How to cut your cryptomining costs with colocation

How to cut your cryptomining costs with colocation

  • By Tim Hayes
  • Tech
  • Comments Off on How to cut your cryptomining costs with colocation

The value of popular cryptocurrencies has steadily increased over time despite expected fluctuations. While many see the potential profits in the likes of Ethereum, Ripple, and other up and coming cryptocurrencies, many more see mining them as a risky, and potentially unprofitable venture. So how can the risks are reduced by you and costs, and make use of the cryptocurrency opportunity before it’s gone?

Just how to cut your cryptomining expenses

The potential risks of cryptocurrency mining
While the value of cryptocurrencies has just increased over time, so have the challenges associated with mining them.

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That’s because all cryptocurrencies count on blockchain: a distributed, peer-to-peer ledger technology that ensures cryptocurrency deals are validated and protected. Miners add new blocks to the chain by utilizing mining software to identify Secure Hash Algorithms – and inturn, they’ve been offered some cryptocurrency devices.

Because miners are effortlessly competing become the very first to solve a particular Secure Hash Algorithm, budding miners run into a few challenges:

Numerous cryptocurrencies have a limit to how many units can be in circulation at any time
The mining scene for popular cryptocurrencies can be very competitive, making it difficult to get started
Less currencies that are popular be easier to mine, but there’s no guarantee they are going to stay valuable over time
Beyond these risks and challenges, there is another concern that is key how exactly to get the energy, space and compute resources required to power cryptocurrency mining pc software.

The compute costs of mining
Effectively mining cryptocurrency requires a variety of important assets that will potentially come at a high cost.

Hardware
All miners need some kind of hardware to power their mining applications. Some use a conventional CPU, others use a customised graphics processor or field-gate programmable array, and much more recently some miners have started using pre-programmed application-specific integrated circuits.

Whatever hardware you decide on, you’ll need to carefully consider how it balances cost and flexibility, and how this stacks up against possible profits.

Power
The hardware used for mining has a tiny physical footprint, but GPUs and ASICs consume vast amounts of power. And when you factor in the power that is additional of keeping the hardware cool, it’s a significant price that can cut deep into potential earnings.

For instance, the bitcoin system presently uses approximately 16TWh of electricity each year, accounting for 0.08% of this world’s energy consumption. This is the same as powering 1.4 million average households – or the entirety of Tunisia to put this in perspective. The energy cost of a transaction that is single power five households for every day.

Network
Because Secure Hash Algorithms must be submitted towards the cryptocurrency system, it’s important for your mining operation to have a network connection that is stable.

Making sure you have a low-latency network connection can also supply you with the best possible chance to solve a block and mine the cryptocurrency before someone else can.

Safety
Significant players in the mining community have been goals of distributed denial of service (DDoS) attacks within the past. So, if you’re considering mining seriously, you’ll want to ensure you have a network that is secure precautionary measures set up to keep downtime to a minimum.

Similarly, physical protection must also be a key concern if you intend on mining seriously. Without a secure site for keeping your mining equipment safe, you operate the risk of theft.

Colocation can help you maximise your gains
Most of these mining needs accumulate to a significant investment. While the expenses could be significant, the possibility for earning cash is higher than ever – plus it’s an opportunity that numerous will need to capitalise on prior to the mining market becomes much more saturated.

So how can the costs are cut by you, reduce the risks of mining, and work out the a lot of the cryptocurrency possibility?

uk server colocation can help reduce the risks and costs associated with cryptocurrency mining – and increase the quantity of profit you can make from it.

By moving your mining gear into a provided uk server colocationmanaged by a third party you can:

Significantly reduce power costs – uk server colocation are made to handle energy that is massive in the absolute most efficient method possible
Get a stable, low-latency network for less – data centres offer enterprise-class internet with dramatically greater uptimes
Secure your valuable mining assets – uk server colocation can offer a many security measures, ranging from CCTV and guards, to comprehensive DDoS protection
For more information about more about cryptocurrency, and how colocation can transform mining profitability and risk, take a look at our cryptocurrency mining paper that is white.