“Now I would recommend buying equipment.” We’ve talked to the solominer about his experience

  • Ultramining
  • 29 May, 2023 15:10

“We are all fighting here for one egg, the size of which decreases every four years. And the more competitors we have, the less everyone is getting. But at the same time, we [miners] have a very friendly community. And people are quite actively sharing their best practices”. That’s how the Russian miner with a nickname Intuitive describes the sphere into which he plunged headlong a couple of years ago. We talked to him about who should enter the cryptomining, when is the best time to start and when it’s better to buy equipment.

Let’s have some background. When did you start mining? And what did you do before?

I started mining at the beginning of 2021, but two more years before that I was engaged in cryptocurrency. I’m also an IT specialist by education. Since 2012, I have invested quite successfully in the Russian financial market. Even earlier, I was engaged in optimizing business processes for different enterprises. So, the sphere of finance, technology, IT — it is close to me.

And what was the reason for diving into mining?

I had a kind of internal restructuring in 2021, and I wanted to change my occupation. Some smart friends suggested paying attention to mining.

Just that summer there was a story with a ban on mining in China, and as a result, a lot of cheap equipment appeared on the market. It used to work in China, and it has started to be sold in other regions including Russia. The situation was as follows: the complexity of mining was falling, because the power of miners based in China was turned off, equipment prices were excellent — and a good entry point was formed.

You are lucky that both the desire and the market situation have coincided. Do you remember which equipment you’ve chosen to start?

Sure. At that time, I purchased m21s 56 Th/s. Calculators showed me payback approximately in the year. I took second-hand equipment from China, because the new one was many times more expensive.

How was the process going?

Everything was as always: I took the equipment in China, it took a long time to deliver it, then I searched for a hotel to place it. That’s lots of time, and I started only at the beginning of September. The process was running, but I lost time.

And here is the first life hack for beginners: before buying equipment, you need to think about where you will place it. If this isn’t thought out in advance, then delays are possible, and in this case it’s a loss of money.

Everything was going well. In 2021, there was just a peak in the price of bitcoin, and for several months I was euphoric because I finally found a money printing machine. I bought more equipment: I ordered one batch, then another.

And then it was January 2022. The price of bitcoin began to fall, the complexity began to grow sharply, because the equipment that was once disconnected in China began to be reconnected in other regions. In addition, my equipment has become less profitable. Almost everything it brought in was spent on electricity. I didn’t have time to recoup it, but I managed to sell it at the beginning of 2022, when bitcoin was just starting to fall. I sold about 70% of the equipment and made good money on it. But some of the equipment remained, so I continued to work. The whole year 2022, with the fall of bitcoin to the bottom, led to the fact that my old equipment at 56 or 68 Th/s had to be turned off, because it didn’t bring income.

In 2022, many solominers and data centers stopped working as they failed to sit out the lowest months. How did you overcome that period?

I managed to sit out. I think it’s all about loving cryptomining. The topic is interesting — it’s true, but you have to love it, have a real interest in it. If there is no such a thing, and a person is only waiting for money, then it’s hard there.

I advise such people to simply buy bitcoin and wait, because even the holders have good prospects. But it’s also important to withdraw some money, because if you don’t withdraw anything, I know from experience with investments, then you don’t understand at all what and why you are doing. Regardless of what the market is now and how much bitcoin costs. You need to withdraw some and spend it on yourself, on your family, on your loved ones. And this brings many times more joy than just the feeling of owning bitcoin.

Speaking of feeling joy. Miners often talk about achievements, practical life hacks and other things. But are there also just funny stories in your environment? Maybe you can remember something?

I remember one interesting story. It was the first time I bought equipment. I found a person who is engaged in these sales via Telegram, quite a famous one. And so I came to his office in Moscow. He was sitting on the phone without stopping chatting as everyone was writing to him non-stop, because there was a boom in equipment. And he says to me irritated:

“Hundreds of people write to me, they all want something, but I don’t know any of them. And everyone comes to my office and buys something. I have to check everyone through a service that shows how a person is signed in the Contacts in other phones. And look, a guy is writing to me now, and he is signed by several as a Killer. Now he wants to buy equipment from me. What should I do? I don’t need a killer! I won’t sell anything to him…”

These are the stories that can happen in our sphere.

As far as I understand, you continued mining in 2022 and after that. Did you have to restock equipment?

Yes, I bought the equipment in May 2022. Then the price was falling, it seemed that it was already great, but then the cost also decreased by several times. My experience shows that now is a good time to buy equipment. The payback of new equipment at the current initial is about a year.

I came up with a formula for myself: if I can buy equipment that has less than 50% electricity costs in the production of bitcoin, and it pays off in a year, then this is a good entry point. Now everything is just like that: the new energy-efficient equipment comes at fairly low prices, which allow us to hope for a good profit.

Excellent practical advice from an active miner. I think many will take note of it. And in terms of a longer strategy, can you share your experience?

It seems to me that it is strategically correct to have bitcoin in your investment wallet, and then you can enter the equipment by selling bitcoin; it’s at the moment when you see the payback of the equipment in 12 months. Such offers, of course, can be difficult to find, but if bitcoin has a high jump that takes it up, then the equipment doesn’t have time to grow in price. And then you can sell bitcoin and buy equipment that will bring it to you.

In any case, this strategy is close to me, and I use it myself. I was buying equipment when bitcoin grew from $20k to $30k. Of course, then the prices of equipment also went up, but I sold bitcoin and took the equipment. In this case, the earnings will still be more. But these are my ideas about the future, so we’ll see if I’m right.

You really have something to share. Maybe there are tips for those who are just planning to enter mining?

I can say for sure that calculators cannot be trusted, not anyone. And you need to plan more costs. You have to understand that complexity will always grow. Yes, it will lag a bit behind the growth of bitcoin, but it will grow faster than you think.

And you also have to be ready for anything. And there will be a lot, a lot of work with costs. Try to look for cheaper hotels and equipment, when it’s better to sell some of the old equipment and buy a new one, and where to just wait patiently. You can’t earn money head-on here. You need to invest here, look for options. Public and simple paths will not work.

This material is the first of a series about solominers. We want to tell you more about the people who are engaged in cryptomining, about their values and goals, their strategies and tips for colleagues. If you have interesting stories, write to us at info@ultramining.com.

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