Wednesday, December 6, 2017

On Bitcoin Mining 8

Here we go, just another chapter in a Bitcoin mining adventure.

So, I had a perfectly good Bitmain Antminer R4 earlier this year and when I saw how much I could make selling it compared to the heat, noise, electric bill and slower return on investment I decided to sell it. What I made was almost double what I bought it for (and for a lightly used miner) that's how hot the market for Bitcoin miners in May/June 2017 was and still is. 


The Antminer R4 was my favorite Bitmain product because even though it is a powerful miner it is pretty quiet compared to other miners. Why they stopped making it is beyond me but I have a feeling that they wanted to concentrate on making, noisy but modular, Antminer S7's and S9's which they could sell to mining farms by the thousands and hence make a better profit, sort of giving up on the home-oriented miners market.


At any rate, since there was a more immediate profit to be made for me by selling Bitcoin miners as opposed to mining Bitcoin with them I decided to buy a couple Antminer S9 Bitcoin miners from Bitmain and resell them. There was a wait to receive them in June but it was only about a month or so at this time. Buying from the Bitmain company in China was (and is) not a simple process, as most people will tell you who try to buy miners from them - one of the reasons that people are willing to pay more on eBay or Amazon. It is simpler there and less of a hassle. The communication is inefficient with Bitmain, which is understaffed in their sales department. In addition, they are always changing the accepted method of payment, sometimes it is with Bitcoin, sometimes with bank transfer, and now with Bitcoin Cash.

Anyway, eventually I received the two Antminer S9's and wanted to test them to make sure they were operable before I listed them and shipped them to a paying customer. Luckily I had a 1375 watt power supply, so I hooked one up and tried to find it on the network. It seems like this is always difficult when you first turn on a miner and try to find it on your network. When I did find it and assigned a mining pool to it, the machine started mining and I was treated to the trademark Antminer "jet engine" noise that I discovered with my Antminer S7. I don't know if the S9 is louder than the S7 or if they are the same but there is no way I would be keeping either one of these loud ASIC miners since I only have a garage and not a mining farm. Both S9's operated well, hashing away at around 14.5 TH/s. After my brief testing was complete I listed these on eBay and eventually sold them for a 70% profit. Not bad.

Since this fiscal adventure was a success I decided to do it again. However, the next time I wanted to buy some S9's to sell I would have had to wait two months to receive them, so I decided to look elsewhere, if possible, for Bitcoin miners that I would receive sooner. (Apparently other people were having this idea too.) The company I settled on was another Chinese company called Canaan who were making and selling a nice miner called the Avalon 741. Unfortunately, they were just as hard to communicate with as Bitmain, also being woefully understaffed to meet customer demand. But once the back and forth about price and shipping were taken care of and the bank transfer went through, they shipped and I received the machines within two weeks of my initial contact with them. This was probably the last good experience anyone would ever have with them as the company was beset with orders because people wanted and needed miners and Bitmain became even more backlogged. Now Canaan would be backlogged too. 




But for now this first buying experience from Canaan was pretty good. They accepted bank transfer, shipping cost from China was reasonable and I received the machines fairly quickly. This time I bought five machines and controllers and tested one or two of the Bitcoin miners. Within a couple of weeks they all sold and though there was a profit it was significantly less than on the Antminers. The reason the profit was less was that these miners didn't have the same reputation in the mining world as the Antminers do. Also the Avalon 741 hashes at a slower speed than the S9 and so for these reasons it was somewhat less sought after. One of the controllers and miners I had sold did not function properly and were sent back by the customer. After refunding him I determined that one of the hashing boards was inoperable. Canaan support was very helpful and sent me a new hash board which was pretty easy to replace. I was then able to sell the refurbished miner.

The Avalon 741 runs quieter than the Antminer S9. This is because it has only one variable speed fan and because it runs at half the speed of the S9 (7.3 TH/s vs. 14.5 TH/s). It is a good, sturdy and steady Bitcoin miner with a good user interface. It uses a controller (Raspberry Pi) which you have to buy, hook up and power separately and this is unappealing compared to Antminer's onboard controller. I did run the Avalon for about a month and made some pretty good Bitcoin with it, above and beyond electricity cost, so it was a positive experience overall.

As of December 6, 2017 it is almost impossible to get a Bitcoin miner unless you want to pay at least double the price. Bitmain has a 2 to 3 month waiting period and only accepts Bitcoin Cash. Canaan doesn't even bother to sell to individuals any more and their distributors either have a waiting period, no miners to sell or sell out as soon as they put them up for sale. Jhejiang Ebang, who makes the Ebit series of miners, which I will talk about in the next blog posting, is having the same problems. They don't respond to e-mails after you make an order and apparently don't want to deal with individual buyers.

With Bitcoin's precipitous rise in price I think I am back to feeling that it is better to mine for Bitcoin if you want to make money from Bitcoin rather than selling the machines -- that is if you can get your hands on the latest version (or any version) of a Bitcoin ASIC miner. Just buying Bitcoin and holding may indeed be the wisest strategy, even at this point when it is 12,783 dollars for a single Bitcoin.
 

The next blog post will cover my Ebit E9 plus Bitcoin miner experience.

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