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Choosing Miner Hosting, Colocate or New Build for increased Bitcoin mining?

Last night I was doing some research and came across this interesting piece about businesses having to decide between expanding their current datacenter operations or using traditional colocation to host their needs.  This got me thinking that Bitcoin miners may be going through the same dilemma.   They have to choose between co-locating their mining hardware with a datacenter provider or building their own mining facility.   As mining becomes increasing competitive and professional, you tend to see larger and larger mines even as the number of  professional miners is falling.  Bitcoin Mining is still open to everyone and there will be opportunities for the foreseeable future but mining "for profit" is changing in character so that if you want to do this as a full-time job, you will need some serious mining hardware and a facility that can run it.   This is where this choice comes into play.
Both animals having different pros and cons.  If you choice to go with colocation, you may pay more compared to running your own if you look at a 2-3 year timeframe but you will also retain the option to move hosting providers or scale back your mining operation on market conditions with less penalties than if you have your own datacenter and had to continue to cover the carrying costs while you wait for the market to recover and come with a new plan for profitability.   If you build and manage your own facility you have better control over costs and if done correctly, you may be able to use it for other application or sell it as an asset.   These are all questions that Bitcoin miners need to ask themselves in 2015.  Us personally, we started mining when you could run many multi-GPU setups to make good income, we went through two generations of ASIC before we decided change direction and open a datacenter for Bitcoin miners.  After we launched, we have talked to many customers about these choices.  Some have decided to own and operate but the vast majority still rely on colocation. 

The one portion that doesn't get highlighted in choosing to run your own facility compared to hosting in another is management.  I have seen more than one operator that has found a great location and build-out only to get burnt out on the lifestyle change that comes with administering their own Bitcoin Mine.  That means you need to live in the area, hire someone or travel to the DC when something goes wrong.   Being at this for 3-years now, we have come to greatly enjoy the challenge but it has come with a lot of hard work and dedication.  I hope this can help shed a little light into this subject for current & future Bitcoin miners.  Unless you are willing to go all in and be able to address many problems without getting discouraged, affordable colocation is usually the best choice for most miners.  

If you have any further questions or areas you would like us to highlight in another article, please contact us.   Have a wonderful day.
Lauren Miehe

Co-founder of   Washington State.


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