It’s a common misconception for those outside of the cryptocurrency space to think that scale is the most important factor in running a profitable cryptocurrency mine. While this may be true in other industries, cryptominers must focus on efficiency in order to be profitable and competitive in the long term, especially if the higher processing power comes at a high cost. In mining, running the biggest facility doesn’t necessarily equate to the biggest profits, however increased efficiency has a direct correlation with increased profits.
At Sazmining, we know efficiencies can be gained in many ways. Mining design and energy costs tend to have the greatest impact on the efficiency of a cryptocurrency mine. Our team at Sazmining has more than 26 years of combined experience encompassing every aspect of cryptocurrency mining including, electrical distribution design, investor relations, and custom ASIC firmware.
When it comes to keeping energy costs low, we have extensive experience working with energy providers to find favorably priced energy in a way that benefits both the mining operation and the energy company. Strong working knowledge of the energy sector and how energy companies earn profits is critical to creating and maintaining favorable power procurement contracts in the energy sector.
For example, a miner who is paying a fixed 5 cents per kilowatt hour (KWh) has a much lower break even point than a miner who is paying 10 cents. As the following graph illustrates, the higher the energy expense, the more revenue is needed to just break even, let alone earn a profit. Sazmining’s expertise in negotiating energy rates helps keep the break even point lower, which results in a higher potential for profits.
Miners must also look within the design of their mines for opportunities to gain efficiencies. Gaining efficiency in a cryptocurrency mine is not just about cutting costs. In fact, simple cost-cutting can actually be detrimental to the…