Swedish ASIC miner company kncminer.com

[Puppet]

Each of those 890 orders may have more than one device in their order, therefore your extrapolation represents a bare minimum estimation.

Good point. However looking at the published preorders, the average order consists of 1.14 units. Its not going to change a lot unless there are some really large orders we dont know about.

[1713305989]

1713305989

[Phoenix1969]

I'm sorry guys & gals, but this time Xallia & Crumbs are right.

When I ordered, It was for September DELIVERY, not September shipping.

Call it what you will... Fact is...   Come Monday... If the miners are not delivered... The miners are late.

[NetTime]

I'm sorry guys & gals, but this time Xallia & Crumbs are right.

When I ordered, It was for September DELIVERY, not September shipping.

Call it what you will... Fact is...   Come Monday... If the miners are not delivered... The miners are late.

Yeah, this sucks.

[merv77]

wasn't there something about being in the first "1-500" list or something like that.

I actually bought someone elses order to get into this "1-500" list.  remember the reselling "1-500" fiasco... What was all that about???

[Micky25]

Obviously all the above is kinda ridiculous, because if any company could be able to guarantee any profit by mining they would just mine themselves. Mining with completely specific hardware and not with commodity electronics is leading us to super-professionalized mining scene, where amateurs will be totally cut out. This process is going much faster than some want to believe.

I thought the same before, but then some guys brought up the notion that any large scale commercial operation in this sector has higher operating costs than an individual in the long turn. The hashrate is linear.

"Some guy" was dead wrong.
Large operations have substantially lower initial costs -- from gear quantity discounts to industrial electrical rates.

I totally agree on this, but they have exponential higher fixed costs (AC, rent, maintenance, staff) as well, while income drops at same rate as it does for us.

[markm]

Where do you get electricity cheaper for industrial use than for residential use?

I was told that around here (Nova Scotia) home users are in effect subsidised, if you go industrial you not only pay more but also, if you go big, will end up needing three-phase and such which is more expensive again.

I guess in "screw the poor" nations though they wouldn't be subsidising home users?

("If they want light, let them stay at work!" )

(Maybe it might also have to do with the fact you seem to need electricity in order to get a residence permit saying the building is fit for people to live in.)

-MarkM-

[DeathAndTaxes]

Where do you get electricity cheaper for industrial use than for residential use?

It may vary from country to country or even power company to power company but generally speaking power companies offer lower rates for large commercial/industrial customers.  Small businesses generally pay about the same as residential but above 30KW prices are lower and above 200 KW or so they are significantly lower.  Also companies which need sustained power (i.e. 30KW continually over an entire month) can contract (they pay 30KW regardless of what their sustained usage is) and get even lower rates.   Power companies love sustained usage customers because it is much easier to calculate and load balance.

[markm]

Yeah thats what I thought, but I was told otherwise. Not directly by the power corp though (it is a monopoly here, Nova Scotia Power) so maybe the guy who told me didn't really actually know what he was on about afterall.

Maybe it is patronage or something, if the politicians control the thing, maybe there is no cheap rate for industry but if your industry gets the right politician suddenly you get a government subsidy or something instead.

-MarkM-

[DeathAndTaxes]

Yeah thats what I thought, but I was told otherwise. Not directly by the power corp though (it is a monopoly here, Nova Scotia Power) so maybe the guy who told me didn't really actually know what he was on about afterall.

-MarkM-

It would look like he is incorrect.  Residential customers may be partially subsidized but they still pay more per kWh.  Then again with residential rates @ $15 per kWh in the long run it is unlikely they will be profitable.  Even leasing warehouse space to get large commercial rates wouldn't make much sense as they are still $0.09 per kWh.  There are parts of the US where large commercial power users pay <$0.03 per kWh.

http://www.nspower.ca/en/home/residential/billing/powerrates/default.aspx

[drico]

I feel like everybody here is in front of an apple store waiting for their next crappy phone 

Did you also take a champaign miner?

[Rampion]

Where do you get electricity cheaper for industrial use than for residential use?

It may vary from country to country or even power company to power company but generally speaking power companies offer lower rates for large commercial/industrial customers.  Small businesses generally pay about the same as residential but above 30KW prices are lower and above 200 KW or so they are significantly lower.  Also companies which need sustained power (i.e. 30KW continually over an entire month) can contract (they pay 30KW regardless of what their sustained usage is) and get even lower rates.   Power companies love sustained usage customers because it is much easier to calculate and load balance.

Where I live (Europe) electricity for industrial uses is WAY cheaper than for residential uses. Anyhow, that's pretty much irrelevant. Professional operations will be setup in places where electricity is almost free. In Kuwait, for example, maximum fare is $0.01Kw/h. In North Africa (and I know this first hand), Government incentivizes foreign investment by giving multiple benefits, one of them being free electricity until one point, and "almost free" (<0.01kw/h) after that point. Many energy-hungry industries are flourishing in North Africa because of this.

An individual will NEVER be able to be as efficient as a corporation in a business as is BTC mining as its currently conceived.

[Xialla]

I'm sorry guys & gals, but this time Xallia & Crumbs are right.

When I ordered, It was for September DELIVERY, not September shipping.

Call it what you will... Fact is...   Come Monday... If the miners are not delivered... The miners are late.

thanks. much appreciate this statement..

[DeathAndTaxes]

Where I live (Europe) electricity for industrial uses is WAY cheaper than for residential uses. Anyhow, that's pretty much irrelevant.

Agreed GPU miners in Europe other than those where someone else was paying the power bill ("free power") were the first to drop out.  Right now hardware costs dominate but over the next year prices will drop, mining margins will be compressed and just like GPU mining power will make up a larger portion of the bill.

Professional operations will be setup in places where electricity is almost free. In Kuwait, for example, maximum fare is $0.01Kw/h. In North Africa (and I know this first hand), Government incentivizes foreign investment by giving multiple benefits, one of them being free electricity until one point, and "almost free" (<0.01kw/h) after that point. Many energy-hungry industries are flourishing in North Africa because of this.

One also has to consider the geopolitical risk as well.  Ask companies how much they lost when Chavez started nationalizing foreign assets in Venezuela.

An individual will NEVER be able to be as efficient as a corporation in a business as is BTC mining as its currently conceived.

Never is a strong word.  A company may have cheaper power and mining hardware (although I think in time margins will be so compressed it won't be much cheaper) but it has more expensive "everything else."  Imagine a hypothetical miner in 2015.   He buys mining boards (which by now are very low margin) he constructs his own case/frame powers it from his old ATX power supply, and puts it next to a window with a box fan.  Additional cost beyond hashing equipment and power: ~$0.00.

You can't do that for a PH/s or more.  Take the price of the business property lease, add in employees, add in security (you aren't going to leave you $50M in miners alone at night are you), add in insurance cost, add in fire suppression (might be mandatory in some areas), throw in business taxes, and pile on the additional energy and capital costs for 800 KW of industrial chillers, etc.   Even mundane stuff like enough racks to mount 1 PH/s (you aren't going to just leave them on the floor are you, and the cost of an electrician to run enough drops to power 1,000 or more systems all add up.  All those are Diseconomies of scale.  The company may be cheaper but GH/s but it isn't 10x cheaper like the raw power costs might suggest.  The last thing to consider is cost of capital.  After this gold rush period is over mining isn't a particularly attractive venture from a risk vs reward point of view.  Many investors may look at the small reward, the outsized risk, and the fact that profits are largely determined by the actions of outsiders and simply pass on the millions necessary to build up such a mining farm.


One thing I am particularly interested in is using the "waste heat".  For a large operation (say 1 PH/s = 800 KW = 1 million BTU/hr) they have a lot of waste heat but it has no value.  It actually has negative value as the company will spend money both on hardware and energy to remove that heat.  On the other hand a home user could use waste heat to preheat hot water (free hot water for the rest of your life), and in the winter supplement heating the residence.  With GPU rigs they are too bulky, complex, and skill intensive.  However take some ASICS put them in a compact sealed box, cold water in, hot water out and that "waste heat" suddenly has value.  I am doing some experiments right now.  Interesting stuff.

That being said I do believe large commercial players will make up a significant portion of the network capacity in the future.  I still think hobbyists and small home farmers will exist however they will be in areas of the world with lower than average energy prices (<$0.10 per kWh), generally cooler climates, and may look to thinks like using waste heat to boost ROI%.

[Micky25]

Where do you get electricity cheaper for industrial use than for residential use?

I was told that around here (Nova Scotia) home users are in effect subsidised, if you go industrial you not only pay more but also, if you go big, will end up needing three-phase and such which is more expensive again.

I guess in "screw the poor" nations though they wouldn't be subsidising home users?

("If they want light, let them stay at work!" )

(Maybe it might also have to do with the fact you seem to need electricity in order to get a residence permit saying the building is fit for people to live in.)

-MarkM-

Living in such a nation (germany), I can confirm this. Here companies get subsidized on a energy costs/staff costs formula. So companies only have to get staff from lowcost temp work agencies to achieve overproportional high energy costs, resulting in ridiculous low electricity rates.

Nevertheless, as I said before, I had the same thoughts as you guys, but in the meantime I think energy costs are negligible, considering risks, possible profit, legal questions, management overhead, security, staff and maintenance cost of large scale bitcoin mining operations, there are easier ways to make money and I'm not so sure if small-time miners won't get their second chance in the not so far future - and this persistently.

[crumbs]

...
"Some guy" was dead wrong.
Large operations have substantially lower initial costs -- from gear quantity discounts to industrial electrical rates.

I totally agree on this, but they have exponential higher fixed costs (AC, rent, maintenance, staff) as well, while income drops at same rate as it does for us.

Considering that useful  lifespan of today's mining rigs is ~ 1 year, how much do you suppose it will cost to host it in a makeshift datacenter in a cool climate?

The requirements for mining gear are much more lax than those provided by a typical data center.  AC/air filtration is not needed.  A warehouse space with decent exhaust fans & plain old concrete floor would do (overhead cabling).  The staff could also be very limited -- unlike a typical data center, housing all sorts of funky gear & problems, a mining farm consists of virtually identical gear, with a fixed set of potential problems, requiring basic maintenance & oversight.

Now imagine how much a 4U space would cost you a year, if you rent a warehouse....  Right.  Change, compared to the money you'd save buying that 4U worth of miner wholesale.

Edit:

Nevertheless, as I said before, I had the same thoughts as you guys, but in the meantime I think energy costs are negligible,

These negligible costs could be the difference between keeping the gear mining or tossing it on the trash heap.

 considering risks,

No greater than the risks of privateers, lower risks, actually. Ask me why.

possible profit, legal questions,

A mining farm can choose its locale (where the law loves minerz), you can not.

management overhead,

See before edit.

security,

I'm sure an old rent-a-cop would provide more security than my deadbolt lock & my ferocious cat.

staff and maintenance cost of large scale bitcoin mining operations,

See before edit.

there are easier ways to make money and I'm not so sure if small-time miners won't get their second chance in the not so far future - and this persistently.

There are also harder ways of making money, and they don't scale up as easily as mining.

[nightengale]

I'm sorry guys & gals, but this time Xallia & Crumbs are right.

When I ordered, It was for September DELIVERY, not September shipping.

Call it what you will... Fact is...   Come Monday... If the miners are not delivered... The miners are late.

thanks. much appreciate this statement..

I think someone just withdrew from the fan club...

[Bargraphics]

I'm sorry guys & gals, but this time Xallia & Crumbs are right.

When I ordered, It was for September DELIVERY, not September shipping.

Call it what you will... Fact is...   Come Monday... If the miners are not delivered... The miners are late.

thanks. much appreciate this statement..

I think someone just withdrew from the fan club...

Me and the other members are furious. No more free Kool-Aid for you Phoenix1969!

[NEO2012]

Yeah thats what I thought, but I was told otherwise. Not directly by the power corp though (it is a monopoly here, Nova Scotia Power) so maybe the guy who told me didn't really actually know what he was on about afterall.

-MarkM-

It would look like he is incorrect.  Residential customers may be partially subsidized but they still pay more per kWh.  Then again with residential rates @ $15 per kWh in the long run it is unlikely they will be profitable.  Even leasing warehouse space to get large commercial rates wouldn't make much sense as they are still $0.09 per kWh.  There are parts of the US where large commercial power users pay <$0.03 per kWh.

http://www.nspower.ca/en/home/residential/billing/powerrates/default.aspx

yes then  bfl cosutmers suck donkey balls

thts for sure also

no matter ur power bill

[Rampion]

One also has to consider the geopolitical risk as well.  Ask companies how much they lost when Chavez started nationalizing foreign assets in Venezuela.

Following my experience that is an extreme example. Billion $ companies base their operations in countries where the geopolitical risk is theoretically high, but nevertheless the profit is well worth that risk.

As I said earlier, I've seen first hand a few big european companies opening factories in North Africa to be more competitive. There are many benefits (operational costs are lower in general), but especially for companies for which electricity is massive cost, moving abroad is a no-brainer. When you are used to pay 6/7 figures in monthly electricity bills, a mild geopolitical risk is nothing compared to savings

An individual will NEVER be able to be as efficient as a corporation in a business as is BTC mining as its currently conceived.

Never is a strong word.  A company may have cheaper power and mining hardware (although I think in time margins will be so compressed it won't be much cheaper) but it has more expensive "everything else."  Imagine a hypothetical miner in 2015.   He buys mining boards (which by now are very low margin) he constructs his own case/frame powers it from his old ATX power supply, and puts it next to a window with a box fan.  Additional cost beyond hashing equipment and power: ~$0.00.

You can't do that for a PH/s or more.  Take the price of the business property lease, add in employees, add in security (you aren't going to leave you $50M in miners alone at night are you), add in insurance cost, add in fire suppression (might be mandatory in some areas), throw in business taxes, and pile on the additional energy and capital costs for 800 KW of industrial chillers, etc.   Even mundane stuff like enough racks to mount 1 PH/s (you aren't going to just leave them on the floor are you, and the cost of an electrician to run enough drops to power 1,000 or more systems all add up.  All those are Diseconomies of scale.  The company may be cheaper but GH/s but it isn't 10x cheaper like the raw power costs might suggest.  The last thing to consider is cost of capital.  After this gold rush period is over mining isn't a particularly attractive venture from a risk vs reward point of view.  Many investors may look at the small reward, the outsized risk, and the fact that profits are largely determined by the actions of outsiders and simply pass on the millions necessary to build up such a mining farm.


One thing I am particularly interested in is using the "waste heat".  For a large operation (say 1 PH/s = 800 KW = 1 million BTU/hr) they have a lot of waste heat but it has no value.  It actually has negative value as the company will spend money both on hardware and energy to remove that heat.  On the other hand a home user could use waste heat to preheat hot water (free hot water for the rest of your life), and in the winter supplement heating the residence.  With GPU rigs they are too bulky, complex, and skill intensive.  However take some ASICS put them in a compact sealed box, cold water in, hot water out and that "waste heat" suddenly has value.  I am doing some experiments right now.  Interesting stuff.

That being said I do believe large commercial players will make up a significant portion of the network capacity in the future.  I still think hobbyists and small home farmers will exist however they will be in areas of the world with lower than average energy prices (<$0.10 per kWh), generally cooler climates, and may look to thinks like using waste heat to boost ROI%.

I think you are assuming that efficient mining equipment will be generally available, and I doubt that. People with free electricity could keep mining with GPUs indefinitely, but the fact is that their hashrate is already a drop in the ocean. I think there will be a moment in which the most advanced ASIC will just be in the hands of big corporations with the means to fully develop their own chips & hardware, and thus the home miners will be a negligible part of the hashrate, which actually means they were "cut out", because they cannot compete with corporations.

I might be wrong, we will see - it's nevertheless an exciting, game-changing time. I also think your experiments about "waste heat" are extremely interesting. While the home miner as we conceive it might be a walking dead, a newborn "rational" miner might be on the way - and that could really be a new paradigm. I can imagine a future in which the hardware that secures the network is warming our homes and our water, and I like it

[crumbs]

... I can imagine a future in which the hardware that secures the network is warming our homes and our water, and I like it

Unfortunately this is already being exploited to greenwash BTC mining.  IceDrill claims to be using the waste heat from its mining farm to offer hot water heating to an apartment complex (if i remember right).  But yeah, waste heat could be used for anything, up to preheating water for steam turbines that run the generators that power the farm