It each started with mining Bitcoin (BTC) successful a dorm room. What started arsenic a hobby with a fewer mining rigs scaled into 20 industry-scale mining farms crossed the globe. Because we scaled our operations successful a caller industry, we had to observe what worked and what didn’t done proceedings and mistake — due to the fact that there’s nary handbook for this.
Building a multi-site, scaled cognition similar ours isn’t easy, but if you’re looking to commencement your mining operations, standard what you have, oregon put successful a mining company, present are the 7 biggest lessons we learned to assistance you navigate your adjacent moves.
Lesson 1: It takes (a batch of) wealth to marque money
There was a clip erstwhile you could excavation Bitcoin from a laptop, oregon acceptable up immoderate mining rigs successful your country and mine, profitably. But erstwhile much miners created much contention and those who wanted to enactment profitable had to standard their operations.
Soon a hobby miner couldn't support up with mining successful a dorm country but needed a warehouse — oregon warehouses — afloat of mining rigs moving time and nighttime to enactment profitable. We scaled with the manufacture and bootstrapped our maturation arsenic we went, but those wanting to articulation contiguous nary longer person the enactment of starting astatine the bottommost and moving their mode up. That means investing successful capital-intensive projects from the get-go.
Lesson 2: Establish semipermanent relationships
While the Bitcoin mining manufacture has been increasing quickly, it's inactive precise overmuch consolidated with lone a fewer cardinal players holding the power. For example, a large-scale mining cognition can’t simply conscionable bid caller hardware from immoderate vendor they want.
There are lone a fewer vendors supplying hardware astatine this point, and their accumulation cycles are based connected conscionable a fewer spot manufacturers who are tightly controlling the proviso — not to notation that we’re presently successful a planetary spot shortage. This means that occurrence relies not conscionable connected businesslike and well-run operations but connected gathering relationships successful the industry, galore of which volition beryllium for the agelong term.
Lesson 3: Obsess implicit operational efficiency
Speaking of operational efficiency, large-scale miners enactment profitable erstwhile they person the borderline implicit their competitors. This means optimizing electricity, having the astir up-to-date hardware, and not having immoderate downtime oregon issues that would origin a nonaccomplishment of computing power.
Make operational ratio a priority. For example, successful March 2020, erstwhile Bitcoin dropped beneath $4,000, galore miners couldn't past the uncertainty and volatility, and were forced retired — yet we survived owed to our operational efficiency.
Lesson 4: Never halt innovating
The adage is "innovate oregon die." In Bitcoin mining, wherever information centers person to enactment almighty and accelerated to enactment profitable, there's nary enactment but to support innovating. Most importantly, this means keeping your instrumentality updated and not letting it get obsolete. Mining operations request to program up to regenerate instrumentality and clip it correctly arsenic hardware whitethorn beryllium connected backorder for a while. Remember that immoderate benignant of downtime volition outgo you.
Innovation besides means creating better, much businesslike ways for your institution to run, similar creating bundle programs specifically designed for mining operations management. In this industry, exertion volition springiness you the edge, and adjacent the smallest betterment volition support you up of your competition.
Lesson 5: Choose your determination wisely
"Location, location, location," they say. Even though Bitcoin tin beryllium mined anywhere, large-scale mining operations request to see their determination erstwhile mounting up store for a assortment of reasons. Not each locations volition connection the aforesaid sources of energy for the aforesaid prices, truthful miners request to find locations that not lone person abundant, inexpensive energy but to guarantee that that energy is greenish and sustainable arsenic well.
Finally, spell to a determination that's encouraging of Bitcoin miners, where you cognize governmental winds won't displacement overnight and unopen down each operations volition beryllium unopen down, similar they were precocious successful China and Iran.
Lesson 6: Time is money
I've said it already, but clip truly is money, and immoderate downtime oregon lag successful computing powerfulness tin beryllium costly. This means having large operational power implicit hardware upgrades, a program for serving mining rigs, and bundle that tin negociate operations efficiently. It besides means getting creative: In 2015, we knew that having to hold months for mining hardware shipments was going to chopped into our revenue. So we rented 747s to get the machines to america quicker, which allowed america to make millions successful other gross that would've been mislaid owed to modular shipping.
These are the types of calculated moves you person to not lone beryllium consenting to instrumentality but beryllium knowledgeable capable astir your operations to cognize to take.
Lesson 7: Scale is everything
Finally, standard is everything. I said earlier that you tin nary longer commencement astatine the bottommost and enactment your mode up. The contention alternatively is to beryllium arsenic large arsenic you tin due to the fact that standard is straight correlated with revenue: The larger you are, the much nett you make.
The word “bigger, better, faster” truly does use to Bitcoin mining, truthful if you’re not acceptable to strategize, put clip and money, occupation solve, and instrumentality risks, past different manufacture whitethorn beryllium for you.
There are galore much lessons that we've learned, and plentifulness of lessons that we’ll larn successful the years to come. Today, we’ll proceed to physique this caller manufacture that’s already creating a aboriginal of decentralized currency and caller ways to speech worth passim the world.
This nonfiction does not incorporate concern proposal oregon recommendations. Every concern and trading determination involves risk, and readers should behaviour their ain probe erstwhile making a decision.
The views, thoughts and opinions expressed present are the author’s unsocial and bash not needfully bespeak oregon correspond the views and opinions of Cointelegraph.
Marco Streng is the CEO and a co-founder of Genesis Group and Genesis Mining — 1 of the largest crypto mining companies successful the world. Prior to co-founding Genesis successful 2013 and becoming an impassioned advocator for blockchain exertion and cryptocurrencies, Marco studied mathematics astatine the Ludwig-Maximilian University of Munich.