Meet the Miners #2: Jason Deane
Meet another of our newest remote mining customers, Jason from the UK.
This is the second in our series where we will try to give you some insights into the sort of people who are hosting their machines with us in our Siberian facilities.
Jason was already mining with GPUs and he decided to get into ASIC mining by buying his very first Antminer S9 via us. It’s been installed in our hosting facilities for about one month now.
Where are you based and how long have you been mining?
I am based near Wokingham, Berkshire in the south of England. I’ve been following the crypto story since about 2014, but only started mining in the summer of 2017 and initially it was only for Monero as it suited the cards I had at the time, Nvidia 750tis.
Are you mining full time. And if not what else are you doing right now?
I sold my business recently so I could concentrate on crypto full time, but there are several aspects to this, so it’s not just mining.
For example, I have been consistently investing in most of the major coins over the last year or so, and plan to continue doing so for some time. With some colleagues I have also ventured into the world of masternodes, which is highly risky due to the 90% plus failure rate, but is also a fertile ground for new ideas and applications of technology.
However, my full time focus right now is building up my blog, originalcryptoguy.com, and speaking/consultancy engagements in the area of cryptocurrency. I consider myself a “cryptocurrency evangelist”, effectively spreading the message about cryptos, and driving adoption.
In terms of mining I currently have three areas of operation:
My original 16 card 750ti operation still in place mining for Monero
My 12 card 1080ti rig (affectionately known as ‘Big Blue’) mining alt coins running through various pools chosen at regular intervals by SniffDog. With the way that alts have dropped recently against Bitcoin, this operation is only just about managing a break even, so I have switched to a ‘stockpile’ strategy and funding the cost of operation from other areas. In other words, I am betting on a higher future value of Bitcoin, making the current mining output worthwhile.
My new Antminer S9 (which I have affectionately named ‘Eddie’) hosted with Cyberian Mine directly mining Bitcoin. I am considering adding more Antminers in due course.
How did you hear about Cyberian Mine — and why did you choose to work with us?
I stumbled across Cyberian Mine quite by accident whilst researching an article about mining for www.originalcryptoguy.com. It caught my eye immediately as it was well presented, had a friendly tone and was quite simple to understand.
Having always wanted to find a way to mine Bitcoin directly, I made a note of it and came back later. When I did so, I learned it was quite a new operation, but well funded, and clearly run by passionate and professional individuals.
It ticked all the boxes for me — allowed me to own (rather than rent or share) a machine, had full and guaranteed support, direct access to the machine via a real time interface, very low mining costs which could never be matched in the UK and, most importantly for me, a green source for the power.
From a customer point of view it’s a very simple ‘Pay and go’ system — there’s very little for anyone to do to get going and the payments are made automatically into a wallet of your choice usually every 48 hours. Easy!
You saw a “ray of hope” for small scale miners earlier this Summer. What was the hope — and do you feel the same one month later?
Great question! I track our daily mining results through Big Blue very precisely against the markets both in USD and BTC. Most operations, even those running on expensive power with inefficient set ups, were profitable in the boom time of November 2017 to January 2018, but after that you had to be smarter. It’s become clear that the ideal scenario occurs — purely from a small scale mining point of view — when BTC’s price is lower, in relative terms, than the alt coins you are mining either directly or through algorithm (my preferred route) and network difficulty is lower overall, allowing each mining operation a larger share of the pie.
Some people think these days are over forever, but I disagree. In the brief market rally we saw at the end of July, profitability from Big Blue increased by over 25% for a few days, before declining again after the delayed ETF decision by the SEC. Whilst the bear market may prevail for a while yet, it will inevitably recover as the oversold conditions match up with the exponential technological advances being made.
This means, in turn, since the mining costs are generally fixed, the rising market, and especially the function of alt coin prices relative to Bitcoin prices, will drive up profitability once again. Timescale may be an issue for smaller miners though who, in the short term, may be better off shutting down their machines if they are needing to sell the Bitcoin to pay for the operating costs.
What calculations do you use to try and work out if investing in mining beats a simple buy and hold strategy?
This is a fair question and one I have been asked a lot, especially about buying an Antminer and mining Bitcoin directly, so I will answer from that perspective. I think much of it is how you have set yourself up to mine. Right now, whilst the Bitcoin price is low, there really isn’t much value selling the Bitcoin to cover the operating cost and keeping the profit — what you might call the ‘traditional’ model. I am long on Bitcoin, so I don’t consider the current price so much as I consider the future price.
So, if I am mining, for argument’s sake, 0.2 BTC per year on a single Antminer S9 machine, this will be worth only $1300 a year at the current price (around $6500), but it would be worth $5000 a year on a price of $25,000, yet it’s the same Bitcoin, and timing is the critical part.
Since the costs of running the machine with Cyberian Mine are so low, I can finance this through natural fiat cash flow and receive the Bitcoin net, ie there are no ‘fiat to Bitcoin’ costs, which alone can be quite expensive and quickly erode your investment capital.
Finally, I have assumed that the government is going to want their share of the mining profits, so all my mining operations are run through my company, allowing me to claim depreciation on the asset (ie ‘Eddie’ The Antminer himself) and allowing me to claim operating costs against the final value of Bitcoin at the point at which it is sold, thereby reducing tax.
