Cloud mining vs. own mining rigs
I was wondering what is more profitable - cloud mining or mining with your own rig.
Of course by nature an own rig should be more profitable because you have all the risks (e.g. hardware failure, environmental risk etc.) and all the effort (installing, heat and noise pollution etc.). But how much is it worth to me? Probably 10/20% of my earnings. That would work for me.
So I started by joining BitClubNetwork and bought 5x GPU Mining shares for 1k a piece.
First of all it is very intransparent. How much hashing power do I get? No clue ... Anyway it is a test so I pressed the "buy" button and moved on.
After an initial setup phase where you don't mine (used for setting up hardware I guess) you start getting your share daily. This is how my eth wallet looks like:
So around 0.0082 eth per day with 5x GPU shares at 1k each. That means 0.246 eth per month.
So how is an own mining rig is doing in comparison. Bought online here in Switzerland. Cost 4k for 160 mh/s hashing power. 6 GPUs.
Also it took several days until I recieved my hardware. After two weeks I got the package. Unfortunately damage - quick call to the shop sold the rig - few days later fixed (replacement). Taking mining rig up into operations has been very easy - all web based.
And here are the stats (estimated by nanopool calculator).
So basically I get 0.558 eth after 1 month. Wow that is a difference. Now trying to compare apples with apples here some alternate calculations:
By investment amount - normed to 4'000 USD (in my eyes the only relevant comparison):
BCN: 0.1968 eth (0.246 / 5'000 USD * 4'000 USD)
Own: 0.558
By GPUs
BCN: 0.246
Own: 0.465 (0.558 / 6 * 5)
Of course what you need to take into calculation is power consumption. That is about 1'500 USD / year for the rig. so per month 125 USD. At the current price of eth (1'300 USD) that is 0.1 eth per month giving us the final numbers (by investment)
BCN: 0.1969 eth
Own: 0.458 eth (0.558 - 0.1)
Which means the own rig is around 2.3x as profitable. You decide on your own if that it is worth for you to not handle the hardware on your own.
I haven't seen these options compared like this recently. Probably not ever before actually.
I can see benefits to mining on your own rig but, in terms of costs and fee structures, the cloud mining services have it all sewn up. You will only make money with them if the price jumps significantly on any one coin that you can mine.
I have seen some posts here on Steemit with guys setting up a Solar powered rig - that would cut down drastically the power-cost factor and maybe make mining crypto's a bit more profitable.
Depends on how cheap you got the solar panels and batteries. Solar is still pretty expensive, and you need to work out how much crypto you have to make to pay for the solar system.
Hi eroche
Thanks for your upvote and feedback.
I am not sure if I get your "but" correctly. I agree with cloud mining you will profit only from price jumps but than again you would be better off investing directly in the coin itself.
That is supporting the case for the own mining rig - correct? Or did I miss your point?
With respect to cloud mining
That is exactly what I think too. I did some analysis some time back on the fee structure of cloud miners.
In terms of owning a rig, there is quite a technical challenge for most people to own one, as well as electricity costs, space noise etc but I do see it as a very worthwhile learning experience (even if it's not very profitable) considering there may be coins in the future where mining on your own rig at home is feasable. Take steem as a case in point.
most cloud mining are just scam..
I agree - BCN doesn't look very trustworthy to me either. I just wanted to play with something.
That is why I am thinking of opening up an own mining venture where mining earning and fees are very transparent.
I think using self owned equipment and paying for the electricity is much better.. beside these cloud mining says the payout will take months.. using my own pc I can get weekly payouts.. if I have more budget and upgrade my hardware I can have much faster and bigger payouts
Hello. IMO most are indeed scam or at least badly managed. However, I think you were lucky by making the experiment using BCN. Unlike others they don't promise high returns but they usually overdeliver and you don't know how much hashing power you are buying because it's a crowfunding venture. You're not receiving profit exactly according to what you've bought but a share of all the mining done by all the hardware bought by all the members. Sorry, you probably know that but I decided to write it anyway because perhaps others don't.
But if you find a way to mine it yourself with profit, I think that is the best option. I like freedom :)
Cheers!
Cloud mining is just downright scary. Like clouds, they can just go poof! 🙄
That why i also plan to build up my own mining someday. But not here on the metro, ill make my brother mine crypto (ETH perhaps 🤗) in the province, where power costs are more cheaper.
I agree - we should work together. I am just doing that - building my own mining venture. Anyone who likes support is welcome.
I believe own mining will be a better option as we dont need to pay anything for the cloud service and it gives you more control over the mining with less spending and more earning.
Correct - of course you bear all risk - that is something you always need to consider.
There are two ways to mine: participating in some pool, versus going after the coin directly. Most rigs are participating in a larger pool.
I would say this is a good start to analysis whether to invest in cloud mining or to set up your rig. However, you should also dig deep to see if it actually make financial sense to mine. There are various expenses: electricity, maintenance, etc. Most importantly, how fast does the mining rig payback itself. Could you invest in something else to pay back more?
Absolutely - you are right. Running an own rig you need to look at the full picture. T
Electricity I put into the calculation (very end I deducted 0.1 eth for electricity). Maintenance is not considered - that is correct. hat was what I was trying to say with the part where I mentioned that you are taking all the risk if you go for your own rig.
Payback for the rig according to my numbers is 6.7 month assuming hash difficulty stays the same (which is not true) and eth price is constant (probably also not true). So probably it is more like 9 month.
then again, if eth developers managed to find a way to solve the scaling problem, you could also see mining fees to come down significantly. 1 year payback still seems reasonable to me.
Do you know of any reputable mining companies that have contracts available? I know the Genesis Mining has no contracts left due to heavy demand!
I am with BitcoinClub as I mentioned. I think they still have contract available. It is an "invite only" network but I could invite you if you like (disclaimer: I think I will be rewarded for that but that is not my intention. But it seems to be invite only).
Yes, I would be grateful for an invite ... please send me the link. Cheers
I love mining in general. I'm going to be setting up my own rigs as well as I see it has a challenge.
Cloud mining may be good but most of them are scams .so its. Better to mine own .
For me it would be unprofitable. Because the high cost of electricity in my place. But I congratulate you on your purchase, happy mining!
It might be smart to set up wind generators and solar for your home, and use cryptocurrency generators to help pay down the cost of the power generation. That way, after a bit of time, it will have been paid off much faster and you get the power system afterwords.
That is interesting. How much do you pay for 1 kw/h?
About 10 cents.
That is very cheap. We pay here 0.15 cents. I calculated with 7000 kw/h per year for the rig. So 1'050 USD a year (miscalculated in my article - need to update that). So it would be profitable for you as well (always assuming the market isn't crashing)
For my village is expensive, as the average salary per month is less than $ 200 in my village. You need to have initially some large amount by our standards, to establish production and time to pay for the electricity until the production starts to pay for itself. Actually it is certainly beneficial, but unfortunately, it is not feasible for me. Now I want to invest some in the currency of Tron. You've heard of it? What do you think about its prospects, if you are interested?
in germany is the energy very expensive. a kw/h 0,35 € . it is ~0,40-0,45 $