Is Bitcoin mining ‘silver’? Bitcoin mining farm owner reveals the cost of electricity, machinery and profit

Tram Ho

With the Bitcoin price hovering around $30,000/BTC, quite a few people have the feeling that they missed the opportunity to enter this market sooner. However, if they join now, they themselves feel the “smell” of risk in an asset that can go up and down by 50% in just a few months.

That’s why JP Baric, CEO of MiningStone, chose to invest in Bitcoin mining, rather than trading this digital currency. The type of machine he uses, the Antminer S19 pro, retails for about $10,000, with a lifespan of about three to five years, he said.

Baric has been interested in mining since high school in 2013. However, at the time, Bitcoin mining was out of his reach as it required expensive ASIC machines. So he started his “career” of mining by mining litecoins using GPUs located in his parents’ basement.

Đào Bitcoin hốt bạc hay không? Chủ trang trại đào Bitcoin hé lộ chi phí tiền điện, máy móc và lợi nhuận thu về - Ảnh 1.

JP Baric – CEO of MiningStore.

“I sat at school and read TechCrunch and knew this digital currency was going up in 2013. I thought I could make money and that was amazing.”

At the time, he ran a “robot summer camp” where he taught children how to build Lego robots and program them. He told Business Insider that any money he earns from his part-time job, he spends on buying crypto mining hardware.

In 2016, he was able to start mining ethereum after combining his capital with money from family and friends to buy 300 graphics cards. This allows him to earn around 500 ether per day.

Baric set up ether mining rigs in a second-hand clothing factory he rented for lower electricity costs. “I had to drive about an hour and a half from the school in Raleigh to the mining farm, which was an old yarn mill where they made the clothes,” Baric said.

Currently, he owns 3 Bitcoin mining facilities in Iowa, Colorado and Oklahoma (USA) with more than 3,000 Bitcoin miners, including his own and mining on behalf of customers.

According to Technavio, a global market research firm, Baric is entering a $2.8 billion global cryptocurrency mining hardware market, with an annual growth rate of more than 7%.

In an interview with Insider, Baric detailed what you need to know about Bitcoin mining and how you can operate your mining rig.

Cost versus profit

The first step to determining profitability is to examine the cost of electricity, which accounts for about 80-90% of the ongoing costs of a Bitcoin mining rig.

Baric said: “If you’re thinking of running a Bitcoin miner at home, you have to check your local electricity bill. Normally, electricity is billed in KW/h. I believe $0.06. (about 1,389 VND) per KW/h is a good price for you to exploit at home”.

For example, Baric’s mining facility in Iowa is paying for electricity at $0.04 per KW/h because it’s an industrial area, which charges a cheaper rate.

The second step is to check the power consumption of the miner you plan to buy. You can find this data on the manufacturer’s website. Each model will have different power consumption. For example, the S19 has a capacity of 3,250W, equivalent to 3 microwave ovens.

Đào Bitcoin hốt bạc hay không? Chủ trang trại đào Bitcoin hé lộ chi phí tiền điện, máy móc và lợi nhuận thu về - Ảnh 2.

Bitmain Antminer S19 Pro Miner.

“So you need a dedicated outlet and a dedicated circuit in your home to run this machine. You shouldn’t plug other equipment on that circuit or plug,” says Baric.

He also warns users about buying mining equipment from unscrupulous platforms because there are a lot of scams. Some of the leading manufacturers in the crypto mining space are Bitmain, MicroBT, and Canaan.

When a person wants to mine Bitcoin, they will have to connect to a pool – a process that allows miners to share computing power and split profits in order to receive payments. The average fee for connecting to a pool is about 2% of revenue.

Baric uses a pool called Luxor but he advises people to research and review all available options before choosing a pool. You can find and view the discount rates of different pools on comparison platforms.

He also mentioned sites like CryptoCompare.com or ASIC Miner Balue to check the profitability of each machine, including estimated electricity costs.

Based on CryptoCompare calculations, including electricity, difficulty, and pool costs, an Antminer S19 machine currently generates 0.3204 Bitcoins per year. At $0.06 per KWh, the average electricity cost would be $140/month, resulting in a monthly profit of around $689. This rate is based on Bitcoin’s recent trading price of $32,141.72.

Baric’s company MiningStore also allows customers to purchase a mining machine (through them), then store it at their facility in Iowa. They deduct $0.04 for electricity and 20% of profits for mining services.

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Source : Genk