1000 sats \ 10 replies \ @BTCMiner 13 Dec 2022 \ on: Best Mining Setup bitcoin
Are you doing this for entertainment and/or as (an expensive) hobby? Or maybe you are just trying to obtain KYC-free sats (even if it comes at a significant premium over spot price)? Or instead are you considering mining as a profitable endeavor?
Knowing the answer to the above will help in getting responses that might be more helpful.
Many people think mining will earn a profit. But bitcoin mining is a very competitive field, and your ability to compete pretty much correlates to the amount you pay for electricity. You are competing against the miners in Paraguay paying $0.03 per kWh for their power that comes from hydroelectric generation. An (obsolete) S9 rig might not even break even on $0.03 per kWh. Mining on an S9 at $0.14 per kWh (the current "residential average" paid in the U.S.) means you are paying well over $100K USD per bitcoin, unless you are making use of the exhaust heat (e.g., home heating) where the cost for the heat would have expended anyway, thus lowering that marginal spend for running the rig.
Thank you for asking this. I'm not worried about KYC for obtaining sats, but would most certainly like to turn a profit. I really don't know much about mining at all to be honest. Looking to learn as much as I can so this is very helpful, thank you. If I'm understanding you correctly, it sounds like mining for profit will be a prohibitively expensive endeavor unless I can find a way to get the average energy cost down significantly, or offset that cost by using the exhaust heat in a way that reduces another cost. Sounds like cheap energy is the name of the game?
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Sounds like cheap energy is the name of the game?
Yes. Cost of electricity for residential use in the U.S. can vary from $0.08 per kWh in areas where there is excess hydroelectric power, for instance, to $0.30+ per kWh in areas like California and Hawaii. And it isn't your "average" cost per kWh, it is your "marginal" cost per kWh that matters. For instance, in many regions, billing for electricity is "tiered", ... so essentially the more electricity you consume the higher you pay per kWh. For example, with So-Cal Edison:
Tiered Rate Plan
https://www.sce.com/residential/rates/Standard-Residential-Rate-Plan
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Oh wow, this is extremely helpful. Thank you. It sounds like I shouldn't even be worried about what kind of rig I'd be using until I figure out the energy cost. It sounds like either finding a really efficient way of offsetting the cost, or setting up a rig out of state, may be my only options here. Haha you may have just saved me a lot of money. Thank you!
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i recommend a futurebit apollo as a great way to learn and have a full node all in one miner.
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Surely you jest.
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ha! no seriously. it doesn't require electrical work. can run a full node, is basically silent and gives a lot of opportunity to learn
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Just looked it up, thank you. This looks very user friendly. I would think that it would still be subject to the same energy cost restrictions that @BTCminer was talking about, wouldn't it? Once I get the energy cost situation figured out, this looks like a great place to start. @BTCminer, do you disagree?
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That's why I was asking your intention first.
If you want a hobby, then maybe dropping $600 on this device is something you could justify -- maybe even show it off to the visiting relatives over Christmas. But if you are trying to "turn a profit", then this device won't help with that, and depending on your cost per kWh, there might not be any bitcoin mining device available to you that will.
That's why people buy hardware that is operated by a commercial bitcoin mining operator that has access to cheap electricity and that will host and manage your equipment.
HashBranch is a service that matches people with hosting facilities.
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Thank you for explaining, that makes a lot of sense. Definitely not looking to lose money on a hobby, so I will definitely look into this hosting service, thank you!
I see that the hashrate for this $600 Apollo is in the range from 2 TH/s (ECO mode) to 3.8 TH/s (Turbo mode).
For reference, a $150 Antminer S9 does 14 TH/s.
At the current difficulty level, (which reflects total network hashrate around 250 EH/s), this Apollo device in Turbo mode will produce about 1,400 sats per day (an amount worth about $0.25). Or about $7.50 per month.
Even if you paid nothing for electricity, and difficulty didn't increase from here, and the BTC/USD exchange rate stayed at ~$17.5K, it would take you mining using this for six and a half years for it to return the $600 capital expenditure you made for this device.
The 200W (Turbo mode) will consume 4.8 kWh per day. If you pay the U.S. residential average of $0.14 per kWh, running this device will cost you $0.68 in electricity per day.
So, to EARN $0.25 in bitcoin this device costs you $0.67 in electricity. Thus a NET LOSS of $0.42 per day.
Thus there is NO CHANCE of "break even" (i.e., recovering your Cap Ex spend). You are losing money every single second this device is operating, and the longer you run it the deeper in the hole you go.
Now if you put $600 into buying bitcoin instead, you would have 3.4M sats. If you just sit on that, then six and a half years from now you will still have 3.4M sats.
Compare that to trying to mine using this Apollo for six and a half years where you will simply have just finally recovered the $600 you had spent on the device. And again, those numbers are assuming that the bitcoin network hashrate does not increase from here. As that increases (which it has, year over year, since 2009), this device mines less and less bitcoin per day.
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