Mining resources hosting/leasing service, worth it?

[bulanula]

Bad luck of the (electrical) draw.  If you had everything the same and operated in Wyoming with <6 cent electrical rates I might ship all my equipment to you and rent a cage.

Wow that is one mighty low electrical rate!

So your 1st year cost for 7970 with assumed 150W with overheads and GPU cost of 530$ is about: 608$! 467€ ... Wow. That is amazing!
My electricity cost alone is 170€ / 221$. And they say Finland is the promised country of Cloud ....

In your case you would however benefit from less hassle, but that's it.

A correction my electrical rate isn't 6 cents.  I was just saying I would colocate my mining hardware to your location if you could offer 6 cent electrical rates (plus some rent for cage space).

I would actually consider setting up something like this if it wasn't for the shipping costs, handling costs, maintenance needed etc.

Definitely need to have a dedicated person there 24/7 in case something goes wrong with so many miners and HW at your disposal etc.  

Do you have this OP ?  

Not sure of your question. Do you mean a person available to goto the location 24/7? Well the 2nd location is just 22km from where i live - So yes Takes 30mins for me to drive there, and i do hang around there for other reasons once or twice a week when i can.
It functions as our warehouse, plus i assemble stuff there etc.

No matter what, i will be placing my own rigs there. Only thing scares me is the temperatures in end of July, early August.

Average summer temperature is just ~18C for past few years (VERY HOT relatively), 1971-2000 average summer temp 15.9C, 30km south of the location.

That is exactly what I meant. If I was doing this sort of thing I would make sure to be there physically myself or leave someone there at all times to watch over the rigs. Even 30 minutes is a long time. A fire can start at any time and the sprinklers would destroy all the hardware I think. Maybe insurance could help.

Anyway feel free to carry on. I was just suggesting a feature you might consider adding for your customers. I certainly would not put my rigs anywhere without constant supervision by a person that lives at most 5 minutes away etc.

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[PulsedMedia]

Bad luck of the (electrical) draw.  If you had everything the same and operated in Wyoming with <6 cent electrical rates I might ship all my equipment to you and rent a cage.

Wow that is one mighty low electrical rate!

So your 1st year cost for 7970 with assumed 150W with overheads and GPU cost of 530$ is about: 608$! 467€ ... Wow. That is amazing!
My electricity cost alone is 170€ / 221$. And they say Finland is the promised country of Cloud ....

In your case you would however benefit from less hassle, but that's it.

A correction my electrical rate isn't 6 cents.  I was just saying I would colocate my mining hardware to your location if you could offer 6 cent electrical rates (plus some rent for cage space).

I would actually consider setting up something like this if it wasn't for the shipping costs, handling costs, maintenance needed etc.

Definitely need to have a dedicated person there 24/7 in case something goes wrong with so many miners and HW at your disposal etc.  

Do you have this OP ?  

Not sure of your question. Do you mean a person available to goto the location 24/7? Well the 2nd location is just 22km from where i live - So yes Takes 30mins for me to drive there, and i do hang around there for other reasons once or twice a week when i can.
It functions as our warehouse, plus i assemble stuff there etc.

No matter what, i will be placing my own rigs there. Only thing scares me is the temperatures in end of July, early August.

Average summer temperature is just ~18C for past few years (VERY HOT relatively), 1971-2000 average summer temp 15.9C, 30km south of the location.

That is exactly what I meant. If I was doing this sort of thing I would make sure to be there physically myself or leave someone there at all times to watch over the rigs. Even 30 minutes is a long time. A fire can start at any time and the sprinklers would destroy all the hardware I think. Maybe insurance could help.

Anyway feel free to carry on. I was just suggesting a feature you might consider adding for your customers. I certainly would not put my rigs anywhere without constant supervision by a person that lives at most 5 minutes away etc.

servers don't need that kind of observation - properly configured these do neither.
a 5k server room might go by months no one even visiting there!

If fire happens, i will most likely be able to shut down all nodes remotely, so when the sprinklers go off the hardware would be spared, just need to dry and test everything. Just in case i can't be there when the fire is starting up.

Seriously tho, computer hardware does not tend to catch up on fire spontaneously

and if this grows sufficiently, it's not that big of an investment relatively to setup electronics safe fire system (can't remember the name of the gas used).
If you got 40k € (ie. 100x7970) operating, 4k-8k € on a small fire supression system is not that bad of an investment anymore (10-20%) compared to a small 10x7970 operation.

[grue]

servers don't need that kind of observation - properly configured these do neither.
a 5k server room might go by months no one even visiting there!

If fire happens, i will most likely be able to shut down all nodes remotely, so when the sprinklers go off the hardware would be spared, just need to dry and test everything. Just in case i can't be there when the fire is starting up.

Seriously tho, computer hardware does not tend to catch up on fire spontaneously

and if this grows sufficiently, it's not that big of an investment relatively to setup electronics safe fire system (can't remember the name of the gas used).
If you got 40k € (ie. 100x7970) operating, 4k-8k € on a small fire supression system is not that bad of an investment anymore (10-20%) compared to a small 10x7970 operation.

You can shut off remotely, but can you respond fast enough so the equipment doesn't get wet while the power is still on? Keep in mind you need to cut off all power, because even if the rigs are "off", the power supply is still providing standby power to the motherboard. Or are you going to have it set up so all power is cut automatically in an event of a fire?

It's not just reacting to fire, you need to be close so you can monitor the site 24/7. It's a datacenter with over 50k worth of electronics, so burglary/vandalism is definitely an issue. A warehouse with tons of ventilation, spewing out hot exhaust is sure going to attract some attention.

Just because you live 30 minute away, doesn't mean you can deal with an emergency. Are you willing to leave work if a problem shows up? How about 3am in the morning, or right when you're eating dinner? Mining rigs are very risky investments, and bitcoin prices are very unstable, so it's all about getting the fastest ROI as possible. If it will take you 12 hours to respond to an event, your customers are not going to be happy.

A much better idea would be to sell mining contracts.

[PulsedMedia]

You can shut off remotely, but can you respond fast enough so the equipment doesn't get wet while the power is still on? Keep in mind you need to cut off all power, because even if the rigs are "off", the power supply is still providing standby power to the motherboard. Or are you going to have it set up so all power is cut automatically in an event of a fire?

It's not just reacting to fire, you need to be close so you can monitor the site 24/7. It's a datacenter with over 50k worth of electronics, so burglary/vandalism is definitely an issue. A warehouse with tons of ventilation, spewing out hot exhaust is sure going to attract some attention.

Just because you live 30 minute away, doesn't mean you can deal with an emergency. Are you willing to leave work if a problem shows up? How about 3am in the morning, or right when you're eating dinner? Mining rigs are very risky investments, and bitcoin prices are very unstable, so it's all about getting the fastest ROI as possible. If it will take you 12 hours to respond to an event, your customers are not going to be happy.

A much better idea would be to sell mining contracts.

1) Complete power cut off, ie. PDUs. Can be automatic with temperature sensors -> detect over 50C in any of the measure points -> something is seriously wrong.

2) Like i said, 24/7 video surveillance, tight lockdown. A non-issue.

3) 30mins is my normal from door to door travel time, i can make it in 20minutes in emergency. or less.
I'm a entrepreneur -> this WOULD BE my job, at least part of it. I can leave and come whenever i want, no problem at all. My responsibilities are 100% to customers.
3AM, 10AM, 5PM, whatever, nothing new. If sprinklers go off fire alarm is set off automatically, which goes remotely to fire station.

Actually, i'm quite curious how ridiculously tight requirements you are asking for bitcoin mining rigs, these are not mission critical financial servers, these are mining rigs. No one is going to die if they are down for a while, no one is going to go bankrupt, no one is going to have relatively high losses vs. time of downtime, no one is going to take PR damage (except me) for any downtime.

All of that asked can be provided, but price will then correlate:
That would be 7500€ per 7970 per year, thank you.
That will give you a fully HA setup, in 24/7 in location presence, with proper fire management, offsite backups, security guards on post 24/7. Minimum order is 50 units, minimum contract 3years.

Ask for enterprise level features -> get enterprise pricing.

Or is it sufficient for a bitcoin mining rig to have an annual 99.9% uptime (less than 9hrs downtime annually), where security for the budget far exceeds the expected norm, and any and all issues are replied & acted upon within the day, critical emergencies within an hour or two, at a sane cost.

99.9% of the dedicated server market does not offer what you are asking for.
Some providers run their DCs completely lights-out with hours to travel to location if need be. They still offer you 99.9% SLA, and many people use their services for something which would cost them with 1hr downtime more than annual revenue of 1Ghash/s of mining rigs.

Hell, i've seen (and used) DCs where ambient temp is 50C, with no fire suppression available, and anyone with knowledge it is there and intent could get into. Actually because one of the technicians forgot his keys, with 20minute effort we got through the door without any kind of keys. I admit, that place sucked MAJORLY.

BTW, worlds most successful server provider uses the quality level of DCs 90%+ "enterprise hosting" folks would laugh at. Yet their uptime levels at the very least is on par, usually exceeding this "enterprise" offers (disclosure: I have hundreds of servers there, which take less time to manage than just 10 servers at Leaseweb...)

oh and this warehouse, i already got there stuff worth tens of thousands of euros, if the place would be robbed or would burn down i would stand A LOT to loose.

[PulsedMedia]

That provider puts money where it matters and not making things fancy, or excessively fine tuned.
Not sure how they handle fire suppression tho.

My point is that there is a balance on things.
I plan to utilize at max 20kW or so at this location, before choosing another one.
That is around 80Ghash/s.
Yes, not a tiny cluster, but not extremely large neither.

The whole point is to make things as economical as possible, not as fancy as possible.
You can have fancy right now, just build your rig into 4U case and take it to a DC, anyone can do it right now. However that does cost 100-200€ per rig a month. If i recall right it's 1100€ a month for rack with 16A @ Evoswitch (NL). Whoops, your operational costs just rose exponentially for: UPS, Fire suppression, 24/7 present staff (150€ per hour remote hands), AC etc etc etc.
Yet you don't get monitoring with it, but you have to monitor it yourself and make requests to DC remote hands, billed in 15min increments. So you need to hire a local guy to do that for you, here in Finland that is 2k €+ a mo for minimum wage guy, but you don't want minimum wage guy doing THAT JOB, riiiiight?

Are you getting where i'm going with this?

There will be a point where all of what you mention WILL be economical, but that day is not Before Launch.

Why most people don't host their hardware in a DC? Because of the cost of all those supplements. For almost every miner out there, it makes absolutely no sense. For some it does, for most it does.

Only reason you are not demanding these from mining contract is perception. Same risks exist for anyone who is having any sizeable mining operation.

[PulsedMedia]

What kind of features you would hope to see from an operation like this?

I have few ideas to lower the pricing to a nicely low fees, yet make it profitable, by driving in some efficiencies of scale.

Payment methods would be Paypal € or BTC.
Also one thing to consider is providing other GPGPU or hashing applications. FPGAs probably cannot operate for anything else than Bitcoin, but GPUs could.

[PulsedMedia]

Updated the pricing, lots of Q&A etc. on the 2nd posting.

Feedback is appreciated.

[Gomeler]

In the end it is too expensive for most non-European users. Your very high power cost will require relatively high rates for this service for anyone outside of the EU. In the US by my calculations it costs me about $240 per HD 5830 for the card, the chassis to run it in(split across 5 cards) and then the power to run the card. I currently run out of my garage where I vent the waste heat(in winter months I had the cards in the basement to heat the house). I am looking at a small industrial warehouse with a pair of roof vent fans to run out of as my operation grows. This will drop my power costs as I'll be on an "industrial" plan instead of a residential plan so it further makes your operation cost ineffective to myself.

However! For Europeans who seem to have much higher power costs your service might be quite useful. The other case would be users who don't want to manage their farm as it grows. Unfortunately at this point though mining is mostly a hobby for some people and a serious investment for others. The first group enjoys running their farm, the second group saw this as a way to make money and would be turned off by losing possible profit.

[PulsedMedia]

In the end it is too expensive for most non-European users. Your very high power cost will require relatively high rates for this service for anyone outside of the EU. In the US by my calculations it costs me about $240 per HD 5830 for the card, the chassis to run it in(split across 5 cards) and then the power to run the card. I currently run out of my garage where I vent the waste heat(in winter months I had the cards in the basement to heat the house). I am looking at a small industrial warehouse with a pair of roof vent fans to run out of as my operation grows. This will drop my power costs as I'll be on an "industrial" plan instead of a residential plan so it further makes your operation cost ineffective to myself.

However! For Europeans who seem to have much higher power costs your service might be quite useful. The other case would be users who don't want to manage their farm as it grows. Unfortunately at this point though mining is mostly a hobby for some people and a serious investment for others. The first group enjoys running their farm, the second group saw this as a way to make money and would be turned off by losing possible profit.

From european individuals i have to charge 23% VAT
How much are you paying for electricity?

I was also thinking for serious miners a faster way to grow, as there is no serious upfront costs, just the operational.
For me the benefit would be from economies of scale and long term prospects.
That way you could get additional 6Ghash/s today instead of just 1Ghash/s for the same money paid today, as an example.

The 7970 1st year costs on this should be less than the GPU + Electricity cost even for most US based miners.

We shall see, a lot of this i have to setup in any case, and when it's all setup there might be interest all of sudden, and definitively would consider mainstreamers would be interested, those without know how or willingness to setup their own GPU farms, and those which just want to support Bitcoin and enjoy some profit at the go.

See if you pay 75€ setup + 43€ for the GPU to be brought online today for ~600Mhash/s, instead of paying ~450€ just to get the GPU, you can purchase full 2Ghash/s from me to have online TODAY. That equals the cost of SINGLE GPU. It leaves me to finance the remainder 3 GPUs + node + supportive/overhead hardware. Platinum cert PSUs are *NOT* cheap.

The difference is: 70$ or 280$ revenue on the first month.

First year 4xGPU Setup: 2060€ fees collected by me.
Cost of 4xGPU + PSU + Mobo + CPU + RAM @ Newegg is roughly: 1963€ excluding PCI-E risers, Fans, power cabling, electricity costs, space costs, CPU heatsink.
At 0.06$/kWh, if that system consumes 750W: 302€ for the year, combining for 2263€ costs for you (Plus what 100€ for the other HW, plus space?), meaning for 1st year you STILL get ahead.

[Gomeler]

I pay around 0.11 USD/kwh after all the taxes and fees and such..

So if I understand, the numbers you give in the first post "7970: 515.4€" for 1 year paid in 6 month segments. At 0.18 USD/kwh it looks like it'll take you roughly 2 years to pay off the cards. Not bad I suppose if you already have the infrastructure and are able to keep those cards occupied by clients 100% of the time. When not rented by clients I suppose they could mine for your own account and you'll just have to hope that the price per bitcoin climbs out of this 5 USD/BTC plateau we seem to be at.

Will be interesting to see how your service turns out. I don't think I'll take advantage of it at this point as I think I have a way to get power at 0.07 to 0.08 USD/kwh which will make HD 5830s incredibly viable for myself.

[PulsedMedia]

I pay around 0.11 USD/kwh after all the taxes and fees and such..

So if I understand, the numbers you give in the first post "7970: 515.4€" for 1 year paid in 6 month segments. At 0.18 USD/kwh it looks like it'll take you roughly 2 years to pay off the cards. Not bad I suppose if you already have the infrastructure and are able to keep those cards occupied by clients 100% of the time. When not rented by clients I suppose they could mine for your own account and you'll just have to hope that the price per bitcoin climbs out of this 5 USD/BTC plateau we seem to be at.

Will be interesting to see how your service turns out. I don't think I'll take advantage of it at this point as I think I have a way to get power at 0.07 to 0.08 USD/kwh which will make HD 5830s incredibly viable for myself.

+75€ if you want to pay monthly.

Exactly, i will keep them mining if there is no takers, so opportunity cost is very low.

I also get the 7970s substantially cheaper than say NewEgg listing price, that helps too

515.4€ = 670.02$ so it's barely above the GPU price for the 1st year. I fail to see how that is NOT a good deal for someone short in capital?

[Shadow383]

I'd totally lease some BFL singles for you for a couple of months to try, but not wanting to take the risk on setup costs and a longer term contract for a new player in the market I'd be wary just now.
I don't like paying annually or semi-annually for hardware leasing anyway - lease my seedboxes and VPS on a month-by-month basis.

Essentially though, what you're offering is mining contracts. Why not just offer in terms of raw Mh/s rather than based on what sort of hardware it is?

Regardless, if you can sort out the issues, I'll be a customer - paying $0.33/KWH equivalent here 

[PulsedMedia]

I'd totally lease some BFL singles for you for a couple of months to try, but not wanting to take the risk on setup costs and a longer term contract for a new player in the market I'd be wary just now.
I don't like paying annually or semi-annually for hardware leasing anyway - lease my seedboxes and VPS on a month-by-month basis.

Essentially though, what you're offering is mining contracts. Why not just offer in terms of raw Mh/s rather than based on what sort of hardware it is?

Regardless, if you can sort out the issues, I'll be a customer - paying $0.33/KWH equivalent here 

It's easier to sort with just devices, but yeah, it could be marketed as such.
Those terms are created so that we can still reap the important reward -> upfront ROI on the HW.
Dropping setup fees would mean that we are essentially donating money
In any case, 75€ is not much!

That is some BAD electrical rate :O

[PulsedMedia]

Updated Mhash/€ rates to the table. 7970 is based on quite low Mhash rating, testing will show what will be attained in practice per GPU.

[PulsedMedia]

This is a very probable GO now, targeting first customers up & running by end of april.

Hardware en route or available already for sale:
 - BFL Single * 2  (Should arrive around end of april)
 - 7970 * 2
 - 5830 * 3
 - 5850 * 2
 - 5870 * 2
 - 6950 * 2
 - 6970 * 1
 - 6770 * 1

Preorders for hardware is very limited, usually 1 every 2 or 3 sold & delivered, unless we have already put a significant order in place.
BFL Singles will have longer lead time, and more preorders are accepted for them because it's important to get early on the queue.

New hardware will be ordered once a month, usually around end of month, so stock status will be updated at beginning of month.

Brand name is 90% likely chosen now with domains registered, but still considering alternatives.
Payments will be accepted in: SEPA Wiretransfers, Bitcoin, Paypal  and maybe others (Suggest!)

SLA & service specification will *probably* be changed so that we can shutdown the hardware on the few days in summer when temperature rise too high for evap cooling to be effective enough - these periods of downtime would be automatically be credited at least 100% if not at higher ratio. This will likely be limited to several hours a day (6max) for a total of ~10 days a year when temperatures creep well above 30C. Only time will show us will ambient stay low enough. Target GPU temperatures are 70C, and shutdown will happen on 80C.

Mhash based leasing is currently out of question due to the technical difficulties in operating such.

Services are VAT deductible upon request by submitting VAT ID. People outside Europe are not subject to VAT.

[PulsedMedia]

Already taking preorders. If you want to be ensured your spot and price now you can e-mail sales@pulsedmedia.com

[discordian666]

I'm new but i can vouch for Pulsedmedia's company when it comes to seedbox hosting. Pure professionalism, they care about their customers and their support and service is top notch in my books!

Good luck with your new venture, I hope this will take off

[bitpop]

I'm in

[PulsedMedia]

I'm in

Just e-mail us with what item you want, and we'll sort it out for you.

Domain for this has been registered, and site will be put together probably during next week.

Now question is:
 * Do you prefer weekly e-mail of graphs vs. a live site?
 * Do you prefer to be able to set pools at anytime, or is support e-mail sufficient for starting?

I'm leaning towards coding a management interface, where you get live graphs, and can setup pools etc. That takes a bit of effort tho. (Especially since i have to code custom tailored CMS from scratch!)

[bitpop]

Both emailed is fine. I'm still not clear on the pricing though. Could you polish that and add usd?