I can develop low cost electric power, what are my options on what to do with it

[Wudcutter]

Hello, I'm new to this forum, third post. Actually I posted this in the general discussions, was told to post this here. I work in the oil and gas industry and have access to very low cost natural gas. I am looking at running used continuous rated gas generators to produce power to run mining farms.

My calculations show well under $.05 kWh. Gas is in remote locations. Looking for best ideas on how to support mining and make some money. I plan on running my farm, operating farm for associated producer, considering hosting, just providing the power to someone. Other Ideas? Located in central upstate New York, and Northwest Penn. USA Thanks.

[philipma1957]

5 cents has reached the point of only being an okay price

3 cents is good.

times are hard right now.

A lot of my advice to you is based on your infrastructure.

Do you have a building?
Can you vent it?
Can you wire it cheaply?
Are you counting the generator as part of the 5 cents a kwatt

What can you do for internet?

At five cent power.

you need the building in place already.

if you are renting or building out your space that five cost goes way up.

[Steamtyme]

Plan and wait.
Not sure how much you've looked into the halving event or the profitability of mining but it's grim at the moment. Phil nailed it and today does not offer a great outlook on mining over just purchasing BTC for most people. Now if you wait a little while and take that time to research your equipment so that you are ready to roll as things become more promising. Especially pricing out a generator for the site(s). Here is a topic for getting started.
First time/Small miner reference for getting started.
Where it links to competitive hardware the efficiencies will give you a good idea of what sort of gear you'll need to be looking for.
Personally I have shutdown my home farm for a while to wait on Diff and price to adjust. Gives me a chance to clean/repair and relocate.

[Welsh]

Remember, to factor in other costs such as building, venting, maintenance and time for managing all of the miners. Electricity costs is just one of the factors to consider.  Mining has just become a little less desirable to get into with the recent halving event, but its still, and always will be profitable. Generally, if you're going to take it seriously, and have the capital to invest into it then going with a lot of miners would be the better option for long term profitability. Then you need to consider ways of keeping the warehouse/housing cool. You can always use a Bitcoin mining difficulty calculator, and figure out a comfortable amount of profit for you, and then determine how many miners would be needed to achieve that.

Unfortunately we can't give much information, because only you know the amount of space you have, the amount of starting capital you have, and how much time you want to invest into this project. Its not as simple as buying the miners turning them on, and earning profit. If you're not familiar with the process of setting up miners, then it can take some time to setup, and then there's maintenance if anything goes wrong, keeping the building cool to make sure everything is running as smooth as possible as well as extending the longevity of the miners. Write up a floor plan, and determine whether or not you can get wired internet connections to the devices to run them at max efficiency as a wifi connection especially if its in a remote location could be problematic.

- Determine your starting capital
- How many miners can you fit in the building
- What temperature is the building on average (do you need advanced cooling?)
- Figure out the profitability of one miner via calculating the difficulty, cost, and hash rate

[Wudcutter]

Thanks guys, three good pieces of advice! A little more background. I'm new to the forum, not new to mining. Been mining only four years, got into it early enough to get the crypto fever. Started with GPU rigs, ETH, migrated to S9's, BTC. Sold most of the S9's, just shut down the last few, tired of the noise and heat. Stopped driving through the fast food for breakfast once a week, breaking even now.

Anyways price per kWh for gen set is hard to nail down. I took price for gen set + cost to ship, first service, truck to site and set up. Then added $3600 for oil changes, and $3000 for other maintenance for the year. Then added $12,000 for shipping container and build out, everything between gen set and miner.

Add this all up, de-rate the gen set capacity 20% for power factor. Divide the total gen set and build out costs by the total kWh in a year. That's gen set cost. Calculate fuel costs, add to the gen costs, still below the $.05 kWh. All this with thought gen set needs overhaul at the end of 1 year.

Total costs for second and third year still lower yet, after new engine. All other costs paid for.

Big problem is the internet. The locations I get cheapest gas are very remote. See my other post seeking help with internet.

The cheap gas available varies for each location. Runs from single 200kw gen set to about 1 MW at a single location.  Passed all this by fellow engineer/good friend in the gas business, says he can come up with same low price gas for 100MW. I told him to slow down.

I think nat gas gen sets is the way to go for all US based crypro mining going forward.  Thanks again for the comments, keep them coming.

[philipma1957]

So lets say you are truly 5 cents.

I moved it up to five even to account for dead miners.

200kwatt gen burning 160kwatts allows  for 50 s17e miners.

they cost 160 x 24 = 3840 kwatts a day.

make it 4000 which is 200 a day.

50 miners will do 3ph  they earn about 260 a day.   this is only about 60 profit

50 of those units are about 40 k plus shipping and tax.

maybe 50k you worked in all your other expenses into power cost.

pretend you were perfectly accurate.

If you clear 60 a day 850 days later. you paid off the mining gear.

you need to understand those 50 units will break somewhat.

Oh you will also have to,wait at least a few weeks to get the gear.

I might setup the farm with zero gear ⚙️ Maybe only 25000 out of pocket.

they buy units slowly.

[SatsLife]

How much mcf can you produce?

[Wudcutter]

There are many locations we are looking at. Best one with lowest price gas is about 300 mcf per day. Problem here is lack of high speed internet.

When I looked really hard, but didn't follow through with this plan, about 2 years ago,  no one was interested unless I could build out at least 300 mcf per day. Around 1MW. Lacked the capital at that time.

[jbillk]

Just from my experience, Running a generator  24/7, 365 in a remote location can be very expensive. Lots of moving parts, and if it goes down, be ready to pay a field mechanic an arm and a leg to fix it, Especially if its far away from a major city.

Mining is a long grind, it may be a couple years before you ROI,  Capital cost on top of the quickly depreciating miners will kill you.

Personally I don't invest for anything more than 6 month ROI, given the volatility, and ever increasing efficiency of new gear.