I love the idea of mining! I’m struggling the make the math work though.
Spend $23k to buy 3 S19 XP machines, install electrical, and install infrastructure (not factoring in solar and building). Say it’s $0.02 kWh because of solar. After three years, I end up with 0.64 BTC
I could take that $23k and buy 0.77 BTC right now.
Buy equipment, work on the miners for three years, and end up with less BTC. What am I missing?
Non-kyc premium
And also possible heat savings.
But ya probably youll end up with less bitcoin than just buying.
There are two major ways to view an investment of this type. First, as you've done, as a capital investment with a certain expected return on investment. Second, the buying power of the Bitcoin your system would mine increasing about 170% per year on average in US dollar terms.
But mind you, your business wouldn't practically be Bitcoin mining, but electricity production and then selling that electricity in the way that makes the most economic sense. The real question is, how efficient is your capital expenditure in producing kilowatts per hour? At that point, once your solar system is up and going, you can sell your electricity to whoever will pay the best price for it.
You are effectively saying you want to sell your electricity to the Bitcoin network for the sats they will pay you for it, and that option may work for you. However, that isn't your only option. My wife and I sell the electricity from our solar system to whoever will pay us the best rate for it, all things being equal. For us this means mining whatever crapcoin is most profitable, and then getting paid in Bitcoin. All that to say, your real business is electricity production and sales using solar, if that's the best way for you to produce it. I hope this makes sense.
That’s a good way to look at it. I was trying to view it through that lens, but is was foggy. You’ve cleared it up for me. I can sell solar back to the grid for around $0.04 kWh. The Bitcoin network can pay me more for that power. And over time it can pay off the capital investment…hopefully. 🙃
I'm glad to be of service, and thank you for your zap. Reframing our mining business as selling electricity has been very beneficial for our business perspective and how I feel about it.
How did you calculate the 0.64 BTC?
Is your revenue after 3 years 0 on BTC mining?
Can you use the infrastructure or electrical for the purpose of the cabinet after 3 years? This could reduce the initial costs. Maybe postpone the full cabinet building and invest in btc but this would be very risky.
