[Progress thread] Building out a crypto mine, step-by-step - AMA

[GlobalWealth]

I forgot to post the pic of what it all looks like.

If you are so inclined to provide advice on my wire placement....don't...lol. Yes, that means you @LightHouse ...

Seriously though, the wiring pushes my OCD through the roof, but due to the nature of how this works it would not make any sense to ziptie the wires up only to need to cut the wires a day later. This is a project in process. Eventually once all the details are sorted I will try to figure something out with these damn wires though.

On the left section are all the A9's. In the middle section are the Z9 minis. On the right are the L3's. You will notice on the top right shelf are 4 miners no plugged in.

Those are Bitmain A3's that mine Siacoin. I bought those used from someone who was desperate for cash. I paid the same for them as I would have paid for just a PSU, and they came with the PSU. Since I needed extra PSU's, it was like getting a miner for free anyway. For now, I am not plugging them in since they are unprofitable to run. If/when Sia price recovers over $.01 - then I will put them to work.

Currently I have the power to duplicate this exact setup 5 more times. As we reinvest into more hardware we will determine the best coins to mine and thus the best hardware to purchase.

You will also notice a laptop on the middle shelf. This is connected to the network and I'm using TeamViewer to remote access this laptop so I can work on the machines without physically being there.

We are looking into software solutions to automate some of this process, but for the time being, I am able to access the network from my laptop or my phone for updating firmware, rebooting machines, and making adjustments.

If anyone has questions, feel free to ask.

 

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[garyfritz]

Congratulations on your launch!

You are currently profiting $13k per month. I assume that includes power cost, but it does NOT factor in the cost of purchasing the miners or making the infrastructure changes? How long do you think it will take to reach breakeven, given expected difficulty increases? What will your profit picture look like by the time you have reached breakeven?

 

[GlobalWealth]

Congratulations on your launch!

You are currently profiting $13k per month. I assume that includes power cost, but it does NOT factor in the cost of purchasing the miners or making the infrastructure changes? How long do you think it will take to reach breakeven, given expected difficulty increases? What will your profit picture look like by the time you have reached breakeven?

Thanks.

The payoff on the hardware will be between 5-6 months. Add another 3-4 months for payoff of the infrastructure costs.


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[garyfritz]

The payoff on the hardware will be between 5-6 months. Add another 3-4 months for payoff of the infrastructure costs.

That is awesome -- but I don't understand it.

I must be looking at something wrong. I just looked at the MyCryptoBuddy profitability calculator, mining ZEC with a Z9. Assuming 42 kSols/s, 1200W, & $0.07/kWh, the calculator says you start out with $730/mo profit but it drops rapidly. The calculator says the profits top out at about $2000 -- and the miner costs $3100.

Given that projection, it would make no sense to set up a miner. Obviously you're working with different projections. Do you use a different profit calculator, or ...?

 

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[GlobalWealth]

Given that projection, it would make no sense to set up a miner. Obviously you're working with different projections. Do you use a different profit calculator, or ...?

Honestly, it is impossible to base an investment decision off a profit calculator that factors change in difficulty.


Difficulty is really just a factor of how many miners are on the network so it is impossible to determine how many miners will be running from day to day. The coin price does affect this since as a coin becomes more profitable in USD terms, people tend to buy more machines, but the inverse is also true.

Right now both Zcash and ZEN are down from a couple of months ago. So anyone claiming to predict the future of mining profits based on future changes in difficulty is just guessing.

With that said, I believe a lot of mining investment decisions are in fact educated guesses.

If I want to invest in rental properties, barring an economic crisis or currency collapse, I can get a decent projection of profitability for 10 years, maybe more.

But with mining, I can estimate about 6 months out. Anything more than that is pure speculation.

 

[GlobalWealth]

Speaking of mining profitability, we were just offered 100-200 bitmain s9's for $100/e.

They have been turned off for a couple of months and only used for about 3 months.

I'm not really interested, but it shows when prices are down smaller operators bail out and hardware gets turned off thus affecting difficulty.

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[GlobalWealth]

Update:

All of our GPU mining hardware showed up about 10 days ago. It passed customs in one day.

I find that funny since it was 1400kgs on 4 pallets with all the contents packed in bubble wrap with no labels. Customs most likely was too lazy to want to deal with it, but I still have 8 PSU's they won't allow to pass because they claim they are all missing one sticker.

We now have our V1 GPU miners up and running. These are the ones with 8 GPU's per machine. So we are now mining with 200 GPU's (25 V1's x 8 GPU/V1).

For now, we are just mining ETH since this is how they've been configured. We are testing XMR now and looking at using NiceHash to mine the most profitable coin and get paid in BTC.

We are using SimpleMiner for the GPU rigs and still just doing remote access with TeamViewer for the ASIC's. We will eventually need a better system to remote manage, esp. as we get larger with more hardware. But for now this is working.

We have not plugged in our 19 V2's yet (12 GPU/V2) since we don't have enough cable run at the moment. We are planning to get that done next week so we can get those machine running asap.

One funny thing happened. The contractor that I had to fire showed up with an updated invoice. He claims he did about 90% of the job at the time I fired him and he wanted me to sign off and pay the invoice. He did a maximum of 60% of the project leaving us with lots of unfinished things (finish bathroom, entry hall w/door, electrical room door, vent install, etc).

I told him to F*ck off. Gotta love contractors...

 

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[GlobalWealth]

This past week has been really cool seeing the mine coming together and working.

My son is working hard optimizing all of our GPU hardware with new software and testing different coins.

So far we are still mining ETH, but most likely will be switching away to NiceHash next week.

I learned the hard way not to mine to a Ledger Nano S.

If you are mining any type of coin, don't use a Ledger Nano S for your mining address. The problem is that the Ledger cannot deal with so many micro transactions.

With my ZEN pool, I get paid out when it reaches .1 ZEN. I'm getting payments every few minutes....24 hours a day...7 days a week. It's a lot of transactions and Ledger cannot handle it.

Depending on what you are mining, you need a different wallet for this. For ZEN, I switched over to Arizen.

Luckily I was able to recover my Ledger wallet with Coinomi and move all my coins over to my Arizen wallet, but it was a PITA and time consuming. Lesson learned.

I have also learned that the Bitmain Z9 hardware is rock solid even overclocked 40%. They just work. I have not had to do a hard reboot on one yet.

With the Innosilicon A9's, we do a hard reboot on at least one machine per day on average.

The profit/kwh is still better on the A9, but it requires a bit more maintenance.

I am ordering some wifi smart plugs for the miners next week so I can at least do a remote hard reboot.

 

[GlobalWealth]

One more interesting thing I learned with ZEN is setting up nodes.

The ZEN foundation distributes coin payout 70% to miners, 10% to secure nodes, 10% to super nodes, and 10% to the Horizen foundation.

Last week I set up 6 secure nodes.

To set up a secure node it requires you to stake 42 ZEN, then host the node software on a Linux server.

The payout right now for a secure node is about 1.4 ZEN per month.

That does not sound like much, but it amounts to effectively a 3.3% MONTHLY dividend.

My total hard cost is about $3 per month to host the server, so that drops my dividend down in USD terms to about 2.9%.

It's not a huge cash generator, but it only takes me about 30-40 minutes to set up the node and my cost is only about $3/month.

So this is going to become an extra from the mining. Right now I am creating enough ZEN to build a secure node every other day. We are going to allocate some resources toward hardware purchases and some toward nodes every month now.

But I can conceivably have at least 50 secure nodes running by early next year.

As for super nodes, they require 500 ZEN to stake and the hard cost is about $10 per month for the server necessary to run one. I've done the math, and right now, even with the additional cost of running about 12 secure nodes for every 1 super node (42 ZEN vs 500 ZEN), the net profit is still about 30% higher to do the secure nodes. But that can change based on how many people are in each pool.

 

[AlexVilch]

Hey, I am currently doing master nodes only, I have 5 zcoin masternodes, but I will look into horizon. Do you know any other masternodes that are worth checking out?

Also if you are looking for investments or partners for your mining venture, I am exploring an option of starting a massive farm here in Canada

 

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[GlobalWealth]

Hey, I am currently doing master nodes only, I have 5 zcoin masternodes, but I will look into horizon. Do you know any other masternodes that are worth checking out?

Also if you are looking for investments or partners for your mining venture, I am exploring an option of starting a massive farm here in Canada

We would take a maximum of 4 investors at this time with a 50k minimum.

We are not investing outside our own project though.

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[GPM]

Speaking of Canadian mines, they just built one in Medicine Hat, Alberta. They say it mines 20 bitcoin a day currently, and "can consume more than 60 megawatts of power".

I guess it uses the same amount of power as the small city of 63,000 people. Not too shabby

 

[Knugs]

This thread takes me back to end of 2013, when I started my first little farm with 3x R9 290x. I had to shut the farm down, because 0.24/kwh was pushing me into loss.

Btw, when that price hit 19k/BTC, I found 0.5BTC left in my wallet.

The problem I have with mining is the hash difficulty, uncertainty and inability to plan long term. I was lucky with my purchase choice, because the R9 290x still continues to perform very well in hashrates for most coins (30% profit). The cards are also still alive 5 years later, powering the PC I'm writing this from.

The shitty GPU, cheap and high ROI cards all went bust. I remember when ETH hit that new difficulty and the entire market was flooded with GPU rigs because no one was making a profit anymore.


So to make assumptions and forecasts even 6 months down the line is extremely risky. And it becomes even more risky when you are reinvesting your profit into the same hardware. All it takes is an increase in difficulty and you postpone your ROI another 6 months.

The next uncertainty is the life span of the rig. An A9 goes bust before the ROI after cost and you made a life long loss.

On the other hand, you have really good kwh price. Fingers crossed you dont run in any of those issues.

 

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[GlobalWealth]

The sh*tty GPU, cheap and high ROI cards all went bust. I remember when ETH hit that new difficulty and the entire market was flooded with GPU rigs because no one was making a profit anymore.

No doubt. About a year ago an RX580 was around $1000 or more. Now you can get them for around $350. I would definitely not want to be one of the people doing a hardware speculation in this market.

So to make assumptions and forecasts even 6 months down the line is extremely risky. And it becomes even more risky when you are reinvesting your profit into the same hardware. All it takes is an increase in difficulty and you postpone your ROI another 6 months.

This is the tricky part. Since difficulty is a function of the number of miners on the network, it is impossible to predict how this number will fluctuate.

Since the crypto markets have stagnated, ZEN difficulty has basically gone flat. That's good for us, but who knows what it will be tomorrow.

 

[GlobalWealth]

Updates:

We are still in somewhat of a battle with both our contractor and electricians.

The electricians claimed to have sent us the final bill, but in fact didn't. They made the bill net 10 days payment terms, which we had not agreed to or had any contract.

When the bill was due, according to their records, we had not paid. Of course we didn't actually have the bill anyway so we couldn't pay, but when the bill was one day late they called our landlord and threatened to remove the power panel and cabling.

I was furious and exploded on the electrician and his boss. The boss apologized and said that should never happen.

Three days later the boss emailed me threatening that if I didn't pay within 3 days he was going to take legal action.

I am not a pushover. In fact, I'm more of a push back.

So I emailed him telling him to take legal action because it would give us another year to pay the bill since I am familiar with the legal system in Estonia (I did my master's in law in Latvia - similar legal system).

Surprise surprise he softened his tone and wanted to work out a payment plan.

I took this as an opportunity to stretch out our cashflow so I offered to make 3 payments over 2 months. He agreed.

LOL

 

[GlobalWealth]

Updates:

Last week we installed 8 more cables with 8 PDU's giving us more than enough capacity to plug in the remaining 25 V2's (12 GPU's per V2).

As of Sunday we now have all hardware at work.

The GPU rigs are currently mining ETH, which is not that profitable at the moment, but they were already configured for this and we are trying to get it all up and running as quickly as possible.

Over the this past week we ran more tests with XMR and it looks like the gross profit is not much different, but it is about a 20% power savings to mine XMR over ETH.

We will test a bit more but most likely get it switched over soon.

All of the A9's, Z9 minis and L3's are running fine and all still profitable.

 

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[GlobalWealth]

Update:

I haven't posted in awhile, but not because we aren't working.

We've been very busy with the mine project.

As I'm sure you are all aware, crypto prices have tanked over the past few months. Just like any other miner who pays his rent and power bill in fiat, it has affected us.

However, there have been some big positives as well.

We made some changes with our power company and our electricity cost per kwh is VERY, VERY low. In fact, probably the cheapest in the world.

This has given us the ability to continue to mine where others have needed to shut down.

And because of this, mining difficulty has decreased in the past couple of months meaning we are stacking "coin" much faster than 2 months ago.

Of course, in fiat terms, it is not a breakeven, but our coin production is up a lot since we started.

And since our rent and other hard costs are very low, we are able to continue to mine profitably.

As of today, I am negotiating a deal to buy out another mine that has 100 bitmain L3+'s.

At their cost per kwh, they are at a breakeven so they have shut down.

But for us, the net profit, even at today's current prices, is about $50/L3+/month after power.

The seller is asking $150/L3+ incl. PSU, but he has zero offers. I offered $100/L3+ incl. PSU, or 10k.

With the other additional costs for installing the equipment, my payoff on this investment will be about 2.5 months.

The lessons I've learned in this process are;

• Cost of electricity is critically important
• Firesale deals can be found in down markets if you have cash
• F*ck gpu mining (seriously, F*ck those machines)
• I am now a self-designated honorary electrician and network administrator
• Everything can be learned

Oh yeah, and F*ck gpu mining.

 

[GPM]

Tell me more about gpu mining! I am curious as to why you hate it so much

Nice deal on those fire sale miners, interesting development

 

[Nigel B]

So what your opinion on GPU miners

 

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[Roli]

Update:

I haven't posted in awhile, but not because we aren't working.

We've been very busy with the mine project.

As I'm sure you are all aware, crypto prices have tanked over the past few months. Just like any other miner who pays his rent and power bill in fiat, it has affected us.

However, there have been some big positives as well.

We made some changes with our power company and our electricity cost per kwh is VERY, VERY low. In fact, probably the cheapest in the world.

This has given us the ability to continue to mine where others have needed to shut down.

And because of this, mining difficulty has decreased in the past couple of months meaning we are stacking "coin" much faster than 2 months ago.

Of course, in fiat terms, it is not a breakeven, but our coin production is up a lot since we started.

And since our rent and other hard costs are very low, we are able to continue to mine profitably.

As of today, I am negotiating a deal to buy out another mine that has 100 bitmain L3+'s.

At their cost per kwh, they are at a breakeven so they have shut down.

But for us, the net profit, even at today's current prices, is about $50/L3+/month after power.

The seller is asking $150/L3+ incl. PSU, but he has zero offers. I offered $100/L3+ incl. PSU, or 10k.

With the other additional costs for installing the equipment, my payoff on this investment will be about 2.5 months.

The lessons I've learned in this process are;

• Cost of electricity is critically important
• Firesale deals can be found in down markets if you have cash
• f*ck gpu mining (seriously, f*ck those machines)
• I am now a self-designated honorary electrician and network administrator
• Everything can be learned

Oh yeah, and f*ck gpu mining.

Thanks for the update! Have been thinking of you lately, what with all this crypto blood on the streets!

 

[GlobalWealth]

Tell me more about gpu mining! I am curious as to why you hate it so much

Nice deal on those fire sale miners, interesting development

They require constant maintenance like cleaning risers and boards, they need frequent updates, they never perform at our near their peak hash rate, they take up a ton of space, they use way more electricity than asic,...... I could go on and on.

Seriously though. I can manage 500 ASICS from an app on my phone across the planet.

GPU rigs require constant hands on attention.

Sent from my VTR-L29 using Tapatalk

 

[GlobalWealth]

Thanks for the update! Have been thinking of you lately, what with all this crypto blood on the streets!

Blood in the streets is the scariest time to invest in any asset class. It is also usually the best time to make money.

I made a killing in 2008-10 in the stock market when no one wanted to touch stocks.



Sent from my VTR-L29 using Tapatalk

 

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[GlobalWealth]

The seller is asking $150/L3+ incl. PSU, but he has zero offers. I offered $100/L3+ incl. PSU, or 10k.

Just a quick update here.

The seller originally wanted eur150 per L3 incl PSU.

I asked for a better price and he said eur145.

I offered eur100.

He told me to politely F*ck off.

I told him to let me know if he wants to counter my offer, otherwise - take care.

He just texted me this morning offering eur130 per L3 incl PSU.

Right now that is about a 2.5-3 month payoff at our power cost, so I'm probably going to do that.

This will put us at the following:

• 14 A9's
• 12 Z9 minis
• 108 L3+'s
• 160 GPU's

We actually have more GPU's than that, but we will be at our power capacity so I am going to sell the GPU equipment.

 

[GlobalWealth]

Quick update.

I just bought 80 Bitmain L3+'s for $85/e incl. PSU. Shipping cost is being finalized today or tomorrow but will run around $15/e.

At my power cost, my monthly profit per L3+ is about $50/month/machine (after power). So not huge money, but the payoff even at this rate is about 2 months (incl the extra cost of infrastructure: shelving, PDU's, power strips, cable, etc).

 

[GlobalWealth]

Update.

It's been awhile since I updated this thread and thought it was time. As many of you are aware, crypto has been on a wild ride for the past 18 months.

With BTC going up to $19k, down to $3k, now back up to $8k, it's not a business for the weak stomach.

From the last update, I said we bought 80 Bitmain L3+'s. Actually we ended up buying 100.

Now are are running the following hardware:

• 106 Bitmain L3+'s (mines LTC)
• 12 Bitmain Z9 minis (mines ZEN)
• 14 Innosilicon A9's (mines ZEN)
• 2 GPU rigs with 12 gpu's per machine (mining XMR)

In addition to that, we are using the accumulated ZEN to build out Supernodes - we have 8 right now (probably building out #9 later this week).

Buying those 100 L3+'s turned out to be epic timing. We paid about $100 per unti, incl the psu and shipping, import duties, etc.

When we bought them, LTC was around $30 and mining operations where shutting down L3+'s since profitability was marginal or non-existent. That gave us firesale prices.

We've had the L3+'s running now for just over 2 months and they've already paid themselves off.

We are now taking profits from the mine personally with a monthly dividend paid in crypto.

From the perspective of the ASIC hardware, we are at or very near breakeven after 9 months.

With the GPU hardware.....well.....F*ck them.

Here are some pics for those interested in the visuals.

 

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[ZCP]

@GlobalWealth email me a sketch of your floor plan and the direction of your fans on the units and what other fans you have and we'll take a look at your airflow / cooling and see if we have any suggestions..... some baseline temp readings on and around would be helpful as well.....

 

[Davidla]

Update.

Buying those 100 L3+'s turned out to be epic timing. We paid about $100 per unti, incl the psu and shipping, import duties, etc.

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@GlobalWealth Awesome news. How did you end up getting them around $100/unit v.s. the original asking price of $150/130?

 

[GlobalWealth]

@GlobalWealth Awesome news. How did you end up getting them around $100/unit v.s. the original asking price of $150/130?

Mad negotiation skills

Sent from my VTR-L29 using Tapatalk

 

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[GlobalWealth]

@GlobalWealth Awesome news. How did you end up getting them around $100/unit v.s. the original asking price of $150/130?

Technically I got them for $85/unit incl the PSU, but with shipping and import duties the cost was about $100.

 

[GlobalWealth]

@GlobalWealth email me a sketch of your floor plan and the direction of your fans on the units and what other fans you have and we'll take a look at your airflow / cooling and see if we have any suggestions..... some baseline temp readings on and around would be helpful as well.....

If you look at the image with the huge yellow/black fan, there are 2 large windows that we removed from the frames. We put in metal screens and a filter on top so the fan pulls in outside air from those windows.

That huge fan blows directly toward the shelving with all the ASICS on it. The ASICS are situated with the intake fan side on the side of the huge fan. So the huge fan blows towards the miners, then the intake fan on the miners pulls air into the machine, and the exhaust fan blows out the other side.

If you see the image with the insulation board, we installed this board so that each miner has a hole cut out and the miner is pushed through the hole. This keeps the cooler air on the intake side, and the hot air on the other side of the heat wall.

We have "doors" on each side of the shelves so that the heat does not just go back around the shelving and intake hot air into the miners.

From there the hot air goes up and over the 2.5m wall.

There are some things we could (and likely will) improve.

We will most likely add a 2nd huge fan, and possibly a 3rd.

We are considering an exhaust fan on the roof to suck the hot air up and out.

Right now the temperature in the room (not the "hotbox" side) is around 25-30c. On hot days it can get to about 35c in the room.

The chip temps on the miners range from 64-71c. Board temps are about 10c lower.

We have almost all of the L3+'s overclocked right now and we are averaging around 600MH/s.