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The Reality of Hosted Bitcoin Mining: My S21 Pro Experience
4425 sats \ 13 comments \ @m0wer 7 Jul bitcoin_Mining

The Setup

Back in May, I decided to dip my toes into Bitcoin mining. Bought a Bitmain Antminer S21 PRO (234 TH/s) for 0.04659424 BTC (€4,315 including shipping) and arranged hosting in Dubai. The numbers looked decent on paper - 0.075 USD/kWh advertised rate, professional hosting facility, what could go wrong?

The Numbers Don't Lie

Purchase: 0.04659424 BTC (€4,315 including shipping) Setup & Deposit: 0.00504895 BTC ($522.87) June Power Bill: 0.00160614 BTC ($171.85) for 1,937.52 kWh Total Mined: 0.00218297 BTC Net Profit for June: 0.00057682 BTC (36% of hosting costs)

What Actually Happened

The problems started immediately:
  • Delivery delays: Almost a month to get delivered and plugged in due to "no hosting spots available"
  • Hidden costs: That 0.075 USD/kWh rate? They add a 10% margin on factory wattage specs (3,510W becomes 3,861W or 0.075 USD/kWh becomes 0.082 USD/kWh)
  • Temperature issues: Hosting site probably runs hotter than the advertised 35°C
  • Payment friction: Monthly invoices payable in USDT only (shitcoin²)
  • Management fees: Additional $12/month on top of everything

The Hardware Failure

Three weeks in, one board stopped working. Went from 234 TH/s to about 67% capacity, then completely died. Now I'm waiting 2+ weeks (and counting) to get it shipped to Bitmain for warranty repair.

The Math Reality

Even before the hardware failure, ROI in Bitcoin terms was looking grim. Just ahve a look at Smoking Hopium calculator.
It's hard to compete in Bitcoin terms with people that are just looking for profitability in USD.

The Silver Lining

At least I get to use my own pool (Ocean with Datum, so my Bitcoin node builds the blocks). That's pretty cool and my main motivation for having some decent hashrate.

Lessons Learned

  • Stay humble, stack sats
  • Hosted mining has way more friction than advertised
  • If I ever mine again, it'll be a home setup with solar (thinking Avalon Q or similar)
  • The hosting company's incentives aren't aligned with yours
  • Hardware failures happen

Would I Do It Again?

Nope. The complexity, hidden costs, and lack of control make hosted mining a poor choice for most people. You're better off just stacking sats directly.
If you're considering hosted mining, factor in:
  • 10-15% higher power costs than advertised
  • Inevitable hardware failures
  • Payment processing friction
  • Management fees
  • Shipping delays and logistics headaches
The only scenario where I'd mine again is with my own equipment, my own power (solar), and my own facility. At least then when things go wrong, I can fix them myself.
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107 sats \ 0 replies \ @Scoresby 7 Jul
Great write up and thanks for sharing your experience. It seems like hosted mining is not so different from cloud mining. I had toyed with using one of these hosted services and I probably would have if I hadn't decided to DIY my own mining setup (which I then promptly procrastinated on and so did neither).
The search for an easy, self-sovereign way to get some hash power continues...
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71 sats \ 0 replies \ @BlokchainB 7 Jul
As a customer of compass mining for about 4 years now everything you explained I been through and then some.
Getting into mining has definitely made me much poorer but something are more about principle than making profits. So I stubbornly still mine with compass.
Will it pay off? Probably not but I don’t really care. Supporting the industry is my number one priority across the board!
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27 sats \ 1 reply \ @megaptera 7 Jul
I made the exact same experience. Its just not worth it if you cannot do everything on your own.
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0 sats \ 0 replies \ @m0wer OP 7 Jul
F
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23 sats \ 1 reply \ @WeAreAllSatoshi 7 Jul
That’s quite a “dip my toes” haha thanks for the write up though. Ive never done hosted mining
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50 sats \ 0 replies \ @m0wer OP 7 Jul
I think it's actually some no-man's land. Home mining with a BitAxe is a lot of fun and enough to learn. And then getting 100s of full sized ASIC miners must be nice as well. But getting just one is having all eggs in the same unreliable basket and ends up being like playing the lottery.
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0 sats \ 0 replies \ @4dcfa2e179 25 Jul
I truly appreciate the transparency, this really shows how tricky mining can be beyond the surface numbers. Definitely not as passive as people think, just saying though.
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0 sats \ 2 replies \ @Catcher 10 Jul
Have you considered or had any experience with https://www.sazmining.com or blockware solutions?
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0 sats \ 1 reply \ @m0wer OP 10 Jul
No. The electricity price with sazmining is great. But there's a ~20% import tax/fee that you wouldn't have in UAE. So more or less equivalent after all. Still, I think depending on others for mining is not cool and sets weird incentives.
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25 sats \ 0 replies \ @Catcher 10 Jul
Well, if you are sending the rigs to DC, you are still relying on others, but I get your point. I'm playing with the idea of low cost miner from 2023 that can get you KYC free sats at blockware solutions, something like 200k sats for miner that brings you 160k sats a month for 160USD hosting costs. Seems like same like DCA, but KYC free and if the price appreciates faster than hashrate you can still benefit. Maybe I try it and post about my experience here
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0 sats \ 0 replies \ @MAKESONGSLONGER 8 Jul
This story sounds familiar... 🤔 Oh yeah, it's our story and why we started Rigly!
TL;DR: Our founder got rugged a couple times trying to mine.
Sorry about your luck, glad you shared though in detail what happened because we hear this a lot. People are often suspicious of us because they've already been rugged by hosted and cloud mining. We're neither of those; we just sell hashrate.
We sell fixed-return mining when we can. (It always sells out when we get new lots).
We also throw block parties and try to solo mine as a group to hit a block. We use CKPool for that. But otherwise, you're welcome to use whatever pool you want when you buy hashrate from us. You're also more than welcome to join our Alliance of solo miners for the next block party on July 19! We'll happily accept another S21. 😉
Our story: https://rigly.io/learn/rigly/our-story
Our block party: https://upendo.rigly.io/
How the latest block party went (full post coming soon): https://primal.net/e/nevent1qvzqqqqqqypzqh4nl2ld8qq00kxzxlh5khzk7k82zmjf07k5pn7awska6u66qv7dqqszq33n57ppxu0rsuuj8cday5zaqrxfqc0lj7g2nnpkypvqtu59als37vnpv
How we make solo mining fun: https://primal.net/a/naddr1qvzqqqr4gupzp87w8t4r9v6kx7pcldzmwklryk2hgtskhvlywskvs2an658epplxqpp8g6r9943xjarrda5kuttdd9hxjmn894ex2mnpd9ehxctwvdjj66r0wukh2ur9dejx7ttfwvkkwctdd9n8j6twvukhxmmvdukk66twd9hxwysuxh3
We still have 100 TH/s available on fixed return mining from East Coast ASIC in Wichita, KS: https://rigly.io/fixed-return
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0 sats \ 1 reply \ @anon 8 Jul
How could you use your Datum gateway? I'm assuming you have it running in your home, so were you allowed to connect to your miner in the hosting company somehow?
I have been investigating about hosted mining too but haven't still pulled the trigger. Thanks for the writeup.
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0 sats \ 0 replies \ @m0wer OP 8 Jul
See https://github.com/OCEAN-xyz/datum_gateway/pull/115 for running a datum server connected to your bitcoin node.
I just provide my datum address to be used as the primary pool and have a solo pool as a secondary for turning downtime into lottery tickets xD
The hosting guys don't care, you just send them a list of pools and they configure it.
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