Compass mining customer Eng Taing
Eng Taing is in the business of making money.
He runs his own private equity company with $ 250 million in assets under management (According to his website), Has invested in real estate and has been involved in data science and analytics. Apple — And he entered Bitcoin Long before 2013, when it became common to place passive bets on crypto asset classes.
Currently, Taing is running 261 personal mining machines that generate the world’s most popular digital tokens.
“I like making money,” Tane told CNBC.
“I’m investing in a lot. I have a lot of apartments, I have a home for the elderly. I have a GPU mine,” Taing continued. “I just like to see where I can get the benefits of some good arbitrage, and I thought Bitcoin mining was presented from both” and — but also I I have a great belief in the future of Bitcoin. “
Bitcoin works with the Proof of Work mining model. That is, miners around the world run high-performance computers to simultaneously create new Bitcoins and validate transactions. This process requires expensive equipment, some technical know-how, and a large amount of power. Taing outsources most of its work with the help of Compass Mining, a service that hosts, supplies and operates mining rigs for retail miners who do not want to process the logistics that physically handle mining equipment. I decided that.
So far, the experiment has been pretty successful, according to Taing. Of his 261 mining rigs, including Canaan AvalonMiners, Bitmain Antminer S19 Pros and Whatsminer M30 Ss, 200 are hosted through Compass in Nebraska and Canada. According to the digital receipts he provided to CNBC, they generate about 2.8 Bitcoins, or about $ 111,000 a month.
Taing also makes money by buying and selling mining hardware to retail customers in the Compass market. They usually buy one or two at a time and are less price sensitive.
CNBC talked to multiple Compass customers to better understand their desire for a smaller mining industry that is increasingly competing with key industry players in large businesses. But Compass CEO Whit Gibbs says that’s exactly what it’s all about. It’s about gaining market share for retail miners and putting the network in the hands of the people.
“It will effectively give small miners a significant share of Bitcoin’s network hash rate, which was always our goal in the end,” Gibbs said. “We have 5% of our network controlled by retail miners and want to raise it from 10% to 15% in the next few years.”
Gibbs is bringing those dollars into the mining industry instead, as many people who normally invest in real estate can get the mining profits faster than buying a rental property, especially as a private equity fund. He says he noticed that he bought a house and stepped in to raise the price.
Eng Taing evaluates the former GM plant for reuse in Bitcoin mining.
Compass clients from the self-proclaimed “plebs” that stacks the minimum amount of Bitcoin known as satoshis or “sats” Billionaire bitcoiner Jack Dorsey.
One of those pourvous is Jon McClellan, AT & T’s Texas-based lobbyist. He currently has a Bitcoin miner with a compass in Oklahoma, which he purchased at the end of 2020. For him, the desire to mine is partly ideological and partly economical.
“I wanted to play my part in protecting the Bitcoin network. I have my own hash rate,” McClellan said, a collective computing of miners around the world. Mentioned the share of ing ability.
“If I buy a miner, I knew that I would literally buy Bitcoin every day, every minute, every second, every hour, no matter what was happening in my life, on a budget.” McClellan continued, “an easy way to dollar the cost average to Bitcoin.”
According to McClellan, the compass was the only retail mining company that the average person would have access to. Compass Mining allows customers to buy (new or used) mining machines. Between $ 4,500 and $ 25,800 Then place them on your website in your partner’s data center for physical logistics and subsequent maintenance.
Return on investment in private mining includes the initial cost to buy gear, the number of mining machines in operation, the cost of electricity and hosting, and the power of one miner to hash them to thousands of others around the world. Combine with human miners to increase your chances of earning Bitcoin.
McClellan, who borrowed a Bitcoin-backed $ 10,000 loan at an interest rate of 8% through Coinbase to buy a single miner, says his ROI is about two years. He’s currently pulling in about $ 400 a month, but he’s earning about $ 250 because he has to pay $ 150 for hosting. However, McClellan plans to expand its business in Texas, Oklahoma, or Wyoming this year. This is because all three states have an advantage in the Bitcoin mining industry.
Taing says it takes about 18 months to achieve a ROI with a rate of return of about 65% to 70% to cover operating costs. However, unlike other customers, Taing offers a special 0% rate on pool rates through Foundry.
Gibbs, CEO of Compass, defines the customer base as a miner whose customer base is primarily retail, buying one to five machines and investing in the range of $ 10,000 to $ 50,000.
“This is where most of our business has been going on for the past six months,” Gibbs said, but says Compass is starting to serve more institutional investors.
For example, Nevin Bannister wants to use Compass to build a large-scale Bitcoin mining operation and bring it to the open market.
“They make it really easy,” Banister said. “They are great turnkey options. They help you buy machines, connect them for you and they keep all the operations.”
To date, Banister has purchased 6,000 rigs, of which 1,500 are in operation. Most are in Oklahoma, less than 100 in Canada.
Banister didn’t reveal his monthly income, but he told CNBC that each rig should produce about .015 Bitcoins a month. A 1,500 rig will virtually generate 270 Bitcoins a year, or $ 10.7 million.
“I’m a serial entrepreneur. I’ve sold some companies. I love learning new things,” Bannister continued, on the LinkedIn page, worth more than $ 800 million in total. “It’s like entering the early Internet.”
Ultimately, Gibbs is a small miner laborer because institutional investors like Banister help their investment reduce overall costs and make more space available to retail customers. I think it will be good for people.
Bitcoin mining setup for Eng Taing, a compass mining customer.
Jack Dorsey’s payment company block (Former Square) We also aim to make it easier for little guys to start mining Bitcoin...
In a series of tweets earlier this year, Block’s general manager of hardware, Thomas Templeton, presented the company’s plans for the next step.
According to Templeton, the goal is to make Bitcoin mining (the process of creating new Bitcoins by solving increasingly complex computational problems) more decentralized in all aspects, from purchase to setup, maintenance and mining. To be efficient.
To that end, the company is solving one of the barriers to entry. It means that mining rigs can be difficult, expensive and unpredictable deliveries. Brock says he is open to creating new ASICs, which are special gears used in Bitcoin mining.
Bitcoin mining setup for Eng Taing, a compass mining customer.
Templeton writes that Block is also working to improve mining reliability and the user experience.
“The most common problems we hear about today’s systems are heat dissipation and dust. They also stop working almost every day and require a time-consuming reboot. We want to build something that works well.” Tweeted Templeton. “It’s also so noisy that it’s too loud for home use.”
Democratizing access to Bitcoin mining is a big part of the project’s mission statement.
“The mining industry isn’t available to everyone,” Dorsey wrote in October. first time Never before as the number one destination in the world for Bitcoin miners. “Bitcoin mining should be as easy as connecting a rig to a power source. Today, there is not enough incentive for individuals to overcome the complexity of running miners themselves.”
Gibbs says he welcomes another player to the retail Bitcoin mining space.
“It will be very beneficial to Bitcoin and ultimately to us,” Gibbs told CNBC.
“My understanding of what they are putting out will be a more home-based, lower power consumption, perhaps lower yield product, but it will give people the first taste of Bitcoin mining.” Gibbs continued. He assumes that as an individual gets a bug and raises the hash rate, he will look into the compass or rival River Financial to expand his business.
“In line with Jack’s mission in general, I really think he wants a mass adoption of Bitcoin. He’s a dollar behind what he thinks more people will pay attention to it. I’m going to throw, “Gibbs said.