Mining farms are capital intensive operations that happen on a significant scale dedicated to mining cryptocurrencies. In the past, they have proved to be quite profitable, to the point of getting people excited by the prospects of mining on a large scale.
Mining is a process of solving complex puzzles to validate transactions in a distributed network. Specialized chips and processors can work out hashing algorithms used in crypto coins within milliseconds. Often, they will require dedicated computer power and cycle time and are set up to run continuously, so as to maximize the overall output of a farm. High amounts of electricity are needed to support such an operation.
To set up one requires time, resources, dedication and commitment; a technical background also comes in handy.
Why do people set up bitcoin mining farms?
Mining farms produce massive amounts of computational power that is immensely valuable in the crypto space. Hashing power can be directed to mining almost any cryptocurrency, with just some minor tweaking.
Additionally, mining farms can sell power on open auction markets to willing buyers, or lease power from your mining farm for virtual miners. Essentially, they utilize their own power or rent it out to other people.
Things to consider before setting up a bitcoin mining farm
The first thing to consider is the hashing rate of the bitcoin network. The hash rate measures how powerful your equipment is for this dedicated process. It is measured in kilo hashes, mega hashes, terra hashes or Giga hash pers second.
Your expected profit is directly proportional to the hash rate. Bitcoin’s hash rate has been rising since 2014 and is now at 400,000,000 GH/s. This has drastically changed equipment required.
Before embarking on this, you should explore this comprehensive list comparing different hardware and hashing power produced. For example, (GPU) ATI 5970 graphics card gets you over 800MH/sec while an ASIC churns out speeds ranging from 5-500 Giga Hashes/sec.
GPUs (General purpose unit) and ASICs (Application Specific Integrated Circuits) quickly replaced CPU mining as the rate went up. They are highly specialized and efficient at hashing algorithms but, are quickly being replaced by ASICs, which are 1000X more superior. PoW SHA-256 mining is now dominated by ASICs while GPUs are more suited for scrypt mining such as Litecoin and Dogecoin. .
Typically, a rack will be needed to attach cards and hold them firmly in place. Ample space for setting up racks, running cable wires, air conditioning, and cooling mechanisms is a good idea.
Inevitably, as your chips handle numerous calculations per second, large amounts of heat are dissipated causing significant rises in room temperature. Cooling fans, immersion cooling, liquid cooling are equipment options, alternatively, you can set up in a cold region and leverage cold weather. Heat regulation protects your chips from burn out.
Mining farms are Energy intensive ventures
Energy consumption is a major part of putting this together. Electricity costs money and differs with every region. Working this out tells you whether you are making profits or at least breaking even.
For example, if you have 400 GH/sec devices, taking in 400 watts of power, then your output rate is 1 GH/sec for every watt. Consider this too, an ASIC miner of 65nm takes up about 650 watts per Giga hash. In China, electricity costs about 8 cents per kilowatt-hour. One farm in China, for instance, burns up $70,000 in electricity costs per month.
It is also important to purchase high-quality power supply units (PSUs) and avoid future overloading risk. Use circuit breakers with current ratings slightly above what your devices draw.
Finally, a monitoring set up via ethernet and monitor will get everything together. Monitoring its behavior is crucial for troubleshooting, tweaking, and general survey. CGminer comes highly recommended.
All in all, farm efficiency is determined by inputs and outputs. Inputs such as resources affect the overall cost of running a mining farm. Outputs, on the other hand, are valued by price markets and crypto exchanges. Your expected revenues are therefore tied to exchange rates on open markets. Based on your inputs and outputs, you can work out if it is profitable.