How much for a mining pool?

[seongyupyoo]

I'm curious how much it would cost to buy a mining pool, or have one built. Can anyone shed some light on the subject? Thanks.

[AmericanBit]

1 BILLION dollars muwahahaha...no j/k im curious too 

[Kenshin]

Every thing you want to know is here:
http://www.cryptobadger.com/build-your-own-litecoin-mining-rig/

He is talking about mining pool. Not mining rig. 

[srneto]

 

[Kenshin]

I think I just found the answer. https://github.com/TheSerapher/php-mpos

You will need to have a VPS.

[ivroer]

I'm curious how much it would cost to buy a mining pool, or have one built. Can anyone shed some light on the subject? Thanks.

Buy Existing Pool:
 You could theorize how much one would cost based on their current hashing power, profit taken, and factor in some risk and general interest/return rates for similar types of investments.

Disclaimer: most of these figures are very rough ball-park numbers, I'm not attempting to accurately appraise any specific Bitcoin mining pool.

For example let's say ACME Mining Pool has around 325 TH/s power, and at current difficulty they are mining about 7 blocks a day. For the sake of simplicity, let's assume that ACME has been around awhile and has some loyal miners who are actively expanding their operations and the pool will retain it's percentage of the global hashing power even with the difficulty increasing.

25 coins * 7 blocks * 365 days = 63,875 bitcoin revenue per year.

Now remember the mining pool industry is very competitive, only a small percentage is left after paying the employees (miners).
Let's say ACME pays miners 98% of revenue, running costs are 0.25% of total revenue, leaving 1.75% for profit.

1.75% * 63,875 = 1,117.8125 annual bitcoin profit

There are many different ways to value a business. But one simple way of looking at it would be to look at interest rates where a potential buyer or the current business owner (let's say they're retiring) can earn interest on investment.

Let's say with a large investment they can net 10% annual ROI with a medium risk portfolio.

To make the same amount of bitcoin a year, by using the other investment -- they would have to invest 11,178.125 bitcoin!


I'd be interested to see what other people think of this. Criticisms welcomed.

[seongyupyoo]

I'm curious how much it would cost to buy a mining pool, or have one built. Can anyone shed some light on the subject? Thanks.

Buy Existing Pool:
 You could theorize how much one would cost based on their current hashing power, profit taken, and factor in some risk and general interest/return rates for similar types of investments.

Disclaimer: most of these figures are very rough ball-park numbers, I'm not attempting to accurately appraise any specific Bitcoin mining pool.

For example let's say ACME Mining Pool has around 325 TH/s power, and at current difficulty they are mining about 7 blocks a day. For the sake of simplicity, let's assume that ACME has been around awhile and has some loyal miners who are actively expanding their operations and the pool will retain it's percentage of the global hashing power even with the difficulty increasing.

25 coins * 7 blocks * 365 days = 63,875 bitcoin revenue per year.

Now remember the mining pool industry is very competitive, only a small percentage is left after paying the employees (miners).
Let's say ACME pays miners 98% of revenue, running costs are 0.25% of total revenue, leaving 1.75% for profit.

1.75% * 63,875 = 1,117.8125 annual bitcoin profit

There are many different ways to value a business. But one simple way of looking at it would be to look at interest rates where a potential buyer or the current business owner (let's say they're retiring) can earn interest on investment.

Let's say with a large investment they can net 10% annual ROI with a medium risk portfolio.

To make the same amount of bitcoin a year, by using the other investment -- they would have to invest 11,178.125 bitcoin!


I'd be interested to see what other people think of this. Criticisms welcomed.

That sounds about right. I doubt any established pool operator would want to retire/sell the business. What about just having someone setup a brand new mining pool? How much would that cost?

[eleuthria]

While the 10x net isn't an unusual valuation for an established business, it's not even close to accurate for a startup business, especially ones in a high risk environment like Bitcoin.  You'd be looking more at a valuation of 1-2x annual net, if that.

[seongyupyoo]

How about hiring a developer or two to make a brand new pool? How much would that cost?

[Kenshin]

How about hiring a developer or two to make a brand new pool? How much would that cost?

Why re-invent the wheel? There are a lot of different open source mining pools, you can install on a server.

[ivroer]

While the 10x net isn't an unusual valuation for an established business, it's not even close to accurate for a startup business, especially ones in a high risk environment like Bitcoin.  You'd be looking more at a valuation of 1-2x annual net, if that.

Very true, I thought about this fact while I writing the example. But as pointed out, I don't think any mining pool operators are in a hurry to offload their business to someone else; so I left my valuation high for the hypothetical ACME Mining Pool, because to really buy an existing pool you'd have to bid high enough to make the owner consider selling.

How about hiring a developer or two to make a brand new pool? How much would that cost?

Why re-invent the wheel? There are a lot of different open source mining pools, you can install on a server.

I agree. There's plenty of resources available out there to setup [at low cost] the foundations for a mining pool operation. The hard part is marketing your business at miners so they feel compelled to move some of their hashing power to your pool. The incentives are probably going to be the expensive / risky part of the operation.

You'll probably need to purchase some of your own mining gear with some "heavy" hashing power, or a big investment in cloud hashing. Without some anchor hashing power I think you'd struggle to achieve any gravity. You're going to have to set your payout % really high or have some other bonus incentives to lure in the miners, but you'll also need to convince them to stay after your start-up capital has been expended on pulling them in with bonuses.

I've thought about doing some market research on this subject before, but have yet to commit the time to it.

Good luck in your endeavors!

[seongyupyoo]

How about hiring a developer or two to make a brand new pool? How much would that cost?

Why re-invent the wheel? There are a lot of different open source mining pools, you can install on a server.

How much would one charge to have one setup?

[ccooiinnzz]

How about hiring a developer or two to make a brand new pool? How much would that cost?

Why re-invent the wheel? There are a lot of different open source mining pools, you can install on a server.

How much would one charge to have one setup?

If only you have good negotiation skills...