Self-Mining Vs. Bitcoin Mining Hosting Service
It's tempting to join the frenzy.
But is setting up a mining rig in your basement still viable in 2023?
While self-mining may seem appealing initially, it won't be profitable long-term as competition rises.
In this article, we'll compare self-mining vs Bitcoin mining hosting services.
And explore smarter approaches to enter Bitcoin mining and make the most of your investment.
Read on to determine if self-mining is right for you.
Self Bitcoin Mining Explained
Solo mining is the mostly used term to describe self-mining. In solo mining, ASIC miners are the most fondly used miners, although a miner may use other miner types. Initially, you could use your PC to mine. However, due to the computational power needed, miners had to shift to specialized mining equipment like ASICs and Antminer S19.
The mining equipment and power are the most critical investments. Once you have a reliable power source, you’re almost set to start mining. Mostly, the return on investment depends on the price of BTC at the given time. At the moment, miners receive a reward of 6.25 BTC per block, although the reward changes after every halving cycle is due.
High Power Rates
Energy is the most critical resource in crypto mining. According to one of the latest solo Bitcoin mining analysis reports, a solo miner requires an average of 266,000 kWh of electricity to mine 1 BTC. Even so, it would take about seven years to complete the process, which means the miner would need about 143 kWh of electricity per month.
Still, electricity prices have been at an all-time high, according to the International Energy Agency. In Europe, the average electricity prices in 2023 are more than double their levels in 2019. The costs were expected to fall slightly in 2023 before accelerating further in 2024. With such high power demands and the rising cost of electricity, solo miners will only face it rough in the future. They may struggle with high power demands and growing power bills.
The increased complexity of Bitcoin mining means more demands in terms of resources and infrastructure. Today, it’s more than just your PC and reliable internet connection. Miners need more than just a few miners to achieve a hashing power that can compete favorably in the network.
For these miners to work efficiently, they need reliable power and an internet connection. Most solo miners lack the resources to build alternative and cheaper energy infrastructure to power their miners. In most cases, they rely on the grid, which is already strained. Additionally, they must build racks for their miners from scratch and install all the necessary amenities.
Dealing with Noise and Heat
According to a report published by the Wall Street Journal in 2021, Bitcoin mining noise was a nuisance driving neighbors insane in Quebec, Canada. The report described the noise as a giant dentist’s drill that doesn’t stop. Ideally, Bitcoin mining uses powerful GPUs or ASIC miners, which are not environmentally friendly. With their high power consumption, the mining rigs dissipate alot of heat and require potent fans to cool them. Due to the extreme heat, the fans must run at top speed to cool the miners down, thus emitting noise from their fast spinning, and the noise can go up to 95 decibels.
This significant challenge for self-miners can force them to close operations. First, they have to install fans, which adds to the initial cost of the mining setup and the monthly power bills. Additionally, you must find solutions for the noise to avoid being a nuisance in the neighborhood.
Mining equipment runs in extreme conditions. As such, they are prone to breakdown from the heat, dust, and the fact that they must operate 100% of their lifetime. Miners want to optimize every minute due to the stiff competition within the network to increase their chances of cracking the hash first. Therefore, considering that most solo miners are not mining equipment technicians, they must meet the cost of equipment breakdown whenever it happens.
Operating your mining hardware is not a DIY affair that everyone can handle. The most efficient output requires a good grasp of software and hardware configuration procedures and electrical engineering. Besides setting up the miners, you must actively monitor and resolve any issues to ensure they remain operational. Without the expertise, hiring professionals means a new challenge for self-miners or an additional cost. Ultimately, what started as a hobby could become your day-to-day job if you have to look out for your miners alone.
With all these factors into account, solo mining leaves one with quite slim chances of profiting from Bitcoin mining. Besides, self-mining could have been profitable if the price of BTC remained closer to its all-time high of $60,000. Even so, mining will become more difficult as the block rewards diminish. After the Bitcoin halving event, it will only get even more challenging in 2024. The current block reward of 6.25 BTC will be slashed to 3.125 BTC. The profitability of mining activities will diminish significantly, even as mining difficulty increases after the halving.
Bitcoin Mining Hosting Services
Bitcoin mining hosting service, also called collocation mining service, involves having a third-party company hold and manage all mining processes on behalf of miners. The hosting company shoulders all the hassles associated with crypto mining. They provide all the necessary amenities for Bitcoin mining, including:
- Cooling systems
- Handle all operational issues for a fee.
To put it into perspective, here is how a Bitcoin mining hosting service differs from self-mining.
Competitive Power Prices
Bitcoin mining hosting companies know that power is the most crucial factor in crypto mining. They also understand the vast power demands of crypto mining. As a result, most of them are keen to provide clients with the most competitive power prices. Ideally, by shouldering the power demands of multiple miners, hosting services can bargain better energy prices from power providers.
Additionally, crypto hosting services like EZ Blockchain exploit alternative and cheap energy sources like wasted energy. EZ Blockchain uses renewable sources of wind, solar, gas, and nuclear. Thus, they can provide more affordable power rates of between $0.067-$0.08 per kilowatt-hour.
With these energy rates and considering that about 266,000 kWh of electricity is required to mine 1 BTC, EZ Blockchain provides an affordable option compared to energy costs in most countries. At EZ Blockchain, the cost of mining 1 BTC would be $18,620, which is significantly lower compared to the cost of solo mining in the USA ($46,300).
Most mining hosting providers are exclusively in the business of providing collocation mining services and overseeing all crypto-mining activities. Consequently, they have an experienced team dedicated to ensuring miners run efficiently. For instance, EZ Blockchain has a dedicated maintenance and support team with on-site technical staff and a group of engineers. They have the expertise to work with Tier 3 and Tier 4 server protocols. They pride themselves on 6+ years of experience providing crypto mining hosting services.
Cooling Infrastructure Ready
With a hosting facility, miners do not have to invest extra money in cooling infrastructure. The collocation mining service has all the necessary infrastructure in place. Your work as the client is to deliver your miners to the facility. For companies like EZ Blockchain, clients enjoy perks such as choosing between air and immersion cooling systems. The company developed its own immersion cooling systems with sensors to maintain consistent temperatures.
With these innovative cooling systems, you are guaranteed that your miners are running efficiently, and their lifespan is also guaranteed.
Takes Care of All Operational Burdens
The crypto mining hosting solution will handle everything related to mining, from the security of your equipment, maintenance, repairs, and cleaning to ensuring the maximum possible uptime. EZ Blockchain has a friendly technical support team on site that supports the operation of your miners 365 days a year.
No Heat and Noise
With technology such as immersion cooling, you can rest assured there is no heat to damage your equipment or noisy fans to make your mining a nuisance. Additionally, professional hosting companies like EZ Blockchain deploy their mobile data centers in oil fields to utilize cheap alternative energy and away from neighborhoods that can be affected by your mining activities.
Make 50% More By Working with a bitcoin mining hosting company
EZ Blockchain is an innovative mining hosting company in the business since 2017. It’s one of the best mining hosting service companies with a guaranteed miner-up time of 95%. With EZ Blockchain, you can make up to 50% more from Bitcoin mining because of their methodology that ensures efficient crypto mining.
- The company uses a highly specialized grid balancing methodology with software that tracks when energy is unused and turns on/off the mining process.
- Our software monitors
- The energy prices
- Energy demand
- The condition of your miners to ensure you always get positive returns on investment.
- Additionally, the company has an experienced team with 6+ years in the Bitcoin mining business. The company uses wasted and underutilized energy and renewable sources of wind, solar, gas, and nuclear power.
Frequently Asked Questions (FAQs)
Why are Power Rates at EZ Blockchain Low?
EZ Blockchain power rates are low because the company exploits wasted and underutilized energy sources. The company goes to stranded areas with stranded energy and meets them with enormous energy demands.
What Type of Mining Rigs Can I Host at EZ Blockchain?
EZ Blockchain hosts almost all kinds of miners used in Bitcoin mining. The company follows a flexible design solution that can accommodate different types, shapes, and sizes.
What Type of Cooling is Provided by EZ Blockchain?
EZ Blockchain provides air and immersion cooling systems to clients. You can choose the type of cooling you want, although the cost of the immersion cooling plan is slightly higher.
Can EZ BlockchainRepair My Miners?
Yes. EZ Blockchain undertakes all client maintenance functions, including troubleshooting, maintenance, and repairs for all ASIC miners.