Common pitfalls of Cryptocurrency mining

We have had a great response from our first article encouraging prospective cryptocurrency miners to host their mining rigs in our data centre. This has provoked a further article as we have found that some key factors about mining for cryptocurrency need to be taken into consideration before taking the plunge.

cryptocurrency

One of those factors is the vast amounts of power that are involved in running these mining rigs (not to mention the cooling that goes along with it).  The other things to consider are: Where to put the machines and which currency do you choose to mine for? (Click here for a list of current cryptocurrencies  )

The main advice we are giving our customers is that before jumping on the Klondike wagon i.e. rushing out and spending thousands of pounds on a mining rig, they cost a couple of £k each, do some research particularly around the cost of power in the UK.

Here are 3 things to take into consideration but of course there are many others.

  • Power consumption – cost of electricity

The hardware associated with cryptocurrency mining (ASIC boxes, which are cryptocurrency specific) are generally imported from China, are not prohibitively expensive and don’t take up much room so you might be able to fit 5 of them into 4U of rack space.  4U of rack space in a data centre would only cost you, say £250 per month at the most.  That’s a small price to pay, right ? But the devil is in the detail and what will make a dent in your potential cryptocurrency earnings is the power consumption associated with each of those mining rigs. At something like 16p a kW hour (including cooling) a typical 1.2kW rig will cost about £100 a month to keep mining 24×7 so those same 5 miners will cost some £500 month. There are many advantages in hosting your rig in Datanet’s high power data centre, but there is an alternative, you could do what one of our potential customers has decided and that is to host his rigs in Iceland where there will be less of an issue with cooling the machines and there is an abundance of cheap hydro-electric power..

  • Race against the clock

The mining rig that you buy today has a shelf life: what with the hash algorithms increasing in number and becoming increasingly complicated, mining rigs need to constantly keep up with this – no one can speculate when a mining rig will become obsolete so you need to make it work for you in the limited time that you have.

  • Where do you locate your mining rig?

There is nothing to stop you from setting up a crypto currency mining rig in your house or garage. This may be fine over the winter when there are no issues with the equipment overheating, but come the summer months you may find that you will need to install cooling to help cool the machines. The implications being that this could cause a vast increase in your electricity bill. Not to mention the noise that these machines will generate and the space that they will take up.  It could be worth considering hosting your mining rig in a data centre where you will have a fixed monthly fee for electricity, not have to worry about the noise or space and benefit from the resilient power, cooling and connectivity that a data centre will offer you (making sure that the mining rig is working 24//7)

Take a look at this useful Crypto mining calculator tool which will help you to work out the yield for each cryptocurrency:   and here for the Datanet Bandwidth Calculator:

Datanet’s London edge data centre provides the highest levels of resilience and plenty of power, cooling, connectivity and security.

If you would like to talk to Datanet about hosting your cryptocurrency mining rig then call 01252 810010 to speak to Jeremy today.

 

Call our team today on 01252 810010 to find out more about how we can help you