Bitcoin Miner Earning $8 Million a Month

Well, if you have a business plan and enough venture capital, anything can happen. Of course, the guy featured in the story was also probably in on Bitcoin early in order to be considered for KnC's first batch rights and whatnot.

Had I been into BTC mining earlier, I can almost see myself probably doing something similar. That's taking your hobby to an extreme... very [H].
 
What isn't stated is more than half of that power is very recent additions of which it'll be 6mnths+ for ROI on this expansion
 
heh.

This guy is my son's girlfriend's (well, former girlfriend) Dad.

Nice guy. And the hardware contracts are where he's making his money at the moment. That's not his farm mining his bitcoins, its hardware he has built for others to mine their bitcoins from what I understand.

BB
 
Actually, it sounds much more like he bought the hardware, set up and maintains the farm, and is renting out the hash power to clients (at a premium) to mine for them. Another very lucrative business to be in right about now.
 
Why would anyone want to even announce this publicly? Unless they're an attention whore.
 
It is probably like running almost any other kind of datacenter, maybe they had that previous experience?

Must have some serious capital, I wonder what bank went along with that proposal.
 
vibe said:
It is probably like running almost any other kind of datacenter, maybe they had that previous experience?

Must have some serious capital, I wonder what bank went along with that proposal.
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Not necessarily a bank. In fact I don't even think a bank would seriously consider this. It would be too much risk for them because the crypto market and Bitcoin specifically is so speculative and unstable. Besides that, most banks dislike crypto... they're one of those institutions that do not consider crypto a real currency, so why pump money into a business that's merely investing in a fake market?

However, as of the BTC boom last year, there have been a lot of Bitcoin venture capitalists created. Most of them know the value of Bitcoin, they trust it will be there for the future at least, and are willing to take the risk to invest millions into businesses just like these.
 
Okay, if he's actually cashing out and/or reselling compute power he's sitting pretty.

Washington's going rate for power is about 7 cents per kwh.
So his power bill is probably somewhere in the neighborhood of $70K-80K a month.
Going rate for 1st floor warehouse space in Washington is around $7-8 a square foot.
Say, 100,000 Square feet? $700K-800K/month.
Then there's the sunk cost of the rigs. $13K a pop-ish for a Neptune rig (not sure what he's running). A thousand of them runs roughly $13 mil. If he's pulling 1.4MW, he's probably running somewhere in the neighborhood of 5000-7000 unit. So $65-91 mil

Okay, just for the crazy's sake, let's take the upper end of everything:
Even if he had bought all of it brand new and turned it on just now.

880K/month for facility and power. Call it a cool million.
That means, after facility and power he's pulling in 7 mil a month. 84 mil a year.

Now, it's possible he's not running Neptune units, got a bulk discount, my math is off on power consumption or total units needed.

Basically he's in the hole for the first 13 months. After that, it's $7 mil in profit a month for every month after that.

Basically he had to be someone who was already well-to-do to begin with.

John Q. BasementBitcoiner isn't going to be able to duplicate something like this.
 
Chas said:
Washington's going rate for power is about 7 cents per kwh.
So his power bill is probably somewhere in the neighborhood of $70K-80K a month.
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7 cents per kWh seems high. We don't know where in WA he is so we don't know which power supplier he's with, but if it's with Puget Sound Power, here's their power rate schedules (.pdf files). Since we know he's using 1400 kWh, he would probably be on the Large Demand General Service (.pdf), though I am utterly clueless as to what all the talk about secondary voltage is about. The energy charge there is $0.056733 per kWh with other adjustments which, again, I'm clueless about so I have no idea what their significance is.

The article implies that he's in a particular location with really cheap power, so he may be getting less than 5.6733 cents per kWh.

Chas said:
Going rate for 1st floor warehouse space in Washington is around $7-8 a square foot.
Say, 100,000 Square feet? $700K-800K/month.
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When you say Washington, do you mean Seattle? He's probably not there. Pick the right town and you could probably buy a couple of warehouses for much less than that. For all we know he's on the eastern desert half of WA and his costs are tiny fractions of what they would be in Seattle.

I won't debate the costs of the rigs, though. That's going to be an enormous expense, no matter how you get it.
 
I would hope this guy has some serious security - perhaps cops.

I would never ever go public like that. Maybe he got hunted down by the lady who found Satoshio, heh.

That being said, he had some serious capital to get all this going. Me and a business partner are hunting for commercial locations to expand our farms.....and the electrical delivery option + wiring is no cheap thing.
 
atp1916 said:
That being said, he had some serious capital to get all this going. Me and a business partner are hunting for commercial locations to expand our farms.....and the electrical delivery option + wiring is no cheap thing.
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Probably around $5 grand give or take for 600 amp three-phase. Small price if you want the scalability.
 
BB Gun said:
And the hardware contracts are where he's making his money at the moment. That's not his farm mining his bitcoins, its hardware he has built for others to mine their bitcoins from what I understand.
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That's where the smart money is for an operation like this. Guaranteed return and get the money up front.
 
He had an outside investor. He isn't (wasn't) independently wealthy. I have not been to the data center but my son has. It is on the east side somewhere off US 2 near Wenatchee.

BB
 
BB Gun said:
He had an outside investor. He isn't (wasn't) independently wealthy. I have not been to the data center but my son has. It is on the east side somewhere off US 2 near Wenatchee.

BB
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Is there a uhaul rental place nearby?
 
evilsofa said:
7 cents per kWh seems high. We don't know where in WA he is so we don't know which power supplier he's with, but if it's with Puget Sound Power, here's their power rate schedules (.pdf files). Since we know he's using 1400 kWh, he would probably be on the Large Demand General Service (.pdf), though I am utterly clueless as to what all the talk about secondary voltage is about. The energy charge there is $0.056733 per kWh with other adjustments which, again, I'm clueless about so I have no idea what their significance is.

The article implies that he's in a particular location with really cheap power, so he may be getting less than 5.6733 cents per kWh.

When you say Washington, do you mean Seattle? He's probably not there. Pick the right town and you could probably buy a couple of warehouses for much less than that. For all we know he's on the eastern desert half of WA and his costs are tiny fractions of what they would be in Seattle.

I won't debate the costs of the rigs, though. That's going to be an enormous expense, no matter how you get it.
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I know the costs I quoted are too high. I'm presenting worst case scenario.
Even in worst-case, his power costs, and indeed, his physical plant costs are relatively miniscule. And, as you said, there's a lot of things that could be done to dramatically slash even these.

The rigs themselves are the giant kick in the nuts, financially.
 
Well, we here in WA state have some spiffy datacenters near the hydroelectric power generation that might be leased for cheap.

Quincy is right near the hydro dam and the state has a shiny, overbuilt center in Olympia they were trying to get customers for.

http://en.wikipedia.org/wiki/Quincy,_Washington#A_role_in_the_high-tech_economy
http://nwnewsnetwork.org/post/state-acknowledges-washington-data-center-was-overbuilt
http://www.zdnet.com/planning-a-datacenter-learn-from-washingtons-mistakes-7000002399/
This shouldn’t come as a shock to state lawmakers; almost two years ago a report from an external IT auditing firm came to the conclusion that if the state's consolidation, virtualization, and cloud computing plans came to fruition, the datacenter space requirement could be as little as 6000 sq ft. Just one half of one of the four data halls being built.
 
oblox said:
Probably around $5 grand give or take for 600 amp three-phase. Small price if you want the scalability.
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FTFA: "According to Carlson, the operation is using 1.4 megawatts of electricity, which is enough power a town"

More like 6,000A service. A single individual using an entire town's worth of energy ...

(1.4MW/240VAC = 5833)
 
atp1916 said:
I would hope this guy has some serious security - perhaps cops.

I would never ever go public like that. Maybe he got hunted down by the lady who found Satoshio, heh.

That being said, he had some serious capital to get all this going. Me and a business partner are hunting for commercial locations to expand our farms.....and the electrical delivery option + wiring is no cheap thing.
Click to expand...

Yeah, I'm really surprised this guy went public. It really shouldn't be that hard to find his operation and hijack it.
 
BB Gun said:
He had an outside investor. He isn't (wasn't) independently wealthy. I have not been to the data center but my son has. It is on the east side somewhere off US 2 near Wenatchee.

BB
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And there you go.
 
xorbe said:
FTFA: "According to Carlson, the operation is using 1.4 megawatts of electricity, which is enough power a town"

More like 6,000A service. A single individual using an entire town's worth of energy ...

(1.4MW/240VAC = 5833)
Click to expand...

Wasn't taking about his operation obviously... :rolleyes:
 
Chas said:
Basically he's in the hole for the first 13 months. After that, it's $7 mil in profit a month for every month after that.

Basically he had to be someone who was already well-to-do to begin with.

John Q. BasementBitcoiner isn't going to be able to duplicate something like this.
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Just some food for thought.. the difficulty goes up tremendously week for week. So he has to continue adding machines to keep up (which on his scale, will drive it up faster). Most estimates people use fail to take in account how much the difficulty actually changes. We're talking 25% increases every 10 days or so.

Now .. going public was entirely stupid. He better have been paying taxes, as I'm sure he just added himself to the IRS audit list.
 
Rob94hawk said:
Why would anyone want to even announce this publicly? Unless they're an attention whore.
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Carbon already answered your question.

" renting out the hash power to clients (at a premium) to mine for them. Another very lucrative business to be in right about now. "

He will get more clients this way and more money not really rocket science.
 
atp1916 said:
I would hope this guy has some serious security - perhaps cops.

I would never ever go public like that. Maybe he got hunted down by the lady who found Satoshio, heh.

That being said, he had some serious capital to get all this going. Me and a business partner are hunting for commercial locations to expand our farms.....and the electrical delivery option + wiring is no cheap thing.
Click to expand...

i'm pretty sure with an operation this big he has security on site.

You would be a moron not to.

And morons don't pull in 8 million a month.

And that includes paying taxes and having the IRS off your back!
 
I think the real news is that the market is buying $8 Million each month. That's huge. At $650+ BTC
 
I thought the time to make money in bitcoin was long gone. I mean, wasn't it only possible if you were an "early adopter"??


;)
 
The little people made money early on, but anyone who bought when the market crashed down to $10 and sold when it 700 dollars made a shit load of money. Finding the bitcoins now is really the area of special chips designed to do cryto and nothing else. As a result of these machines the odds of getting a coin on slower setups goes down and it is first to find it and flag it that gets the coin. Being in a pool helps but still nothing something you want to get into without a serious investment and things like mt gox stealing all those people's coins make the trust in the system very shaky. The fact that people were able to see that they had not moved or been sold so that people could look into him, helps the system some but right now the risk verse the reward is really bad.
 
atp1916 said:
I thought the time to make money in bitcoin was long gone. I mean, wasn't it only possible if you were an "early adopter"??


;)
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It is long gone for people mining with desktop computers and gpus, this guy is doing the opposite of that!
 
Makaveli@BETA said:
It is long gone for people mining with desktop computers and gpus, this guy is doing the opposite of that!
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NotSureIfSerious_thumb.jpg


That is some mighty fine trollbait there. Good job.
 
Makaveli@BETA said:
really how is that troll bait?

Who do you know that is bitcoin mining with GPU's????


NOTICE I SAID BITCOIN MINE not LITECOIN or another?

Enlighten me.....
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You didn't make the distinction and I, like others, assumed you meant alt-coins. Most of us just mine alt-coins that are auto-converted to BTC anyway so at the end of the day all we see is BTC from our GPUs.
 
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