So as mentioned in my about why I got into hosted bitcoin mining, I need to invest my capital of around $200k by the end of the year 2021, and it is already end of November now. The problem is availability of hosted miners and facilities. Most of the companies don’t have any space available and the next available connection dates are Q1 2022 or later.
I reached out to some of the main players in the industry asking for a quote. These are companies like Compass Mining, Wattum Management, Blockware Solutions and Frontier Mining. For all of these you can find some online reviews as being trustworthy real companies and not scams. And all of these promptly replied. I also reached out to Vbit Mining, more sketchy looking company without any real reviews. But these guys never replied to my request for a quote.
UPDATE: My experience after 3 months has just been published
Wattum Mamagement hosting miners offer
In any case, the only ones who said they have some availability with connection date in 2021 were Wattum Management. I hopped on a call with one of their reps – Ishan. Ishan was super helpful, answered all my questions on the call, and after the call finished he sent me an official quote. With miners prices increasing pretty much weekly, and no availability from any other companies, the quote was slightly higher than I expected.
These are the miners he had available for me:
- Avalon 1246 85TH, Live December 15th 2021: $9,582
- BitMain S19j Pro 100 TH, Live December 30th 2021: $13,210
On the other hand, Avalons average price per TH was $113, while Bitmains $132. And because I really needed these to be live by end of year due to tax write-offs, I did not want to risk it with BitMain S19j. The internet is full of comments from people experiencing several weeks or months long delays in deliveries. So I decided to go for the Avalons, and order 10 pieces for a total of $95,820.
Wattum offer hosting costs details
If I wanted to have my miners connected by the end of the year, I have to use Wattum’s Russian hosting center. It is a big risk. Nobody knows what will happen in Russia as to mining in the future. But since I didn’t have much more options, I decided to go for it. The hosting rate they offered is $0.075/kwh, which is similar to what other large providers charge. Compass Mining charges around $0.065/kwh for example. So not the best deal out there, but not the worst either.
Profitability and ROI of my Avalon 1246 miners
Calculating ROI of hosted bitcoin mining is not as easy as it sounds and I will do a completely new article on that. There are however several online tools which can help. One of the most popular is Asicminervalue.com. Plugging my info there, I get this result:
Based on my electricity price and current BTC price, I should make around $28 per day per 1 miner. Which means I should have ROI of 340 days, which is a little less that 1 year. This model however misses one important factor – increasing mining difficulty.
That is why I like the BTC.com model much more. It takes into consideration difficulty increase, but also you can adjust the BTC price. So if I assume that the difficulty will increase on average 2% every 2 weeks, and BTC price will be $100,000 in December 2022, these are the results I get:
With these assumptions, I should get my money back in 305 days, instead of 340.
With that being said, calculating BTC hosted (and really any) mining is hard and depends on many assumptions. The 2 main ones being the change in mining difficulty and the change in BTC price. Nobody really knows what the BTC price will be a week, month, year or 5 years from now.
Timeline of Wattum miners deployment
I started to talk to Ishan from Wattum Management on November 1st. He immediately confirmed the availability for Mid December for the miners. In the next 2ish weeks I was talking to other companies tried to find better deal, but really couldn’t find anything.
I confirmed and paid the order on November 15th. And I thought I will have to wait now several weeks to hear anything from Wattum. To my surprise, just 2 days ago on November 23rd, I got email from Wattum that my miners have successfully arrived at their hosting facility. And they need to unpack and inspect them, take pictures and then they will connect them.
So far all looks good with Wattum. Their team is very professional and quick to reply. I have noticed that being a common opinion on different Reddit threads too. I will give an update once the miners are connected and mining.