Can You Still Make Some Money from Your Old ASIC Miner?

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Fan grill representing miner, and dollar bills falling next to it

If you’re a crypto miner, you know key to success is timing.

Those who started mining before the 2017 bull run were laughing all the way to the bank. With a couple of smart moves, they could recoup their investment in equipment, keep their miners, and put some coins aside.

It’s a very different story for those who joined in the midst of the hype (November 2017 – February 2018). They paid a premium for their miners and never made a profit once crypto prices dropped.

Timing is everything

The situation remained bleak throughout 2018. As crypto prices fell and electricity costs rose, miners had a few choices:

  • Keep-hodl-hope: Keep mining, cover the minus yourself, hodl the mined coins, and hope for the market to improve.
  • Stop-hodl-wait: Stop mining, but keep your coins and equipment, and wait for a new opportunity.
  • Sell-sell-sell: Sell your equipment and coins, and absorb the loss.

Most miners went for the third option, which flipped the market on its head. Expensive mining equipment depreciated rapidly in value, and soon the market was flooded with high-end used hardware going for a bargain.

During the mining hype, because of the insane rise of mining hardware (graphics cards, PSUs, RAM modules and SSDs), gamers suffered the most. Prices went sky-high, and a growing demand made some equipment near impossible to buy.

ASIC miners are the real issue

The sell-off was a huge blow for those who had bought purpose-built mining rigs, especially ASIC miners. Unlike graphics cards or RAM modules, ASIC rigs have no use other than mining. With new models coming out and the bear market persisting, these old ASICs plummeted in value.

Let’s examine one of the most popular ASIC miners: Bitmain’s Antminer S9 14 TH/s. This very specific piece of equipment was selling for roughly $2500 at the peak of the bull market.

Bitcoin price graph
Bitcoin price graph August 2017 – February 2019. Source: CoinMarketCap

Today, Bitcoin miners who use Antminers lose money daily. The most optimistic profitability calculator forecasts an annual loss of around $350. That’s based on the current price and difficulty, neither of which have changed significantly over the past couple of months. The cost of electricity is also a factor that varies from place to place, but most calculators use the typical US price of $0.13 for 1 Kwh. More pessimistic forecasts predict a loss of around $815 per year. Either way, it’s not looking good.

As we mentioned, many miners bought their Antminer S9s for $2500. Now, the same rigs are selling for around $300

Is there some light at the end of the tunnel?

Suppose, that an entity such as a hydroelectric plant that has surplus electric production, or a rate that is subpar could offer their excess energy and convert it to bitcoins. Suppose, that most hydro and renewable energy sources have vacant land and could quickly retrofit that land for storing and running your bitcoin miners.

So, we at Coined Times came up with an idea. Instead of leaving your miner offline, you put it to good use by “loaning” it to a mining farm. The farm covers the costs of electricity, which is currently the biggest problem for miners. You and the farm split your rig’s crypto earnings 50-50.

All you have to do is to ship the miner to the farm and let them do the rest. After a year, the farm keeps your ASIC miner, you get half of the coins your rig has mined, and you don’t pay a cent for electricity.

Antminer S9 14Th one year profitability chart
Example: Antminer S9 14Th one year profitability (BTC price and difficulty from February 12, 2019)

A new way of thinking about mining farms

Here’s how a project like this would work:

  • The mining farm sets up its rigs somewhere in the US with cheap electricity. There are power distributors who’ll sell excess electricity off to big projects like this for a fraction of the price most consumers pay. By mining with thousands of rigs in the same place, the farm can maximize efficiency.
  • You and the mining farm sign a contract confirming that you’ll reap 50% of the profits of the year’s mining. The farm will pay for all the electricity.
  • Once both parties have signed the contract, you send your ASIC rig to the farm via the post.
  • As an example, if your rig would mine about 0.3 BTC in the year, that’s currently worth around $1090, you would get around $545 worth of BTC.
  • When the 12-month period is over, the mining farm keeps your old ASIC rig and you get your money.

By that math, you’d make about $250-$300 more than you would by simply selling your obsolete ASIC rig now. You would also get some more use out of your soon-to-be-obsolete product with less risk on your part.

Of course, like any miner, you’re betting on the price of BTC holding its current level or increasing in value. Nobody can predict whether that will actually happen. But keep in mind that with the block-reward halving approaching in just over a year’s time, this could be your last chance to get some decent value out of mining BTC.

No crypto company has announced solid plans to do something like this yet. But with ASIC miners plummeting in value and mining difficulty increasing, a solution like this could be advantageous for everyone.

Instead of leaving your mining rigs to collect dust, would you be interested in a project that could help struggling miners?

Tell us in the survey below.

 

 

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