Colocation in Crypto Mining: A Smart Move

With the online presence of a huge active community surrounding crypto, online mining pools were also created, allowing solo miners to join forces and share the rewards. But to really scale a solo or small/mid-size operation further, a third-party hosting is the ultimate solution. 

Some of today’s hosting providers make a step further and expand their hosting facilities into colocations, potentially enabling higher collective efficiency at lower costs for ASIC owners. But what is a crypto mining colocation? Which ins and outs are there, and do you need it?

Let’s figure it out.

What Is Colocation?

Turning to colocation services is when you actually place your mining hardware (an ASIC) in a third-party facility. This way, instead of running a rig at home (and limiting your scaling opportunities) or in a private warehouse (and covering high rental expenses), you can use the facility built and pre-optimized for high-density mining operations. 

“When you move your ASIC rig into a crypto mining colocation facility, you get to immediately leverage the infrastructure that’s normally reserved for large institutions.”

This goes for any ASIC and any crypto. For example, with colocation Bitcoin mining, you retain full ownership of your ASIC(s), but the hosting provider maintains their tech state, helps stabilize performance, and supplies the infrastructure.

A good colocation facility has a range of pre-installed utilities and hashrate-maximizing solutions, providing:

• A rack or cabinet space for the firm, optimal, best-cooled installation of ASICs;
• Industrial-grade cooling systems, ranging from powerful HVACs to integrated boxed setups;
• High-capacity power feeds with reinforced circuit protection (and immediate maintenance in case of tech issues or shutdowns);
• Redundant UPS or generator systems for resistant operation during power failures, prolonged equipment life, and downtime-free performance;
• Stable high-speed internet connection kept at peak speeds 24/7;
• Expert monitoring of rigs, including temperature checks, performance audits, and tracking of critical readings and metrics.

How it works

Going for the colocation for Bitcoin mining may be the safest, most starter- and budget-friendly way to start earning off crypto. It is also very accessible and service-oriented. So how does the colocation happen exactly? Let’s take a look:

1. First, you need to ship your machine(s) to a facility offering Bitcoin hardware colocation services;
2. The provider then mounts your unit in the pre-optimized racks, connects them to low-cost power, and integrates efficient cooling, ventilation, and protection;
3. From here on out, the colocation provider handles on-site maintenance and remote monitoring, keeping you personally in tune via custom dashboards and suggesting improvements. 

That’s it. You now have a safe, dedicated place to run a crypto mining rig, with the premises designed to squeeze out its maximum hashrate potential at stable rates. More than that, however, this is a great opportunity to scale your operation while minimizing expenses.

Instant scaling via colocation

The trend for shifting to Bitcoin ASIC colocation is growing because it allows miners to focus purely on hash rate and profitability rather than facility design, cooling planning, power engineering, and space logistics. Compared to‍ DIY setups, it delivers scalability, optimized cost-per-kWh, and professional uptime — all major advantages for your competitive edge. 

Furthermore, when miners choose Bitcoin mining colocation in Canada or other favorable jurisdictions, they can benefit from lower energy prices, friendly regulations, and cooler climates (which means less hardware stress). And there’s more where all that comes from — hosting colocations bring more major benefits to the table. 

Benefits

Hostings that allow you to colocate ASICs are not only a helping hand for those crypto enthusiasts short on the upgrade budget. They pack a number of undisputable advantages for miners of any scale or ambition. 

Benefits for miners

When you move your ASIC rig into a crypto mining colocation facility, you get to immediately leverage the infrastructure that’s normally reserved for large institutions. This means reliable power with all the necessary backups, rapid connectivity, professional monitoring at all times, and multiple new ways to scale. 

For individual and solo miners or smaller farms, choosing colocation is a way to avoid many of the headaches of self-hosting. You can invest less time in the long run, while getting stable high performance (probably unachievable solo), balancing out eventual ROI and costs. In terms of scaling, this enables you to start competing at a higher level.

Energy savings and cost efficiency

Electricity is, without a doubt, the largest single cost in cryptocurrency mining. Here, colocation providers help cut some pressing expenses through individual service. For one thing, using Bitcoin miner colocation services gives you access to low-cost power jurisdictions (the hosting facilities being set-up in more crypto-favorable regions). 

This already allows you to achieve meaningful cost margins and savings per kWh. But you can also negotiate bulk payments for energy to save more. By paying more overhead, you will be able to save on power rates over time. 

Security advantages

Your mining rigs are expensive assets at the core of the entire crypto mining venture. And a colocation setup will provide more physical and cyber security that regular home or even warehouse setups just can’t match. 

These usually include:

• Constant ASIC surveillance and proactive maintenance;
• Biometric access to the machines and secure data centers;
• Remote monitoring of metrics and critical readings;
• Fire suppression, USP energy balancing, and instant issue response;
• Redundant power and internet links with reinforced connectivity protection.

These and other protections and measures made available by different hosting providers allow solo operations and ASICs ready to scale an opportunity to do so with the help of a single contract. 

Maintenance and support

The overarching benefit of colocations, and miner hostings in general, is that any technical support measures or maintenance tasks are all handled by the provider. A good colocation center for boosted, scalable mining will provide:

• Hands-on technical support;
• Hardware replacement;
• Monitoring alerts (if your machines stop hashing);
• Remote access to your rig’s performance metrics.

This personalized level of Bitcoin colocation mining service means ultimately less downtime in your miner’s performance, as well as fewer surprises and issues on the technical end, and more consistent revenue due to maintained operation and boosted service life. . 

Choosing a Provider

Working with a colocation facility is simple and adjusted just for you. The only critical decision you will have to make is which Bitcoin colocation provider to choose exactly. 

Here are a couple of pro tips and directions to help you pick the top available hosting company.

Choosing the right colocation provider

First things first, summarize what you need. Collect the key criteria for selecting a provider and put it down in a checklist. In your hosting candidate checklist, make sure to include the following: 

• Service and power cost per kWh (how much will it cost to host your ASIC?)
• Uptime and redundancy (is there 24/7 monitoring and security backups?)
• Cooling infrastructure (are there advanced systems suitable for ASICs?)
• Transparency (what are the detailed fees, contract terms, and location conditions?) 

Before anything else, the provider must fit your budget and provide extra saving opportunities. Ideally, your colocation of choice will be situated in a low‐cost power region or renewable-friendly site. E.g., some North American hosts advertise rates from ~$0.06–$0.09 USD per kWh for hosting rigs. 

Colocation vs home mining

This is the ultimate choice for most solo miners — hosting your ASICs at home or in a personal facility gives you full ownership and visibility. But you also must deal with visibly higher electricity, noise, cooling, space, and manpower costs. 

Bitcoin ASIC colocation shifts these burdens to the facility so you can focus on mining only. The colocation also allows for quick scale-up, better cooling, guaranteed reliability and is often more cost-efficient, especially for medium-to-large setups.

The final choice is your to make, but keep in mind:

Remote monitoring tools

Today’s colocation facilities provide dashboards and remote access so you can monitor your rigs’ hash rate, uptime, temperature, and performance ratings from anywhere. These tools let you track your machines in a Bitcoin ASIC colocation environment just as you would a home rig, but with professional infrastructure behind you. 

Such remote tools help you make sure to not stay blind when your hardware is deployed off-site, keeping every little thing in tune. So for those mining enthusiasts confident in what they are doing, a much higher degree of control and ownership can still be retained. 

Is Colocation Right for You?

The two big questions that you need to figure out are: Can I get cheaper power elsewhere? Do I want to manage cooling, noise, security, and maintenance myself? If not, hardware colocation might be the smarter path.

Bitcoin colocation offers a way to turn your mining hardware into a plug-and-mine asset: you own the machines, but someone else manages the facility. For solo hobbyists with few machines and cheap power at home, self-hosting may still make sense

But there are all those benefits described above that you can leverage. So if your goal is to scale, minimize costs, avoid facility management burden, and boost stability of the operation, then Bitcoin colocation is definitely your move of choice. 

Need help launching or scaling? Get consulted by seasoned experts at EZ Blockchain — contact us to make the best next move, purchase an ASIC, and host it cost-efficiently in a favorable region!