6Block Core Developer: How to Choose Reliable Filecoin Mining Providers
This article is based on a live stream interview of 6Block Core Developer Lee White with ZBG.com, a leading crypto exchange.
ZBG: At present, there are three ways to participate in Filecoin mining: cloud mining, hosting, and building up mining rigs yourself. What are the advantages and disadvantages of each of these three ways?
Lee White: First, for those who want to build up mining rigs themselves, 6Block has published an optimized version of the mining software on Github https://github.com/shannon-6block/lotus-miner for free. At first, we thought that retail miners might be able to get started easily with this software, but we found that even so, people who mine themselves still face great technical difficulties.
Why? Because for Filecoin mining, in addition to having optimized mining software, the miner also needs to solve problems like networking, i.e. how to build a local network to connect storage and computing devices, how much transmission bandwidth between them, how to arrange routers and switches, etc. Second, miners need to build a local distributed storage solution by themselves, which needs to be implemented with some distributed storage software, which is also difficult.
So in the process of building the mining rigs, if the miners don’t have a strong technical background, they will encounter many problems. Although the cost is the lowest and everything is controllable, they need to troubleshoot a lot of challenges.
The second option is hosting. Miners buy the mining hardware and give it to mining facilities for hosting. It will be low maintenance for the miners, but the miners need a minimum of 15,000 USD initial investment to buy the mining hardware. It has a high entry barrier.
The third option is to buy cloud mining services, which is at a lower cost per unit and more practical. But its disadvantage is that you can’t see the real product in the whole process. Therefore, when choosing cloud mining providers, the customer needs to do a lot of homework to verify the credibility of the providers.
So to sum up, if the customer wants to choose hosting or cloud mining services, they need to verify the credibility of the service provider. If the customer chooses to build its own mining rigs, it requires a high technical skillset.
ZBG: What are some hidden risks in the cloud mining market that the customers should look out for?
Lee White: When selecting cloud mining product, the customer should focus on three issues. First, most of the time, cloud mining vending platforms are not the real tech provider, so the customer needs to find out who is really providing technical products. The customer has to be vigilant not to fall in MLM schemes. This is very important. If you find that the other marketing material is full of empty marketing pitches and MLM-related guides, you should be very vigilant.
The second is to find out how long and in what speed does the providers fully onramp the storage space. It needs time to onramp verified storage space in Filecoin mining. So when buying a cloud mining product with 1T of storage space, make sure to find out exactly how long and in what speed the 1T storage will be filled. The difference in earnings is huge. It is very difficult to onramp 1T of verified storage on the first day of mainnet launch, but three months after the mainnet launch, the entire algorithm and hardware are relatively mature, it will be very easy and low cost to fill 1T. If you can get the storage filled on the first day, you can get a profit throughout the contract period, but if you get the full storage filled on the last day, it is difficult to get a profit. Therefore, the customer must know how the provider fills the storage space. Different onramping plans will ultimately result in huge differences in mining returns.
The third point is about the warranties and after-sales services, such as how long is the service period, one year or two years; and if the customers don’t recover their initial cost, would there be any compensation, etc.
ZBG: What are the advantages of 6Block’s Filecoin Mining services?
Lee White: The advantage of 6Block is in our technology. We are a tech-oriented team with a lot of blockchain background. So when faced with mining problems, we often benefit from past experience and knowledge to solve it. We are constantly optimizing our mining software and have published a free version of the software to the community.
Our second advantage is transparency. When we first entered Filecoin mining, we noticed that many miner manufacturers were not open about the configuration of their miners. They would not tell the customers their detailed configurations.
Before buying a bitcoin miner, you probably know its configuration and you can have an expectation of its costs and output. We decided to go transparent and list all the configurations in detail during the production process to let users know what is in the mining hardware. So the customer can have a clear idea of what they are buying.
The third is the advantage of latecomers. We have no historical baggage. We only started to invest in Filecoin mining in February 2020. Everyone knows that Filecoin’s launch time has been changed several times, and the algorithm has also been changed in the middle. Much previous hardware has been rendered useless due to such changes and many early movers have thus experienced customer complaints or even lawsuits.
Our team has none of that historical baggage because we have not hoarded hardware equipment, and the equipment we tested was purchased by ourselves in small batches. It wasn’t until the algorithm was finalized and our various tests were done that we determined our current commercial hardware solution and began to purchase in large quantities, so the hardware we provided was the latest and optimal.
Well, that’s all for today’s sharing. Hope it is helpful.
Happy mining!
6Block focuses on “Unicorn” projects in the blockchain area, providing solutions for cryptocurrency mining, including highly efficient mining programs, mining pools, hardware, cloud mining, and wallets.
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