How I became a miner, Part 6

By this point I have gotten comfortable with the way my miners are working. When they are rented out they do well (except when the renter’s pool fails, which happens more often than you might think) and I have never had an issue collecting my rental fees. When I’m mining in my own pools the miners generally behave as I would expect them to. When they don’t I know how to recognize the signs and reboot them. The representative from the very first data center I’d contacted gave me this bit of insight about rebooting miners. Sometimes their cache memory gets cluttered and that interferes with their ability to hash efficiently. The way to solve that problem is to shut them down, wait two minutes, and then start them up again. He even did this on a schedule for all rigs several times a week. I have had to take this action several times and it basically solves everything.

Then I paid my first colocation bill and that drove home to me the principle of scaling up. The difference between my bills and my net gains will increase if I can get my hands on more hashing power. More specifically, my profits will increase if I can increase my hashing power more than the added hardware increases my colocation costs.

That’s when I started looking around at mining rigs on eBay. At the time there was quite a selection. I knew I needed to find the rig which had the most hashing power while using the least amount of power. Oh, and it helped to also be able to afford the rig–a challenge since the price of Devcoin is still hanging out in the gutter, and that’s what I have stockpiled at the moment.

The rig I found which best met my criteria was the Zeus Lightning X6, which uses less than 1,000 Watts and puts out between 40 and 44 MH/s. I sent a link and a quote request to the data center.

That’s when I learned that my colocation costs aren’t just about power usage. There’s also physical space to take into account. The data center charges its fees on three different factors: electrical consumption, Internet use, and physical rack space. Mining doesn’t present much of a load on the Internet so I don’t get charged for that. Electricity is a fixed cost which is passed on to the customer. The data center offered me an introductory deal on my first rigs and didn’t charge me anything for the space, just the electricity. But this new rig I wanted was going to take up around four or five unit inches of space, as unlike my Black Widow and my Furies, the Zeus Lightning was standard server size.

That’s when I learned that once Scrypt mining rigs get beyond the hashing power of a Black Widow, they become server size. My instincts were right about trying to maximize my hashing power for the amount of electricity the rig would use, but the fact that these more powerful rigs aren’t exactly small put me in another category of colocation fees.

Fortunately the data center decided to give me a discount on my space and my fees for my new rig would merely triple my monthly bill, while quadrupling the amount of hashing power. So I would gain an advantage from scaling up.

I placed my bid on eBay right before the auction closed and the rig is now on its way to the data center.

The owner of the rig told me he was going to use the proceeds of the sale to upgrade to GAW Hashlets. I wonder how many other rig owners put their hardware up for auction so they could buy Hashlets. I will write more about Hashlets later, but for now the Hashlet craze just might be creating a nice little opportunity for me.

Next on my list is to purchase one more Black Widow, also known as a Zeus Hurricane, so that I can completely fill out my original shelf. That shouldn’t be a problem once my Zeus Lightning is settled in and hashing away. At that point I can look into expanding into more shelves, but not until I’ve been able to cash out some profits. For the time being I’ve been putting everything I’ve earned (and then some) back into this rig purchase and its accompanying power supply unit, but it doesn’t pay to reinvest everything if for some reason it all goes belly up tomorrow. Return on investment is very important–not just to have the numbers in a spreadsheet, but to actually take that return and spend it on something other than more mining gear. The mortgage or home electricity bill, for example.

I’m also finding that I have to balance out the gains from mining a brand new coin and then selling it for more than it costs to mine vs. the gains from sticking to a good reliable multipool in between renters. The speculation game can give huge returns, as my recent adventure with LiteCoin Dark indicates. When it was all said and done, I made $220 off mining and selling that coin, and I could have made a whole lot more if I hadn’t been wanting to buy a mining rig right then. The downside is that it involves a lot of management. I have to be watching the pool, watching the price on the exchange, and making my moves at the right time.

On the other hand when I point my rig to a good multipool I just collect the payouts and I don’t have to worry about it. I check my Mining Rig Rentals account every so often to make sure my fees match the market value, and that the rigs are hashing at their advertised rate, but other than that there isn’t much for me to do. I can focus on other things in my life, the income being close to passive. The downside is that the gains are lower. I’m not going to clear $220 mining in a multipool with only 16.8 MHs. I’m not going to clear that much renting out that hashing power constantly either. Renting out the power does better than the multipools in terms of returns, but neither are as lucrative as a successful new coin. Neither take up all my time and mental energy like a successful new coin.

For the time being I’m back in the multipools–sort of. I’m actually mining Litecoin. I learned by checking the rates on my Zen Miner account that the Litecoin Pool is actually doing better than all the other multipools, and is on par with the Zen proprietary pool. The recent introduction of merge mining DogeCoins has helped a lot. Most of the Scrypt multipools are heavily invested in mining LiteCoin anyway, and now that DogeCoins are thrown in, I’m sure LiteCoin mining will only dominate even more. I might as well focus on LiteCoin for a while. I’m nearly halfway to mining my first entire LiteCoin on that pool. And I’m hoping that some renter decides to rent my rig soon, as even with merge mining DogeCoins I still do better with renting out than with the established pools.

This brings me back around to the original hardware that I left with GAW/Zen, and the interesting twists and turns that the GAW/Zen entity along with its Hashlets has taken over the past six weeks or so.

Stay tuned.

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