm. Just some nerds who doesnt need employees can do this without too much risk. A production hall is not that expensive so the risk is limited to less than 1000€.
So finally there are some good reasons why a contract can be cheaper than your own rig. Better Uptime, less manhours to setup and keep it running. No risk of loosing hardware or hardware price declines. They have less energy and maybe slightly less hardware costs. But the manhours are more expensive, a company wants to get at least 6% revenue of their investment and has a higher risk so they need to get higher reserve.
So beginners can rent hashpower because they arent experienced enough to build their own rig. But for people with enough experience, the only advantage is less risk, slightly better energy and hardware costs. People who are too lazy to run a rig should just buy bitcoins...
But if you make a contract more risky by paying 3 month at least, renting becomes useless.
PS: I would really like to get response, if i forgot some points in this list, or if you think im wrong in some points.
