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

[GlobalWealth]

Update on the L3+'s.

I have overclocked all of the L3+'s also. I'm getting around 600mh/s. I set the frequency at 462mhz. Like with the Z9's, I will be testing different frequencies to find the best profitability.

 

[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.

 

[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]

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.

 

[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]

Do your extension cables get warm at all? I notice that you have them all stacked on each other on the floor there. Sometimes those can get warm, and even spacing them out a half inch can stop them from adding to each other.

Love the pics! I was curious as to how this was going. Awesome to hear you have just about paid our equipment off and are starting to take some money (crypto) out.

Those are not extension cables on the floor.

Those are high voltage cables hard wired into the panel and rated at 32a.

Each breaker on the panel is 3 phase 50a so we are not pushing capacity there.

Those cables are operating at an average of about 25a each.

Each PDU is also rated to 32a.

We are running very cool actually.

It took some tweaking especially with the power strips but we finally sorted it out.

Sent from my VTR-L29 using Tapatalk

 

[Zhyna]

Loved following this thread @GlobalWealth. Hows the new project coming along with bulls coming back to play?

 

[MTF]

But I sold my half of the biz to my partner earlier this month so I'm out.

Could you share why if that's not private?

 

[Gepi]

Posting for following.

 

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[garyfritz]

That spreadsheet looks mighty attractive. $6000 / mo out within a few months!? Wow. That's with 12 Z9's, so you'd have an initial outlay of $24k plus any additional infrastructure.

I'm half tempted to set up a few miners in my basement. It's cool down there. During the summer I could vent the excess heat to the outside; during the winter the power wouldn't cost me much of anything, because the miners' heat would reduce my heating bill. The miner profitability calculators say you net over $400 / Z9 / month, given $0.12/kWh for my local power. That pays for the miner in about 5 months. If you could set one of those up and just let it churn out money, that would be awesome.

But the thing that's always stopped me is... don't these miners have a very limited lifespan? Doesn't the problem difficulty increase so fast that a miner is basically obsolete within a few months? How much of a productive lifespan do you get before the miner chews up more power than it's worth? I got the impression the miner value tended to go to zero just about the time it paid itself off, so you're always on a hamster-wheel of trying to squeeze out profits before the miner loses its punch.

But I don't see any ongoing miner-upgrade costs in your spreadsheet. So you're planning to run the miners for months, producing a more or less constant income??

 

[garyfritz]

But an extra $25 per machine times 400 machines is 10k per month. That's not insignificant in my book.

No, it's not. But given my example numbers, that would be an additional $10k on top of $160k per month. Would you really notice the extra $10k in that case? Would it be worth setting up in Estonia, especially if you didn't have a partner there? Maybe so, but by that point you'd be pretty comfortable either way.

I hope you get there.

 

[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]

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.

Sent from my VTR-L29 using Tapatalk

 

[James Fake]

@GlobalWealth - any thoughts on the halving as it pertains to your operations coming up in the future?

 

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[EdKirby]

@GlobalWealth This was a fascinating read. Thanks! Any news over the last several months?

 

[EdKirby]

Thanks for responding!

If you’re still amenable to answering a few questions I’d like to know a little bit more about your experience in the mining biz.

Without getting too personal, would you do it again?

I’m curious about mining Ethereum. I’m a computer geek and building a GPU mining rig seems like it’d be fun. You said throughout the thread that you hated GPU mining but from what I understand Ethereum is ASIC resistant and GPU mining is the way to go with it. Can you comment on that? What’s been your actual experience between using the two technologies?

Thanks again, this was an interesting thread.

 

[GlobalWealth]

View attachment 36577

See there...I knew you were trolling me...