mikeywith (OP)
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April 28, 2022, 04:17:41 AM Merited by DaveF (4), hugeblack (4), 1miau (4), philipma1957 (2), stompix (2), wndsnb (2), OgNasty (1), vapourminer (1), malevolent (1), ABCbits (1), DdmrDdmr (1) |
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A few days ago, one of the largest host providers 'Compass Mining' was hit by U.S sanctions against Russia (this is not a political discussion, I will report any off-topic).
Compas is a U.S based company that sells mining gear with hosting services included, thousands of people overpaid (around 13k) for a miner, when the war started, they sent out emails telling their clients not to worry and don't rush to move their miners and that they "Compass" can handle the situation if needs handling.
A few days ago, they sent out emails telling their clients that the new sanctions require them to stop dealing with the Russian host and the clients have two options.
1-Pass ownership for their miners to Compass mining so that they can liquidate the gears in Russia on their behalf. 2-Contact the Russians directly and deal with your own problem (not recommended by them because of a high risk of losing the gears).
Today, someone reported that they will get 4.5k for the gear he bought for 13k (probably an S19 or M30) although that isn't likely because s19s brand new go for 7k range, these are used miners that MUST sell fast, and where? in a heavily sanctioned country, so only some Russian whale may buy them, so my guess is, not even 4.5k is possible.
The moral of the story: having someone else host your gear is very risky even if the company is based in your country and you think they can be highly trusted, it's not about Russia, it could be anywhere else, you can't control the outcome, you may never know when you might be forced to pass ownership of your miners and hope the host can sell your mining gears for whatever they can, and you won't be able to reject the offer regardless of how much your gear is actually worth.
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un_rank
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April 28, 2022, 04:40:35 AM |
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Goodday mikeywith, Please, can you explain what "hosted mining" is? I did a quick Google search on it and it seems to be a sort of system where the service provider manage your mining gear for you rather than you dealing with the logistics. Most of the relevant search results I got were from companies that offer such service, so I am not sure if I should entirely trust it, as they would definitely market their service.
In hosted mining would I still provide the electricity? What exact logistics does the company handle?
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mikeywith (OP)
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In hosted mining would I still provide the electricity? What exact logistics does the company handle?
First thing first, you should assume that the majority of those services are scams, so don't send your gears until you have done your research, however, the legal ones operate as follows. They provide the infrastructure like internet, electricity, cooling, and all that's needed for mining gears to run, and then they will make you sign a contract to pay x amount per KwH your miner uses, an example: Your miner is 1*S19 pro, it consumes 3kWh, and you pay them 10 cents per kWh, so you pay them 0.1*3*24 = 7.2$ daily, of course, they won't collect the fees daily, maybe monthly, maybe yearly, it all depends on their terms and conditions. These folks supposedly pay less to the power company, so maybe 0.5 cents per kWh, so for every S19 they host, they make 3.6$ daily minus all the operation fees they have to handle, you as a client get your miner up and running by them, pointed to your pool, you make money, they make money, and everyone is happy until someone is not. Compass on the other hand offers a sort of a modified version of the basic hosting, while the majority of other hosts will ask you to send your mining gears to them, with Compass you will have to buy the gear from them, by selling you an "overpriced" mining gear, they make some good money, and then again, more money for the hosting services. There are many things that can go wrong with this business model, most hosts won't let you see your miners in person, they can just tell you "your miner is dead" and need fixing, send us $300 in fees, and if you decide to take your miner, they might ask you for another $300 for uninstallation and packing fees, it's doesn't matter how good the host is, they will have the upper hand in this mess. With that said, there could be and probably are some honest and good hosts, and to get a good power rate, sometimes your place is not an option, so this hosting stuff might be your only option if you really want to mine, but then, it comes with an added risk.
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Coinfarm ventures
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April 28, 2022, 05:17:27 AM Last edit: April 28, 2022, 05:29:55 AM by Coinfarm ventures Merited by vapourminer (2) |
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With that said, there could be and probably are some honest and good hosts, and to get a good power rate, sometimes your place is not an option, so this hosting stuff might be your only option if you really want to mine, but then, it comes with an added risk.
I met with another miner dude to consider starting a warehouse for hosting purposes. But after looking at the spreadsheets as well as the upfront cost required to upgrade a warehouse electric supply to 1MW, we realized it was an awful idea. Even if we charged customers 11 cents on a 12-month contract, making a profit would be very hard if the underlying power cost was 5-6 cents. It would take a year to pay off the initial $50-80k in startup costs. There would be no profit for 6-8 months as we would go through the long engineering process of getting a new transformer. The only way to turn a profit quickly would be deceiving the customers, which was unacceptable. This is why I believe so many cloud mining / colocation farms cheat the customer. Both the host and the customer are locked into a certain wattage and cannot adjust efficiency or liquidate the equipment, even if they think the market will go down. Better to go with GPU mining and invest all of that $50-80k into viiideoo cardz without having to rent a warehouse! Personally I decided to focus on new business ideas instead of copying thousands of other miners with much deeper pockets.
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un_rank
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@mikeywith Thank you for the explanation, it's a lot clearer now I've not considered mining as yet, but if I do, I know what to avoid now.. I have one more question? Do these hosting service pool the hashrate of the different mining gear contracted to them to gain an advantage in finding blocks, and then distribute the reward among all the available miners? Or is there a way for someone on the outside to verify this at all?
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mikeywith (OP)
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April 29, 2022, 03:47:47 AM |
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I have one more question? Do these hosting service pool the hashrate of the different mining gear contracted to them to gain an advantage in finding blocks, and then distribute the reward among all the available miners? Or is there a way for someone on the outside to verify this at all?
Usually, your miners will be pointed to your own pool, the host doesn't own a pool nor is responsible for that part, you provide them your main pool and two back up pools and they will set the miners up for you, depending on how well built the facility is, this could be done via basic methods like an email or an online portal which you use to set up your pools and then they use some sort of a script that would copy-paste your workers from that database to your miners, some hosts could give you direct access to your miner using some of the technologies available. Different hosts will have different ways of dealing with that, but the common thing is that every owner will decide the pool they want for their miners.
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safar1980
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April 30, 2022, 08:51:52 PM |
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If you lived in Russia, you would understand the risks that you need to consider when transferring mining equipment to other companies. Therefore, in Russia we mine in our homes or other safe places.
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philipma1957
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April 30, 2022, 09:42:49 PM |
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If you lived in Russia, you would understand the risks that you need to consider when transferring mining equipment to other companies. Therefore, in Russia we mine in our homes or other safe places.
I am USA based I can get a good deal in Canada and I won't do it because their PM is very anti BTC and the last thing I need to do is setup a 1 megawatt container in Canada subject to their wims and fancies.
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Coinfarm ventures
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May 01, 2022, 04:00:07 AM |
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I am USA based I can get a good deal in Canada and I won't do it because their PM is very anti BTC and the last thing I need to do is setup a 1 megawatt container in Canada subject to their wims and fancies.
I will never open a mining operation in New York for the same reason even though it's convenient for me! Yes, their electricity is cheap and the weather is colder, but is it worth fighting a bunch of old buereaucrats downstate who are alumni of Goldman/JPMorganChase/Citi who trash PoW as well as decentralized currencies? Hell no! Texas it is 🤠
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safar1980
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May 01, 2022, 05:59:15 PM |
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If you lived in Russia, you would understand the risks that you need to consider when transferring mining equipment to other companies. Therefore, in Russia we mine in our homes or other safe places.
I am USA based I can get a good deal in Canada and I won't do it because their PM is very anti BTC and the last thing I need to do is setup a 1 megawatt container in Canada subject to their wims and fancies. I think every country has its own problems. In Russia, you can find electricity for 1.5 cents, but you will not have guarantees for the safety of storing your equipment. Therefore, it is better to mine at home, but pay several times more.
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philipma1957
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May 01, 2022, 06:35:15 PM |
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I am USA based I can get a good deal in Canada and I won't do it because their PM is very anti BTC and the last thing I need to do is setup a 1 megawatt container in Canada subject to their wims and fancies.
I will never open a mining operation in New York for the same reason even though it's convenient for me! Yes, their electricity is cheap and the weather is colder, but is it worth fighting a bunch of old buereaucrats downstate who are alumni of Goldman/JPMorganChase/Citi who trash PoW as well as decentralized currencies? Hell no! Texas it is 🤠 We have the solar angle here in NJ which makes it decent. We may build in nearby PA in carbondale as we can get 1 megawatt at 4 cents, but it is coal based power.
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Coinfarm ventures
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We have the solar angle here in NJ which makes it decent.
We may build in nearby PA in carbondale as we can get 1 megawatt at 4 cents, but it is coal based power.
IDK how you can get 4¢ in PA unless you have a special deal with a power plant. The best-case scenario in the PECO service area with PJM index pricing, primary service and curtailment seems to be 6¢. Most places are 7-8.5¢. I spent days researching this. The other utilities (WestPenn/PPL/PenElec) charge more than PECO. At least that's better than Joisey, where the lowest possible price (with PSE&G) is 7¢ while most small warehouses are 8-9¢. It might even be a cent higher this year with all the crappy ESG riders that were added to the tariff. I had to pay a ridiculous 11¢ in 2018 with JCP&L but thank god that was for GPU mining; I decided to pay the higher rate because that warehouse already had 1200A of power installed instead of 400A. Screw FirstEnergy. Of course, I called the utilities to verify these numbers. Delaware is as bad as NJ, but at least there is no sales tax on power or equipment. In northern Texas for ONCOR you can subtract 2¢ from the PA numbers. With ERCOT index energy, curtailment (96% uptime) and 500+ kW of primary service, the rate for the last 12 months was 5.1-5.5¢. I coded up a script to pull historical ERCOT prices and consulted with an energy broker to verify these numbers. Ultimately it was a no-go decision for other reasons, but TX seems to be the best place to start a farm for me.
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kano
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May 02, 2022, 02:11:27 AM |
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... The only way to turn a profit quickly ...
... so many people think "Wow Bitcoin Quick Money" Delusion.
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safar1980
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May 02, 2022, 10:51:54 AM |
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I am USA based I can get a good deal in Canada and I won't do it because their PM is very anti BTC and the last thing I need to do is setup a 1 megawatt container in Canada subject to their wims and fancies.
I will never open a mining operation in New York for the same reason even though it's convenient for me! Yes, their electricity is cheap and the weather is colder, but is it worth fighting a bunch of old buereaucrats downstate who are alumni of Goldman/JPMorganChase/Citi who trash PoW as well as decentralized currencies? Hell no! Texas it is 🤠 We have the solar angle here in NJ which makes it decent. We may build in nearby PA in carbondale as we can get 1 megawatt at 4 cents, but it is coal based power. Are you talking about thermal power plants? Is it so easy for you to build an electric power plant? Or can you buy electricity from this plant? It is possible to do this in our country, but consumption should be at least a megawatt.
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OgNasty
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May 02, 2022, 06:22:27 PM |
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Crazy story...
Not your hardware, not your hashes, am I right?
I get that when it comes to mining it's the low cost of electricity that dominates. It is important to remember that more hands in the cookie jar is not always the best solution though. When you use a company like Compass, they have to make money, their service providers need to make money, the equipment manufacturers need to make money, etc... There are a lot more costs. Sure, the cheaper electricity and less hassle might make it worth it, but there's also plenty more risk added with each person that has their hand out. This is demonstrated well with this story.
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..Stake.com.. | | | ▄████████████████████████████████████▄ ██ ▄▄▄▄▄▄▄▄▄▄ ▄▄▄▄▄▄▄▄▄▄ ██ ▄████▄ ██ ▀▀▀▀▀▀▀▀▀▀ ██████████ ▀▀▀▀▀▀▀▀▀▀ ██ ██████ ██ ██████████ ██ ██ ██████████ ██ ▀██▀ ██ ██ ██ ██████ ██ ██ ██ ██ ██ ██ ██████ ██ █████ ███ ██████ ██ ████▄ ██ ██ █████ ███ ████ ████ █████ ███ ████████ ██ ████ ████ ██████████ ████ ████ ████▀ ██ ██████████ ▄▄▄▄▄▄▄▄▄▄ ██████████ ██ ██ ▀▀▀▀▀▀▀▀▀▀ ██ ▀█████████▀ ▄████████████▄ ▀█████████▀ ▄▄▄▄▄▄▄▄▄▄▄▄███ ██ ██ ███▄▄▄▄▄▄▄▄▄▄▄▄ ██████████████████████████████████████████ | | | | | | ▄▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▄ █ ▄▀▄ █▀▀█▀▄▄ █ █▀█ █ ▐ ▐▌ █ ▄██▄ █ ▌ █ █ ▄██████▄ █ ▌ ▐▌ █ ██████████ █ ▐ █ █ ▐██████████▌ █ ▐ ▐▌ █ ▀▀██████▀▀ █ ▌ █ █ ▄▄▄██▄▄▄ █ ▌▐▌ █ █▐ █ █ █▐▐▌ █ █▐█ ▀▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▀█ | | | | | | ▄▄█████████▄▄ ▄██▀▀▀▀█████▀▀▀▀██▄ ▄█▀ ▐█▌ ▀█▄ ██ ▐█▌ ██ ████▄ ▄█████▄ ▄████ ████████▄███████████▄████████ ███▀ █████████████ ▀███ ██ ███████████ ██ ▀█▄ █████████ ▄█▀ ▀█▄ ▄██▀▀▀▀▀▀▀██▄ ▄▄▄█▀ ▀███████ ███████▀ ▀█████▄ ▄█████▀ ▀▀▀███▄▄▄███▀▀▀ | | | ..PLAY NOW.. |
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safar1980
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May 03, 2022, 03:49:26 PM |
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Crazy story...
Not your hardware, not your hashes, am I right?
I get that when it comes to mining it's the low cost of electricity that dominates. It is important to remember that more hands in the cookie jar is not always the best solution though. When you use a company like Compass, they have to make money, their service providers need to make money, the equipment manufacturers need to make money, etc... There are a lot more costs. Sure, the cheaper electricity and less hassle might make it worth it, but there's also plenty more risk added with each person that has their hand out. This is demonstrated well with this story.
There have been a lot of cloud mining scams in Russia, and so many companies have gone bust or their directors have been accused of fraud. In Russia, a lot of people know that cloud mining is a scam, because over time the company stops paying for various reasons, like the price of electricity has risen and so on.
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spectre71
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May 03, 2022, 04:44:44 PM |
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We have the solar angle here in NJ which makes it decent.
We may build in nearby PA in carbondale as we can get 1 megawatt at 4 cents, but it is coal based power.
IDK how you can get 4¢ in PA unless you have a special deal with a power plant. The best-case scenario in the PECO service area with PJM index pricing, primary service and curtailment seems to be 6¢. Most places are 7-8.5¢. I spent days researching this. The other utilities (WestPenn/PPL/PenElec) charge more than PECO. At least that's better than Joisey, where the lowest possible price (with PSE&G) is 7¢ while most small warehouses are 8-9¢. It might even be a cent higher this year with all the crappy ESG riders that were added to the tariff. I had to pay a ridiculous 11¢ in 2018 with JCP&L but thank god that was for GPU mining; I decided to pay the higher rate because that warehouse already had 1200A of power installed instead of 400A. Screw FirstEnergy. Of course, I called the utilities to verify these numbers. Delaware is as bad as NJ, but at least there is no sales tax on power or equipment. In northern Texas for ONCOR you can subtract 2¢ from the PA numbers. With ERCOT index energy, curtailment (96% uptime) and 500+ kW of primary service, the rate for the last 12 months was 5.1-5.5¢. I coded up a script to pull historical ERCOT prices and consulted with an energy broker to verify these numbers. Ultimately it was a no-go decision for other reasons, but TX seems to be the best place to start a farm for me. 4.3 cents here in Oklahoma primarily wind and hydro. That why google is here and Northern Data is in the process of 250Mw facility.
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Coinfarm ventures
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May 03, 2022, 08:16:46 PM |
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4.3 cents here in Oklahoma primarily wind and hydro.
Is this a private deal with a power plant? I don't think you can get below 5 cents on publicly available tariffs in most states.
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stompix
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May 04, 2022, 06:57:04 PM Last edit: May 04, 2022, 10:09:02 PM by stompix |
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Now this one is a mess, I can remember a lot of the topics in which people took the offers from compass mining as a basic starting point for setting their new mining adventure, this is going to hurt probably a lot. But I don't get this: 1-Pass ownership for their miners to Compass mining so that they can liquidate the gears in Russia on their behalf. 2-Contact the Russians directly and deal with your own problem (not recommended by them because of a high risk of losing the gears).
Why not 3, have the gear they've bought shipped to their homes? F! the sanctions excuse, Compass could have simply pulled out all that gear, there are thousands of trucks still moving goods between Russia and the rest, no way they would be forced at gunpoint to sell it. Far more likely this is far worse than that and there was actually no real ownership over the miners, just bought hashrate from some farm in Russia, wouldn't be the first or the last. Better to go with GPU mining and invest all of that $50-80k into viiideoo cardz without having to rent a warehouse!
And see your used cards drop to half the price and the income by 90% if Butterrin farts in his sleep and decides to push PoS tomorrow.
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..Stake.com.. | | | ▄████████████████████████████████████▄ ██ ▄▄▄▄▄▄▄▄▄▄ ▄▄▄▄▄▄▄▄▄▄ ██ ▄████▄ ██ ▀▀▀▀▀▀▀▀▀▀ ██████████ ▀▀▀▀▀▀▀▀▀▀ ██ ██████ ██ ██████████ ██ ██ ██████████ ██ ▀██▀ ██ ██ ██ ██████ ██ ██ ██ ██ ██ ██ ██████ ██ █████ ███ ██████ ██ ████▄ ██ ██ █████ ███ ████ ████ █████ ███ ████████ ██ ████ ████ ██████████ ████ ████ ████▀ ██ ██████████ ▄▄▄▄▄▄▄▄▄▄ ██████████ ██ ██ ▀▀▀▀▀▀▀▀▀▀ ██ ▀█████████▀ ▄████████████▄ ▀█████████▀ ▄▄▄▄▄▄▄▄▄▄▄▄███ ██ ██ ███▄▄▄▄▄▄▄▄▄▄▄▄ ██████████████████████████████████████████ | | | | | | ▄▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▀▄ █ ▄▀▄ █▀▀█▀▄▄ █ █▀█ █ ▐ ▐▌ █ ▄██▄ █ ▌ █ █ ▄██████▄ █ ▌ ▐▌ █ ██████████ █ ▐ █ █ ▐██████████▌ █ ▐ ▐▌ █ ▀▀██████▀▀ █ ▌ █ █ ▄▄▄██▄▄▄ █ ▌▐▌ █ █▐ █ █ █▐▐▌ █ █▐█ ▀▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▄▀█ | | | | | | ▄▄█████████▄▄ ▄██▀▀▀▀█████▀▀▀▀██▄ ▄█▀ ▐█▌ ▀█▄ ██ ▐█▌ ██ ████▄ ▄█████▄ ▄████ ████████▄███████████▄████████ ███▀ █████████████ ▀███ ██ ███████████ ██ ▀█▄ █████████ ▄█▀ ▀█▄ ▄██▀▀▀▀▀▀▀██▄ ▄▄▄█▀ ▀███████ ███████▀ ▀█████▄ ▄█████▀ ▀▀▀███▄▄▄███▀▀▀ | | | ..PLAY NOW.. |
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mikeywith (OP)
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May 04, 2022, 10:05:17 PM Last edit: May 05, 2022, 02:58:09 AM by mikeywith |
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the cheaper electricity and less hassle might make it worth it, but there's also plenty more risk added with each person that has their hand out. This is demonstrated well with this story.
They paid a few extra thousands just to get their gears hosted by Compass, while the power rate was tempting in Russia, I am sure the price difference would pay the power bill at least for the first year (it was anywhere from 2k to 5k) depending on the gear price at that time, but well, sadly newbies have to pay the price twice for not doing enough research. F! the sanctions excuse, Compass could have simply pulled out all that gear, there are thousands of trucks still moving goods between Russia and the rest, no way they would be forced at gunpoint to sell it.
I can't accuse them of anything without solid proof, however, I can speculate as well. Another point is the fact that they could have delayed responding to the Sanctions, I mean come on! it's not like the U.S police were pointing a gun at Compass's owners telling them to end the deal with the Russian host right now, EU sanctioned everyone in Russia (most of them don't even matter) and they shut their eyes on the Gas companies because well, you can't hurt your own people this way, Compass could have saved those newbies if they wanted, the law isn't black and white, there is always a way to reduce damage if there is a will, but it could be that they intentionally used this excuse to force the clients to sell their gears for cheap, for all we know, the gears could still be mining to Compass "new address" after they bought them 'back' for dust, but we don't know, do we? Farm more likely this is far worse than that and there was actually no real ownership over the miners, just bought hashrate from some farm in Russia, wouldn't be the first or the last.
That's also a good possibility, Compass is known for having long delays. What's even worse, many people paid for future orders, not sure how Compass is going to handle that, imagine selling a gear you never saw hashing for 4k or less after paying 10k or more for it, that would be more painful than having had the miner run for a few months at least.
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