MY SAZMINING EXPERIENCE:
A CAUTIONARY TALE OF MINING EXPECTATIONS
About one year ago, I decided to try mining. After assessing the various options, from solo mining to cloud mining, I selected nostr:nprofile1qy2hwumn8ghj7un9d3shjtnyv9kh2uewd9hj7qpq0vkwadgkfkg9vzpe04a6rhpzrd8rlw0r84qelag5hgtycrykgz3qyzqfdf since I liked the interest alignment between the company and its customers.
If you're not familiar with Sazmining (https://www.sazmining.com), it's a company that offers hosted mining services. Here's how it works:
1. You purchase a mining rig from Sazmining, which gets shipped and deployed at one of their farms (located in Paraguay or Norway).
2. You pay a monthly hosting fee that covers energy and basic maintenance costs.
3. The hashrate of your rig is directed to the Luxor mining pool.
4. You earn sats, with Sazmining taking a 15% fee on your earnings.
In this scheme, Sazmining has all the incentives to keep your rig running constantly and efficiently.
Sazmining claims that mining with them will allow you to acquire Bitcoin at a much lower price than the market price. As of today, they claim on their homepage that you can get 1 BTC for $58K, which would be almost a 50% discount.
However, my personal experience tells a different story. I'd like to share my numbers with you. I purchased a Bitmain S21 for $5K and had it shipped to the Paraguay farm where the energy costs (0.047$/KWh) are covered by the hosting subscription ($120/month). Note that your monthly fee may vary slightly due to factors like local energy curtailments or overconsumption by your rig.
When I purchased my mining rig from Sazmining, they estimated that I could reach break-even within 15 months (by May 2025). At that time, their website featured a useful simulator that allowed me to experiment with different scenarios and estimate my potential returns. Unfortunately, this simulator is no longer available.
However, I've had to revise that forecast significantly. Today, my optimistic estimate suggests that it will take around 27 months (until July 2026) for me to reach break-even. Notably, this change isn't of course due to any decrease in Bitcoin's price.
So far, I’ve earned 3.4M sats, but the pace of payouts to my wallet is getting slower: from 340K every 3 weeks at the start, to 340K every 6 weeks now. Quite likely this is due to the significant increase in the global hashrate.
Combining both upfront hardware expenses ($5K) along accumulated hosting fees ($1300), I’ve paid a 110K USD/BTC price for my 3.4M sats!
After one year I’m still pretty far from enjoying the advertised discount and, of course, if I had opted for DCA purchases, I would have enjoyed much better results.
Hopefully, my return on investment will improve in the coming months, but there are no certainties, since global hashpower keeps growing.
I have the feeling that any other strategy (e.g. DCA) would have performed much better over the past year.
