Bitcoin Forum

H guys.

I am looking for some information on btc hardware,  I have a small group of colleges who are interested in opening a bitcoin mine here in the UK.
After doing lots of reading we are wondering what the best miners available are at the moment.

We have a budget of almost £20k GBP to open the project up.

what is the best miner on the market at the moment in terms of hashrate / cost.


thanks

Scottish Security

http://scottishsecurity.net
https://facebook.com/scottishsec

The immediate problem you will face will be the cost of electricity. How much do you pay?

Electricity cost is not a issue. have permision from a large factory to use there power suppy for a small % of the total coins mined over the project, The factory is a very large industrial factory so electricity is no issue for us.

The real cost is setting up and buying a good solid miner that will last and keep up with the movement in the network,

That's a good start.  :)
I shall leave you with the hardware experts now.
There are two factors to bear in mind, the possibly imminent limited release of Bitfury's much promised 16nm gear and the effect of the halving on projected income.
Good luck.

You can easily use this link to simulate the average profit/loss you'll make:

http://www.coinwarz.com/calculators/bitcoin-mining-calculator

Be carefull tough, it's an estimation of the variables AT THIS MOMENT. In a couple of months, there'll be a block halving (effectively halving the ammount of coins you'll mine with the same hashrate) and AFAIK, the difficulty is still rising.

you can plug these values:
https://en.bitcoin.it/wiki/Mining_hardware_comparison
Into the link above to calculate everything ;)

Thanks for the info,  We don't see the halving to be a issue for us as we are not paying any running cost for the farm. So the halving of the reward should not be a issue for us, Unlike some farms who will suffer dew to the decresed amount being distrubuted.

We would like more information on the hardware side of things.

What would be a "sensiable" investment?
What features should we be looking for?
What is the biggest hashrate for any single miner at the moment.

Thanks in advance.

Scottish Security

Thanks to be honest we do not really need to caluclate much, Most of it is down to the power you use but as we said we have a offer from a large factory to split the rewards with them, So power cost dose not come into the equasion.

Its really the hardware we need a nudge in the direction of.  info on whats being developed, whats available now, what people are running and what sucess they are having is a big factor for us to consider right now.

That part was also in my answer ;)
https://en.bitcoin.it/wiki/Mining_hardware_comparison

If you don't care about the power, i guess you'll need the miners that generate the most hashes per dollar of hardware.

Altough, i would do the complete math, it might take a really long time to ROI on the hardware, even when not factoring the power cost...

Okay at this moment  there are two pieces of gear

the bitmaintech  s-7
the avalon 6


Both are long in the tooth so to speak  meaning newer gear will be coming soon.

You are in a 'free' power position so buying older cheaper gear  can be a good move for you.

It is in a factory so noise factor is not an issue.

I would suggest  getting Avalon 6's and s-7's

2 of each  would set you back about  2000 usd
power supplies maybe 600 usd
shipping + vat =  600

so 2600 usd is  2260 gbp

this gets you started.

PM me if you have more questions.

Even with free electricity its becoming a headache pretty much dealing with mining farms.

The latest miners are better because you can run more of them in a facility, however they are expensive and you won't see profits for like 4-5 months.

The older miners are much cheaper, 2 months ROI but you won't make as much because you will run out of power soon because they are inefficent.

The older miners are a safer investment, less risk, less reward.

The newer miners are a little riskier because its next to impossible to predict what will be the BTC price and Difficulty in 3 months or 6 months from now.

Two miners atm are your best bet

The S7 is cheaper but the A6 is built better


Avalon 6  https://ehash.com/  .
Avalon 6  https://bitcointalk.org/index.php?topic=1257327.0

Antminer S7   https://bitcointalk.org/index.php?topic=1165628.0
Antminer S7  https://bitmaintech.com/productDetail.htm?pid=000201603310959482268cfunbq106E5


and listen to these guys so far there right and are giving solid advice, i won't comment to much on the halving that happens in July, that will happen again in four years unless that's changes over time it can happen but for now it's every four years.

This is the main bitfury thread to watch ,

sidehack is our go to guy if he can get chips his miners are solid builds. 

https://bitcointalk.org/index.php?topic=1291890.0


Welcome to bitcoins and the forums !!!!.

Tip on buying don't buy direct from Avalon for the Avalon 6 you can find it brand new else were for 150 usd or less . they follow the rule you pay ,more buying from them direct unless you talk to them for a big order which right now as some one else said hold off buying to much till the new stuff hits in about a month we should start seeing it a lot unless we were lied to which is a possibility to boost there investment sells .

kast thought forgot this link right here our very own market

https://bitcointalk.org/index.php?board=75.0

with nice deals, some in your area and buying used should not mater to much right now for the S7 or A6 .
cya .

Thank you all for this valuable information,

We will take our time to consider all information put to us and make a decision on what is going to be best for our farm.

There are no noise limits as the factory we have lined up have a noisy production line so there should be no issue with noise. As for cooling they also have industrial ventilation system in place we can take full advantage of. and being in Scotland we have the joys of being a relatively "cold" country even in the summer months (which sucks)

Another question is the networking for the miner farm, we noticed on a video on you-tube of a very large bitcoin mine they were controlling there systems via RDP to some other system. is this normal practice for large farms to run RDP control for there systems?

Also running a large farm what management software would best be deployed?

Thanks in advance guys!

Scottish Security.

The cost of electricity is THE ONLY ISSUE.... Nothing else really matters.

Grab S7's from bitmain if your cost is sub 5cents USD / KWhour.

Like I said we have no cost for electricity, Our only factor is equipment and time,  We have a deal with a factory to use there supply and we give them a % of the return from the mine operation.

I had a look at the S7's but I think I might wait untill bitfury come out with there new product after doing some reading.

As much as I like the S7 Batch 16 with 4.73th/s,  is there any other which hash at a higher rate? possibly over 5.00TH/s?

Also power supply for the miners what would people recomend to use? any specific supplys that come highley recomened?

For the S7 and any other miner that uses less than 1400w I highly recommend Bitmains 1600w PSU. A general rule of thumb - for sustained loads eg. mining - always keep the load at 90-80% or less of a PSU rating. I have 25 of them and zero problems. Aside from that they already come with 10 PCIe connectors.

Batch 8 came in a little over 5TH, but from what I've heard they are slightly less stable, not to mention they are highly sought after and thus will be trickier to obtain.

Power supply is partly preference, my research showed that a retail PSU (I would recommend the eVGA supernova 1600w) runs *significantly* more efficient than the bitmain PSU's, but at over twice the price. With a 10 year warranty the eVGA will likely outlive a generation or two of miners, and 1600w is pretty darn close to maxing out a 15a circuit so it will likely power just about anything for a while to come.
Also the retail units will happily take 120 or 240v vs. Bitmain's demanding a 208v minimum, so depending on your situation the retail unit could be the better choice.

I don't have links to the proof, however based on some videos and other research I saw bitmain units pulling 6A @ 240v vs the eVGA pulling 5.4-5.6A @ 240v, a pretty significant efficiency gain, I wish I had the wattage numbers for you but I haven't gotten around to metering my units as of yet.

To summarize:

Bitmain 1600w PSU - Cheaper, smaller, functional
eVGA 1600w PSU - More expensive, more efficient, 10 year warranty, better resale value

Just out of curiosity, do you run them 24/7?  If so what is the average hash rate you see from this setup.
Do you join into a pool or are you solo mining with you s7's?

Of course they run 24x7x365. In mining it usually makes no sense to turn them on and off. Some of the supplies date back to Bitmain's Batch-2 (around a year ago?). Before the s7's came out I was mostly using HP DPS1200 server supplies for the (then smaller) farm of s3, s4, and s5's. Currently per CK pool my total average hashrate is 110THs now running mostly s7's.

Unless you run a peta-hash farm, these days solo mining is more for fun with folks using USB stick miners or other low (ish) power/hashrate device. The odds of hitting a block vs daily power costs even if near free are too high.

Thanks, I think we are planning on buying x20 Avalon6 should be around the 70TH/S mark, depending on a few things.

With hopefully a plan to add some of bitfury's products further down the line or when they announce what there next product will be.

We do plan to break into the petta-hash market in the future but for starting out I think 70TH over 20 miners is enough for a decent start at things.

Thank you for the advice and I am sure I will be in contact with you in the near future once we are closer to stating the farm up.

Scottish Sec!

Now onto my next question. Were in the UK are reputable sellers of miners? or is this going to be a shipping job for outside the UK?

There are so many sites advertising them knowing which ones are reputable is a bit of a stab in the dark,

I think you will get much better value for money going for an S7 Batch 16 bought directly from Bitmain.

Price per unit including shipping and VAT will be around £520 / Unit.

If you can obtain some discount vouchers you can do it for less than this.  :)


Rich

The only manufacturers are Bitmain, Avalon and Bitfury atm. Maybe Spoondoolies. Regardless its all imported. You say they just want a small portion of the coins. I'm not sure they realize it would cost 1$ of electricity for every 1.2$ over 3 months?

Meaning unless they produce power and their only concern is selling it. Not buying electricity (unless they pay less than a cent per kWh), is less loss than selling you electricity for nothing.

IF you/they dont care. Head to Bitmain and order S7's.

As far as I know, a company called BlockC is the only globally Authorized direct distributor of the Avalons http://www.blockc.co/ (http://www.blockc.co/) so they are the ones to talk to. Anyone else outside of China is reselling from them. BlockC is who folks here used for group buys of Avalon6's. Since they only sell in lots of 10 or more sounds perfect for your plans.

There company is a Multi-Million pound turnover and we have been told not to worry about the electrical cost of the farm but to try scale it up before the next halving in 88 days.  If we can be up and running with 70TH/s for the next 88 days to see how things go before the halve,

Also we are thinking that as we move towards the last 5 million btc left to mine, I'm sure that some of the bigger farms will suffer and go offline with the costs they are spending on electric, Surly a split for 25 btc to 12 will hurt the bigger players more than the small time miner operations.

I noticed as well that if say a big miner site goes offline and the network starts to struggle the difficulty will re-adjust automatically, so its makes it that bit easier for the farms to come back on line and move into profit again..

I take it this means that block times will start to fall the closer we get to the end of the road.. even thought that is theoretically not instill 2041,  I Think this will be where the smaller farms come back to make there money.

Good luck with that theory... I think you will find that the Big Farms that matter will have paid for their investment in the current generation of Miners, will have transitioned to the 14/16nm Miners and will be making as much money after the halving as they do Today. Don't bank on any significant or prolonged reduction to the difficulty.

Rich

fantastic, Thats where I was looking at them,  
http://www.blockc.co/collections/bitcoin-miners-shop-avalon-blockc-co/products/avalon6-bitcoin-miner

Seems like a good price, after doing some calulations this is what I have come up with..

Solo Farm - No Pool -

@ 70 TH x 20 Avalon 6 @ Hashrate: 3.5TH/s ±5%

Days to generate one block : 126.89 Days
Days to generate one BTC: 5.08 Days
Days to break even: 125.19 Days

Time Frame    BTC Coins            USD            Power Cost (in USD)    Pool Fees (in USD)    Profit (in USD)
Hourly            0.00820935    $3.49    $0.00                    $0.00                    $3.49
Daily                    0.19702444    $83.87    $0.00                    $0.00                    $83.87
Weekly            1.37917107    $587.10    $0.00                    $0.00                    $587.10
Monthly            5.91073317    $2,516.14    $0.00                    $0.00                    $2,516.14
Annually            71.91392021    $30,613.04    $0.00                    $0.00                    $30,613.04

Hmm. 70Th/s is minuscule (vs network). If they have money coming out of their ears, sure. Thats not a whole lot of electricity. Tho i'm pretty sure in the UK they would earn much more if they sold the electricity rather than (you) mined. But lets move on.

So you know about the halving, so you know anything you buy atm will be even less profitable in 3 months. We also know that for private use, there's like 0.1 efficiency chips that won't be out until... oh look, just before the halving, to dump on idiots.

Okay anyways. When the halving happen, it does not really matter as far as "hashrate will drop". Sure it will do something, but actually, big farms have a huge advantage over you and small miners. First they can secure mW's of electricity at dirt cheap (like 1-2 cent/kWh) and second, they get the better stuff before you, and they get better prices.

You can do your math and calculate free electricity and do ROI based on that, but i really much doubt they would be willing to supply you 1mW of electricity for free. (Ofc thats the the case for you yet) So you can get some S7's or wait after the halving (smarter, because S7's value with basically drop overnight to crap).

As far As Bitcoin go, its not a pretty scene, but if you can have someone else shoulder the bill. Go ahead. You'd only need like a dozen of S7, or so for your goal. You won't earn much money and i'm pretty sure they will lose more on electricity than you will earn, but who cares, its not your money. ;P

Exactly,  and we are also thinking that after the half possibly the BTC price will be effected. less coins on the network must mean a price rise. its supply and demand structure.

Like we said we want to learn from people here and take on board all the advice we are given. We have a end goal for our coins that will see us make a good return on anything we do mine, and having to hand over a % of the coins at the end of the run we are sure we can walk out with a good ROI. Since we have no running cost for electricity,

The factory get a good rate on there electric as they have a mechnanical production line (robotic welding) they use large amounts off the grid and get it dirt cheap like you say so a few MW extra won't hurt them, also helps the director of the company is into his bitcoins and is willing to gift us the electricity and space for a small % of the BTC we earn. (think he just wants to say he has a BTC farm in his factory)

As for starting out 20k GBP we feel is a good starting investment to buy equipment and fit out the 1st room, (we are planning 2)

please do keep the information comeing guys its been really helpfull to us, and we really appricate all the input and time you have spent replying to us.

on another note dose anyone here know any bitcoin sites in the UK that are up and running? We would be keep to speak to anyone running one? It would be good to have a go to person in our own country who knows the in's and out's of bitcoin miners/farms.

We would also like to visit a bitcoin mine we are willing to travel almost anywhere in the world to come and speak with operators to get a more indepth picture of the way they run there operations.

Thanks

Scottish Security

I do have to agree with VirosaGITS on using s7's. Using the Bitmain supplies pretty much across all batches since b7 my monitoring reads 6.2A on a 208v line (1.290kw) and on the whole producing as advertised 4.7ish THs. Some a tad less, some consistently averaging >5THs. Currently $563 USD vs the Avalon6 @ $900 for 3.5THs @ 1kw ish load.

I should add that I just picked up one of the latest batch-16 with the one fan and so far it is doing fine. Ordered on Wednesday and got it the Monday after. Temps surprisingly  8) the same as the 2-fan ones sitting next to it.

I also MUST add that now since the foundry TSMC has had time to re-calibrate their 16nm Fab after the earthquake earlier this year I suspect that we will be seeing Bitmains miners using 16nm nodes size showing up in (hopefully) the next month or less. Unlike *some* miner chip makers <cough, BitFury> Bitmain has always been very quiet about new tech until it is actually in production with fast and on-schedule delivery. It is a cert that Bitmain's last 2-3 batches have been their Plan-B to cover their ass on any delays in 16nm chip production.

OK you seem to have ignored my previous two posts so here's my final advice.....

You are way too late to get into Mining, even with your pretend free electricity. After buying the miners, and PSU, setting up the operation with suitable racking, cooling and safety systems, you then have running, maintenance and replacement costs to factor in. The life of the Miners will be less than 5 Years, maybe as short as 3 Years.

So here's what to do. Take the £20K and buy a sign that says Bitcoin Mining and stick it on a Door, spend the rest of the Money buying Bitcoin. A lot less hassle and far more likely to be profitable.


Rich

Hi Rich,

I did read both of your posts and thats not exactly what you said if you care to scroll back up? You talk about getting discount vouchers to buy miners.. at no point have you said anything of the such about being too late to mine.  We know we are late comers to the mining industry but as the saying goes better late than never...

https://bitcointalk.org/index.php?topic=1436810.msg14542267#msg14542267

Also our project is to mine and make some coins for another project down the line.. while there is still 5 million + coins to mine I can't see how we are "too late". I thought with bitcoin the more people mining was of great benefit to the network..

I don't see the point in buying 20k of bitcoin when we can help support the network and earn coins back over time.
We are hoping in time the director of the company will possibly invest into the mine with us, he has already been very generous by gifting us the space and the access to his power.  and I am sure he will be more than willing to possibly buy new technology in future when it becomes available..

I know you say well the miners have deeper pockets than us that is correct. But as we prove to our host that we can
1. run a farm successfully
2. run a farm safely
3. generate coins..

then in time I am sure he will open his wallet and invest in better technology with us..
I must stress this guy was in the Sunday times rich list 5 years in a row now and has very deep pockets.

But to prove a point before asking for investment he has given us this opportunity to do this and it would be foolish not to take full advantage of whats been layed out before us...

thanks

I might add that @ $563 USD and 4.7THs each for s7's, 20k$ (USD) buys 35 miners for >166THs with around 45kw power usage ... Got a hunch the exchange dif between 20k USD and 20k Pounds would cover any VAT you face no?

Well go ahead, but mining doesnt really support the blockchain. If you want to do that, do your mining if you want to, but be sure to setup a full node somewhere else. Unless you're talking in PH/s, it will provide no support whatsoever and if you do talk in PH/s, its still pretty marginal considering China already has majority. At this point the only thing that would help is for them to decentralize their hash.

 Thanks fuzzy.

But i must say the 20k must buy us miners and PSU's and cooling.  We already have racking and the factory has Inert gas fire suppression systems in place,

Thanks, we have been talking about PH/s but for starting TH/s is going to be where we are at, you must walk before you can run..
thank you all for your input and I look forward to keeping you all posted on how our project goes.

I shall get some photos tomorow at the site for you all to see and some photos of the factory and there power systems.

Thank you all for the input, You really are some clever cookies here.. ;)

Scottish Security

For cooling, moving outside air in and out is the best choice. Where practical, look at large-surface swamp cooling if ambient is regularly over 90F. Additional benefit is that being for all intents and purposes wet air filters the swamp cooling gives ya pretty clean air. Having free(ish) electric is great if real AC is really needed but that should be a last resort because when it comes down to it all miners are perfect heaters. All power in is expelled as heat. Please no nitpickers about micro energy sent over the 'Net etc...

My two cents:

While I like the Avalon A6 and it's quality, for every $100 spent on mining gear, you will almost certainly get more TH by purchasing S6 mining gear. If you have some special advantage that's not obvious in terms of Avalon A6, S7's will almost certainly provide more TH/$$$.

I am surprised that you would start solo mining. While the calculations are nice and all, you may well find yourself 60 days in with exactly zero BTC having been mined. If you solo mine, none the numbers besides block solve time for 70TH matter.

Best of luck.

Thanks, We have not ruled out pool mining, We have done calculations on many diffrent ways and ideas including splitting the mine into 10/10

10 solo and 10 on a pool.

Thanks

For a reference, CK pool is currently running ~34PHs. and today has hit 5 blocks. Yesterday they hit 11, day before that it was only 1 block. Running my 110THs they paid me 0.08 BTC per block. You do the math on earning vs the Solo Lottery and well.....

thanks for this.. the factory has a massive cooling system and extraction system,  dew to the operations they undertake we should be well catered for in the cooling department and extraction from out server room.

I believe they have a Vent-Tech system in place into the area we will be using.

http://www.vent-tech.co.uk/evaporative-cooling/industry-solutions/manufacturing

That be them (swamp cooling). Something else to keep in mind is that the miners do NOT need an ambient 'comfortable' for people. My main farm remains quite happy when their room gets up to 85-87F in the summer.

RichBC, I think you've completely missed the key point:
This Bitcoin farm is getting build to facilitate a better industrial property sale. It is kind of like putting a fresh coat of paint on a house before sale. Even if it creates 100% loss it is a tax write-off. Whatever that factory builds or welds, it is getting prepared for a profitable sale. There's a good momentum on the real estate (property) market in the UK now.

I've heard that in London other security/watchmen/guards companies getting free electricity in unoccupied buildings on the following conditions:

1) keep the squatters out
2) keep the light on
3) keep the human and car traffic on so that the property looks like it is busy/occupied
4) don't violate any municipal safety codes.

It is all in preparation for a "flip". Please learn the estate agent speak (https://en.wikipedia.org/wiki/Estate_agent#.27Estate_agent_speak.27). 

I've wondered about the future of miners a lot recently one thought was miners cooled by liquid nitrogen in some way, I see quantum computing is taking big leaps forward and they use liquid nitrogen to keep the chips cool. even though the systems are the size of a room at the moment we can't be too far away from scaled down versions of this..

also liquid cooled boards and chips is something I am interested it. If they can make CPU liquid cooled then sureley btc miners could follow suit?

BitFury with their data tank division are the ones to talk to on immersion cooling setups. Very efficient means of moving the heat from a very compact point-A (the miner tank(s) to Point-B (outside). Large-scale of course with each tank handling several hundred THs I believe.

Hi,

I know for fact that there is no intention of "flipping" the business or factory.. In fact they recently signed a deal worth almost 20 million with a company in the far east. Unfortunately I am unable to say what they produce or where they are located for obvious reasons.

As for security company's yes I have heard of this, and it happens a lot more than you would think,  But in this country right now if you have a source of free electricity most people are opting for weed farms. (even though they are 100% illegal here) that's where the "big guns" are making there serious money..

I know there is no intention of the factory being sold, I have known the owner for 18 years and watched him build it from the ground up. So I would be very very surprised if something like this was on the cards..

Thanks

What total USD cost did you assume above for the above calculations?  

You also need to keep in mind that there is a 20% UK VAT, shipping costs and cost of power supplies.

With 20 Avalon 6 for $18,000 USD you need at add 3,600 for VAT, say $1,000 for shipping and $2,000 for power supplies giving say $25,000 USD or 17,000 Sterling.

With 70 TH and $25,000 USD the break even points become

Days to generate one block mining solo: 126.89 Day(s) (can vary greatly depending on your luck)
Days to generate one BTC: 5.08 Day(s) (can vary greatly depending on the current exchange rates)
Days to break even: 297.51 Day(s) (can vary greatly depending on the current exchange rates)

The above does not take the halving into account.  It is possible you will never recover your initial investment.

Also we assume the factory runs 24 by 7 days and does not turn off cooling on weekends.

I see your logic here but we are VAT register in the UK so the VAT we will claim back from HMRC,

17,000 GBP is still less that our starting budget. and to be honest we do have a small % we have held back for additional costs.

There are also ways to Import into the UK at a 0 VAT rate.. You just need to know what country to ship into the UK from.

Assuming you can avoid the VAT, with say $21,000 USD cost and 70 THS the break even point is still:

Days to break even: 249.91 Day(s) (can vary greatly depending on the current exchange rates)

And this ignores the halving and is without pool fees.

The figures with the Avalon 10 Pack just don't seem to stack up.

Man, it is a standard price negotiation strategy. There was even a feature film (can't recall the title) explaining all this on the example of Olympia and York redeveloping Canary Wharf, which was industrial area turned into office/residential spaces.

More recently estate agents invested into Jason Statham's movie Hummingbird/Redemption to create traffic around some rather underpriced locations in London to spruce them up for sale. And quite successfully. If somebody knows London and watches the movie they can recognize the location where Bitcoins were mined (light industrial use?) and later on the property was sold.

Obviously, I don't know neither the actual location nor the persons involved. But this is a speculation subforum, and I can recognize speculator's hand when I see one. Bitcoin has this great advantage (compared to anything expressly illegal) that no real guns are required to defend them and the investment amounts are comparatively small.

Edit: spelling and quoting fixes

I appoligise. I did make a mistake..its late here. 2am! need coffee!
I entered for 10 miners at 9500.

thats where the figures came from.. under the assumption of 0 rate import.

Hash Rate (GH/s):70000.00
Power (Watts): 1200w
Power Cost ($/kWh): £0.00
Pool Fees %: £0.00
Bitcoin Difficulty: 178678307671.68800
Block Reward: 25
Bitcoin to Dollar (USD):426.900000
Hardware Costs (USD): $9500

Days to generate one block mining solo: 126.89 Day(s)
Days to generate one BTC: 5.08 Day(s)
Days to break even: 112.95 Day(s)

you are correct in saying that changes after the halfing.

thanks for pointing this out to me,

That is a very very intersting theory and I will be looking into that more. But you are very far from the path we are going down.. It has nothing to do with any kind of re-generation or selling.

to be honest in london if there was serious money involved then yes there most likley would be guns.. But in scotland, people still run about the streets with swords like braveheart. :)

I would be very interested to find out what this film was called. I will do some digging into this!

thanks..

Scottish Security

http://scottishsecurity.net
https://facebook.com/scottishsec

So with the correct 20 miners (rather than 10),  the cost and break even point will double to about 245 days. This ignores VAT and Halving.

I believe you are correct. like I said at the start we are here to learn and take advice, Possibly S6 S7 are not the right miners for us and we should hold out and see what bitfury come out with as previously advised.

Thank you for pointing this out to me,

SS

Or what Bitmain comes out with. Remember: Both Bitmain and BitFury use TSMC as their chip foundry so it is a damn safe bet that the earthquake delays at TSMC's 16nm fab that blew BitFury's announced chip release schedule out of the water also are why Bitmain has not released a new 16nm node miner yet.

As a FYI, the current 28nm node chips are produced in a different fab at TSMC and the 28nm node process/equipment is much more forgiving of even large scale disturbances. Their 28nm and higher fabs were back up in around 1 week. That is why TSMC was able to continue production of chips for Bitmain to be used in the s7.

BitFury only makes (well technically, designs/sells) chips which are then sold to integrators (including BitFury's own build-you-a-Peta Farm divisions) with no reliable information yet as to *who* those integrators are/will be to be made into miners whereas Bitmain makes (again, designs. TSMC does the actual making of  the chips) and ready to run (aside from PSU) miners. When BitFury finally gets wafers/chips based on 16nm then Bitmain will as well and be fully prepared to put them into miners. When they do, then look out boys and girls.

I'm sorry, I don't remember any more details for the movie. I had to look up names "O&Y" and "Canary Wharf", that was over 20 years ago.

If you are not averse to learning from the movies, then watch the recent comedy "Unfinished Business" with Vince Vaughn and Dave Franco. It deals (amongst other things) about the issue of how to distinguish a genuine business opportunity from just being a fluffer. Although the movie is sold as a comedy, in my opinion the drama part is much better.

Thanks, I will have a look see if i can find it,  I would say i'm more of a "real world" learner than "movies" :)

Thank you all for the insight you have all provided, It has given me a 20+ question sheet to go away and work out the next plan of action.

I am meeting today with the compnay and will put all what has been presented to me to them and see what route we should go down.

Thanks

Scottish Security

http://scottishsecurity.net
https://facebook.com/ScottishSec

Don't forget if you are running it as a business (as you would need to to be able to reclaim the VAT) then you need to allow for all the associated running costs of a business (accounting, tax returns, etc.) and presumably corporation tax will be payable on any profits.

As an aside I'd love to see the annual return for a company like the one you are describing ...

Thanks, We have a outside company lined up to deal with the tax affairs.  We already have a company register with company's house for our part of the business..

As we are not part of the main factory and out income is no where near what there income is then I think we should be ok.

Threshold for VAT is 75k in the UK. which we are already registered.

corporation tax rates for 2016

Small profits rate (companies with profits under £300,000)
Main rate (companies with profits over £300,000
Main rate (all profits except ring fence profits)   20%

They also have a LOT they can right off the first year.  With one time fees like PSU's, Electrical, Racks, Cooling, etc.  They have quite the write off on taxes I would guess.  And it is legitimate as it is a cost.

Second tax year I would expect right off's to be much smaller.  I would agree though I would love to see a mining company this size profit.  But it is going to be going up against some heavy hitters.

Hi,

yes there would be some costs we can claim back the VAT on, and write off many things.  We have contacted a tax and vat specialist to advise us on these matters, Don't want to have HMRC knocking on the door asking for a big bag of cash somewhere down the line so need to make 100% sure everything is fully documented,

Thanks.

It is best to get direct from manufactuer if buying in bulk.  Most EU sellers add vat to your price so paying a lot.  If you are a true business and can get part of vat back your much better to order direct (I think).

Can I ask I see a lot of equations with 0 cost on electricity.  What is your electricity with running in UK?  There are not a lot of miners there.

Hi, if you read back we have a deal with a large factory here in the UK they are supplying us with the location and electricity for the venture. at the moment buisness rates for electricity in the uk are the following..

small business 15,000 to 25,000 kWh

    8.68p/kWh unit price with a standing charge of 23.7p/day (£86.51 annually)
    9.07p/kWh and 24.23p/day (£88.44)
    9.33p/kWh and 21.21p/day (£77.42)
    9.03p/kWh and 23.61p/day (£86.18)
    9.89p/kWh and 22.46p/day (£81.98)
    9.58p/kWh and 21.28p/day (£78.77)

Depending on the supplyer this is typical for a small to medium sized buisness.

Most larger buisnes's pay around the 2.7p/kWh to around the 3.0p/kWh. depending on who the supplyer is there is a standing chargy per day of between 29 and 35p per day..these rates are if you draw more than 100,000 kWh each year...

this is last years gov.uk advice to the energy markets.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/415778/qep_mar_15.pdf

here is a good calulator for UK power prices. but you must also factor in this is for home useage so price is very high,

At the moment the factory spends around £36k on electric each month. I do not have the figures for there useage or draw from the grid to hand but I will post them when I have access to them again..

So for us we are in a good position here. We only have to outlay for the equipment, security, and day to day running of the site thanks to a great deal we struck with the owner of the company.

Thanks.

Scottish Security.

For anyone with free electricity it is likely to be pointless thinking about buying new equipment.  The better electrical efficiency on the newer hardware is not relevant to you.

You are likely to be better off buying second hand older miners, for example S3s and S4s.

Fundamentally all that matters for you is the dollars per terahash of whatever you buy.  Electricity efficiency is not relevant.

So if you really have 'free' electricity I would be looking for every cheap second hand miner in the UK and just compare them based on dollars per terahash.  

Note - This ignores the question on whether the factory owner expects a positive return on providing the electricity.  If he does the electricity is not 'free'.  

Yes and no to pointless.   Most likely user has a limited amount of electricity.  So efficiency can effect hashing speed in total.  A upgrade from S3 to S5 if priced right they might make more monthly due to higher hashrate from more efficient gear.

If there is no limit on amount of electricity your right it would not make a lick of difference.  But most free electricity users are limited in amount.

As far as I am aware we have no "limits" on how much we can use, But I think we should aim for efficiency also, We could just buy older equipment correct and hash away drawing as much from the grid as we can but to be honest that is not a very ethical way to conduct business, 

I do care about climate change and the effect on the planet,  And I would be foolish of us to just care solely about profit and have no care for the planet or how much electricity we use even thought it is free for us to use we still need to show responsibility not only to our host but to mother earth.

I am sure that facility has a limited amount of power it can draw, nothing is unlimited.  Also if your numbers are correct, they are drawing anywhere from 3 to 4 MW of power already.  

They reason they want a percentage if to cover their expenses, and if you are creating more expenses then what your will be giving them, friend or not they will say get the @%*# out of here.

As a business, why would I let someone create additional expenses, that reduces my profit, and just put money into their hands.  I don't see it.

Thanks but that't not 100% accurate, They do want a % of the coins yes.. but we are playing a long game here not a short term game,  

They do not need to make any profit from the farm, there is a end goal we are both working towards here. There is no chance the will ask us to leave. we have been working towards this for a long time now and they know that the electricity cost might out weigh the profit in the short term and possibly long term. But people are not thinking about down the line.  from what i've seen there will be bitcoin farms till about 2040/41 when the coins are (in theory) to all be mined out..

So there is still a good few years of mining available..

Ive notice many people are trying to dampen out spirit here and say waste of time.. Not sure if this is because they don't want more farms on the network or trying to scare us out of the idea..

like I said we both have a end game for this idea and we are being fully supported by the factory owner wee have a contract in place that stipulates that we will not incur any charges or fees for use of there premises or for power usage no matter on the amount of usage,

This has been drafted up by our solicitor and is currently in the hands of the factory's legal team to be signed off.

Again I said we are covering all basis here so there are no nasty surprised and they are fully aware that the possibility of electrical usage being higher than return is a possibility..

Thanks

Is this when you want to stop mining, as halving continues into the 22nd century (2110-2140)

Not trying to talk you out of anything, but IMHO you are screwing over the owner of the factory (you said friend), by using their power, creating an expense to them, and you making the profit.  I sure hope their legal team sees through this.  If it is a friend have them match your £20,000 and either buy bitcoin, or look into something more ethical in a bitcoin investment.

I do not think that is the case.... A lot of people come here we grand plans, an expectation of getting rich quick, often combined with an apparently large budget and "free electricity".

The community here, which BTW I am still very new to & also UK based, is both very knowledgeable and helpful, but has learnt to be mistrusting of these plans which usually come to nothing. They also tend to throw a bit of a wet blanket on plans just to bring people back down to earth because a lot of people have only looked at some of the costs and the upside of the equation with very little regard for for the real costs and risks involved.

Now not in any way saying this is you, but you fit some of the profile.... What would be of most use in terms of the community helping more is for you to share some of what you are not telling us about your situation? That is to why this factory is so keen on mining with no regard to the electricity cost, why it is acceptable for the returns to be less than the costs, and what it is about the long game that you are playing that makes this an attractive proposition?

Rich

 

i'm sorry but I don't think I fit that profile at all, I have been involved with bitcoin and scotcoin since they started, I know lots about bitcoin, I also run my own cyber security and cctv company which I have posted here and links below.  I'm not some daft 15 year old I am in my late 30's..

I understand just by reading here that the forum has a issue with dreamers and people trying to bump there post counts. But not eveyone should be tarred with the same brush.

I also understand that my situation is very "sceptical" from the outset but I'm sure in time when things start moving and orders are places and photos of the build and setup start to arrive that will subside.

as for the long game, I want to keep some of the details to myself. would be very foolish of me to give any competitors a head start on my idea. but in the fullness of time these will all become clear.

and the answer to your question about the factory is privacy.. I am more than happy to talk about my part but I am in no position to be telling private information from another party.. (data protection) It would be unfair and unethical to be giveing information on the factory in a public forum and what there side of the deal is.. I am here to acquire info for my side of the project.  if the owner wishes to come forward and tell more than that is totally up to him..

as he is watching this thread :)

Thanks

http://scottishsecurity.net
https://facebook.com/ScottishSec
Twitter - @ScottishSecure

I only said that you fitted part of the profile... You have only now shared that you have been involved with Bitcoin "since the start", but have a newbie account, Free electricity, and are only choosing to tell part of the story, etc. However trust me I and others are only trying to help and would love for you to be successful.

Everyone new here is given a hard time if they propose something which is out of the ordinary. Just take a look back at some of my early posts when I explained that I was able to undervolt an S5 and significantly improve it's efficiency. I was basically told prove it, post pictures, we do not believe you...

For a lot of us latecomers this is a hobby that pays for itself if we are lucky, however it's a very interesting field to be involved in and we get a lot of enjoyment from it, which mostly involves helping others and sharing information and experience. I am not asking for any information that is not yours to share, but the more information we have the more helpful we can be.

I just wish that I had been involved from the start, because if so I would have made a lot of money.  :)


Rich

Thanks I fully understand that I have a new account here. Not everyone is "forum keen" but I thought before I started I would come to the place that is well known to have large scale miners active in the community.

I also agree that late coming to the party has its drawbacks.  But its not dampened my spirits to setup and and make some coins..

We also need to think about the future and price of coins.. after the next halving I expect the price to hike again like it did when we hit the record levels!

But we will wait and see what happens.

I look forward to keeping you all updated and becoming a valued and regular member in the community..

Also if anyone is interested in Scotcoin project then please do get in touch.

here is some market data for the Scotcoin project

https://coinmarketcap.com/assets/scotcoin/

As I said earlier in the thread, good luck.
All I will add is that a business plan based on free electricity in the hands of a third party is not built on the firmest of foundations.
Without that free power, you're just another guy with a bunch of unprofitable machinery.

Thank you, that is fully understood.

But its not really in the hands of a third party and there has been lengthy and drawn out discussions and meetings leading up to this point.  And a solid business model is in place.  People also need to remember that there are many other crypto's available for us to "work" on too. We are not limiting ourselfs to just one currency but as this is a btc talk forum we kept out discussion to that topic.


I look forward to keeping you all updated..

Thanks!

Why not just buy BTC?

£20k will get you about 64 BTC today.

If I have done the calcs correctly 70 TH/s will mine about 5-6 BTC a month until the halving (3 months?) and then drop to less than 3.

Even assuming no change in difficulty, it'll take nearly 18 months to mine that many. Probably actually two to three years allowing for difficulty increases and problems with equipment etc..

As I said already in a previous post.  I have no interest in buying btc with this money.

and BTC is not the only crypto we have our eyes on at the moment,

In a previous post I explained that once we have proved we can open, run and operate a farm safely then we possibly will have deeper pockets backing us to buy some rather nice equipment.

I think I need to lock this topic or we will be going round in circles over and over with the same questions.

18 months is nothing really when you think about the amount of time left before all the coins are mined out.. people need to note this fact too.

They also need to see that not all the big farms will see to the end of the mining. I am sure some will go offline in the future, Leaving opportunity for others to come in and work away on the rest of the coins to be mined.

Thanks all for the great info, I have made a big list of questions that I will be putting to our team in the near future.

Thanks..

Scottish Security.

You are wrong on not limiting yourself to one currency though.  Almost all the gear you will buy I would guess would be SHA256... so almost always you mine BTC.  There are very few scrypt asics compared to sha256.  Also if you meant altcoins like GPU.... that is a whole nother can of worms.

If you base it on free electricity and don't get that, it kills all figures you have almost.   But also you are not realistic if you think you will be mining altcoins I dont think, I think you will find the most asics mining SHA256 as a limitation on that idea.

Well, you actually said you saw "no point" in buying Bitcoin, but you also said you wanted coins for another project "down the line" this way you get the coins now and you can start that other project sooner.

I agree 18 months is nothing compared to the total mining life, but it isn't going to take 18 months is it? That is a best case estimate most likely it will take far longer. And it is a long time for a business to be looking at a depreciating asset that is returning less and less every two weeks. Difficulty has basically doubled since December - just 4 months - with new hardware expected I doubt if it will slow down.

Also remember any hardware will wear out over time - faults and failures will require replacement, plus the hardware will become outdated as the technology moves on - even 500 TH in 4 years will seem like nothing.

I guess it depends what you need to get back from the £20k?  If anything.

Thanks for your input..

I am locking the topic now as I have all the info I needed.

thanks all again! and I look forward to posting updates in the near future!!