Maximizing Miner ROI: How to Optimize Hosting Capacity

Senior Manager of Business Development Charles Chong discusses how miners can optimize hosting capacity and maximize returns in a rapidly changing mining landscape.

As recent mining economics have delayed hosting site construction and energy prices have risen, miners have to think about which machines to leave powered on and at which sites.

Let’s look at a few scenarios to understand how we can optimize the placement of units. We will look at four models of machines — S19 Pro, S17, S19 J Pro, and S19J — all with breakeven hosting rates at different BTC prices and global hashrates as shown below:

For the following scenarios, let’s assume a $20k BTC price and 260EH global hashrate.

Scenario 1

The miner has 1,000 S17s currently co-located with a hosting provider at Site A ($0.05/kWh). With 1,000 S19 Pros coming in, the miner has the opportunity to sign a hosting contract with a different provider at Site B ($0.08/kWh). What are the miner’s options?

Option A: Keep the 1000 S17s plugged in at Site A; plug in the 1000 S19 Pros at Site B since all units will be profitable.

• 1-Month Profit with 95% Uptime: $64,000.

Option B: Disregard Site B and ship the 1000 S19 Pros to Site A, substituting the 1000 S17s.

• 1-Month Profit with 95% Uptime: $107,000.

Decision Point

Option B is more profitable. Here’s how we can optimize:

Start by matching the highest efficiency machines with the lowest cost on paper.

• In this case, compare the S19 Pro $0.098/kWh breakeven with the $0.05/kWh hosting provider and the S17 $0.064/kWh breakeven with the $0.08/kWh hosting provider.

The scenario above assumes the hosting provider has extra power available as 1,000 S19 Pros consume 29% more power at 3.25MW than the 1,000 S17s consume at 2.52MW.

If power instead of form factor is a constraint, the miner should:

• take out all S17s at Site A;
• plug in 775 S19 Pros at Site A; and
• sign a hosting contract for the remaining 225 S19 Pros at Site B.

Scenario 2

The miner has 1,000 S19J Pros (96Th, 29.5J/Th) and 1,000 S19Js (110Th, 36.0J/Th) coming in but only has capacity for 1,000 machines. Which machines should they plug in? Should they opt for the S19J Pros with higher efficiency or the S19Js with higher hashrates?

Let’s examine two cases — $0.03/kWh vs. $0.08/kWh hosting:

$0.03/kWh hosting:

Option A: Plug in 1,000 S19J Pros at $0.03/kWh.

• 1-Month Profit with 95% Uptime: $133,000.

Option B: Plug in 1,000 S19Js at $0.03/kWh.

• 1-Month Profit with 95% Uptime: $138,000.

$0.08/kWh hosting:

Option A: Plug in 1,000 S19J Pros at $0.08/kWh.

• 1-Month Profit with 95% Uptime: $35,000.

Option B: Plug in 1,000 S19Js at $0.08/kWh.

• 1-Month Profit with 95% Uptime: $0.

Decision Point

The answer depends on the hosting rate. If the hosting rate is $0.03/kWh, the miner should opt for Option B. If the hosting rate is $0.08/kWh, then Option A would be more profitable.

As mining economics worsen (e.g., rising hosting rates, falling bitcoin price, increasing difficulty), it’s critical to focus on high-efficiency machines. A hash that generates 0 profit is not worth anything.

On the other hand, having different hashrates matters more amid strong mining economics. Overclocking — which increases hashrates and reduces efficiency — is more advantageous amid strong mining economics. This also explains why higher-efficiency machines have more significant premiums amid lousy mining economics.

Scenario 3

Similar to Scenario 2, let’s say the miner has power limited to 2.832MW (just enough for 1,000 S19 J Pros) at $0.03 kWh.

Option A: Plug in 715 S19Js.

• 1-Month Profit with 95% Uptime: $98,000.

Option B: Plug in 1,000 S19J Pros.

• 1-Month Profit with 95% Uptime: $133,000.

Decision Point

Option B is more profitable. If energy capacity is constrained, always plug in the more efficient units.

Conclusion

In scenarios similar to the ones we looked at today, the more prudent and analytical miners will gain an edge over the others. Varying hosting rates, capacities, energy constraints, and hashrates all factor into hosting contract decisions. However, in addition to determining how to optimize hosting capacity, moving and shipping machines add a layer of complexity — and we can help.

Amid rapidly changing mining economics, miners should only have to figure out where to place which units — not how to get units shipped and installed. Foundry’s full-service mining equipment installation program, Foundry Deploy, and shipment solutions, Foundry Logistics, are designed to take the burden of shipping and setup off your shoulders.

For more information about our installation and shipping solutions, please visit foundrydigital.com.

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