Demystifying Bitcoin Mining: My S21 Pro Hosting Experience

I started mining. I am writing an article that will feature continuous updates to provide followers with a transparent look into the experience of purchasing and hosting a miner. The primary aim of this article is to serve as an educational resource, offering insights into the entire process. It also serves as a template for people to copy.

Let’s go!

I recently purchased a mining machine to have skin in the game and to offer a firsthand, transparent look into the mining process. This decision allows me to provide real data from an actual miner running, rather than relying solely on theoretical or second-hand information. By sharing this journey, I will demonstrate the full scope of owning and operating a miner, from setup and performance monitoring to potential challenges and outcomes. My goal is to showcase the technical aspects and track the financial side, including electricity costs, maintenance, and any fluctuations in profitability. There is a genuine opportunity to end up with more BTC by mining rather than purchasing it outright, and this article will document whether that theory holds over time. Ultimately, I want to help others make informed decisions by sharing both the successes and setbacks of my own experience.

I provide consultancy, education, brokerage, and procurement services within the mining industry. I leverage a strong network of suppliers and a deep understanding of what to look for in a reliable hosting provider. While I plan to write a more comprehensive article on the key considerations for hosting your mining machine, I will outline some of the most important points here and briefly explain each.

The primary focus of this article, however, is to offer continuous operational and financial updates on the machine I recently purchased. This will include key metrics such as revenue, costs, and profit margins over time. My main financial goal is to achieve a return on investment (ROI) in BTC terms as quickly as possible. My thesis is that BTC-denominated profits will increase over time, especially as I anticipate the BTC/USD price to rise. If this happens, the monthly hosting fees, typically charged in USD, would become relatively cheaper in BTC terms, further improving the profitability of the mining operation.

The ASIC Seller

I chose my machine reseller based on several key factors, beginning with the strong relationship we’ve developed over time. I’ve personally visited them in Shenzhen, and the face-to-face interaction has built a high level of trust. Their competitive pricing was another deciding factor, but equally important was my confidence in their ability to deliver quickly and reliably. "Time to hash"—the speed at which the machine can start hashing after purchase—is crucial when considering hosting, and I trust this reseller to ensure that the machine will be up and running as soon as possible. Their proven shipping process gives me peace of mind that there will be no delays in starting my mining operation.

The ASIC

The base case for this project is to keep the Bitmain Antminer S21 Pro running for 24 months, after which I plan to sell it on the secondary market. I’m assuming the machine will retain at least 50% of its purchasing value in BTC terms, with ASIC prices likely following Hashprice increases over time. I’ll be benchmarking actual developments against these assumptions to see how they hold up in the real world. Based on an average hashprice of approximately 69,000 sats per PH per day, I’m forecasting to generate around 12,000,000 sats (0.12 BTC) in revenue over the next 24 months.

The reason I chose the Bitmain S21 Pro, with its 234 TH/s capacity, is that I believe it offers the best balance between efficiency and cost. Additionally, I expect it to hold its resale value well even after two years, making it a solid long-term investment in terms of both performance and potential resale.

Moreover, I believe that mining machines, when measured in Bitcoin, are currently highly affordable. This represents an excellent entry point, as for the first time, there’s a large gap between machine pricing and the Bitcoin price. Hashprice has remained relatively low, while the BTC price is elevated, creating a unique opportunity for ASIC buyers to capitalize on this favourable dynamic.

ASIC Price Index serves as a great tool to analyse ASIC pricing. Unfortunately, the data is not available for longer than a year. In the previous version of the website, we could overlay BTC Prices over ASIC prices in USD terms. That functionality made the gap between ASIC Prices and BTC Prices visible and it was the first time the two heavily decoupled.?

Key Assumptions:

Forecast mined BTC over 24 months: 0.12 BTC

Average Hashprice in BTC/PH/Day: 0.00069 BTC

Purchase price of ASIC: 0.071 BTC

Resell Price of ASIC forecast: 0.0355 BTC

Total Revenue after 24 months: 0.05206 BTC

Miners are currently historically cheap in BTC terms, which I believe makes this an excellent entry point for starting my mining operation. In addition to the favourable pricing, I specifically chose a Bitmain machine not only for its efficiency and resale potential but also because the host I’ve selected has extensive experience in repairing Bitmain equipment. This adds an extra layer of confidence in maintaining the machine's uptime and performance over the long term.

The host

The decision to choose my host was based on several key factors that gave me confidence in their ability to operate my machine effectively over the next 24 months. First, they allow payment in BTC with low fees, which aligns perfectly with my financial strategy and minimizes unnecessary costs. I also made sure they were vetted and had a proven track record of great historic performance, ensuring reliability and operational excellence.

Their communication has been consistently strong, which is crucial when managing something as hands-on as mining. They offer Foreman Access, which gives me visibility and control over the mining process, along with precision billing, ensuring that I am only charged for what I use. Precision billing also offers me the flexibility of over and underclocking the machine. Should profits be high during a period, I may choose to overclock the machine to produce extra hashrate. That will increase the power bill, but increase revenue even more. Lastly, their short response times ensure that any issues with the machine are addressed quickly, minimizing downtime and helping me stay on track to meet my revenue goals. This combination of factors made them the ideal choice for hosting my miner.

Any host that I refer clients to has to offer Foreman access. Checks & Balances and accountability through transparency are the main drivers of that. It motivated the host to make sure communication was clear and swift. Foreman access supercharges your education around mining since you can monitor details such as fan speeds and temperature sensors to make sure your machine is running as it should.

When deciding where to host a Bitcoin miner, the first choice isn't just the hosting provider—it’s the country where you want to send the machine. Many countries may offer more attractive electricity prices than what we see in the USA, but I believe the Risk/Reward ratio in the US is still the best for retail hosting. One key advantage is having access to the machine and the ability to resell it into a liquid market after the hosting contract ends, which I think the US market supports better than others.

While I could pay less per kWh in other countries, in most cases I would have to buy the machine directly from the host, paying inflated margins. In my experience, the likelihood of issues arising during the two-year term is elevated outside of the USA. These factors led me to choose a host in Kansas, where I’m charged $0.0775 per kWh, or roughly $200 per month for my Bitmain S21 Pro. This setup balances cost, reliability, and long-term flexibility, making it a solid choice for my operation.

The Pool:

Choosing the right mining pool for my experiment was a key decision and a challenging one. Initially, I considered four options: Luxor Technology Pool, Braiins Pool, Wilson Mining Pool, and OCEAN . For the beginning of this project, I decided to go with Wilson Pool, a lesser-known option set up by "Wilson Mining." Their goal is to decentralize FPPS hashrate by using SBI Crypto as their underlying pool. Wilson offers a stripped-down service without any extra features, but in exchange, they provide incredibly low fees of .38% — typically only available to larger mining operations that can negotiate lower rates.

For clients I advise, I often recommend starting with Luxor Pool or Braiins. While their fees are higher, they offer a robust dashboard with features like split payments, watcher links, and historic graphs, which help monitor operations. Wilson doesn’t have these features, but with my focus on maximizing revenue and having access to Foreman, I chose them as my primary pool.

That said, I am also considering OCEAN pool. I believe their payout model may outperform FPPS pools, and since I don’t rely on frequent payouts for this experiment, exploring OCEAN’s potential is an appealing option for the future.

That concludes the introduction. Every month, I’ll review recent developments, performance, and financials to provide a transparent overview. Please comment with any questions you have below. I will update this article as often as possible to answer frequently asked questions.

Update 1: September ‘24

I paid for my Bitmain S21 Pro on September 21, 2024, and it arrived on Wednesday, September 30th. Before the machine arrived, I spent a deposit covering two months of electricity costs, signed a contract and provided my pool information for the initial setup. The machine was set up and went online by the following Sunday, marking the beginning of tracking its performance over time. Notably, this timeline—10 working days from purchase to first hash—is longer than what I’ve typically experienced in projects with clients. As I move forward, I’ll continue to assess the machine's output and the financial metrics to ensure the operation is running optimally.

ASIC Price including shipping to the USA by Air: 0.071 BTC / $4,485

Deposit payment 2 months: 0.0062 BTC / $391.80

Find some actual footage of the machine we are covering in the article!

Update 2: October '24,

In this monthly update, I’ll review the key metrics of the mining operation, including Revenue, Cost, and Profits, all presented in BTC and USD terms. I’ll also provide a current Break-Even Calculation and share notable developments.

Key Events

• Miner Installation and Setup: The Bitmain S21 Pro was installed and went online, with the first full day of mining recorded on 02.10.2024.
• Foreman Access Activated: I now have Foreman access, allowing me to monitor hash rate fluctuations and other key metrics in real-time.
• BTC Payments: I completed the initial deposit and paid for the first month’s hosting cost entirely in Bitcoin, keeping costs streamlined.
• Pondering Pool Switch: While I’m still mining with Wilson Pool, I’m considering switching to OCEAN pool, as its payout model may offer better returns. For now, I’ll keep it on Wilson and monitor the results.

Revenue

For October, the miner has generated approximately:

• 426234 Sats: This is the total mined in BTC terms, reflecting Wilson Pool’s low-fee structure.
• $282.14: Based on the current BTC/USD exchange rate, this month’s revenue totals approximately $282.14.

Costs

Electricity and Hosting:

• $195.60: My Kansas host charges a competitive $0.0775/kWh, translating to roughly 0.002862 this month.

Profits

• Net Profit in BTC: 0.00140076
• Net Profit in USD: $86.24

Break-Even Calculation

I’ll continue tracking revenue against my initial machine cost and ongoing expenses to break even. The current Break-Even progress stands at 2% in BTC and 4.4% in USD

Hashrate History

Here’s a snapshot of the Hashrate History from Foreman, showing production stability.

Pool Performance

A recent snapshot from Wilson Pool provides insights into the mining operation’s payout consistency and overall pool performance.

This update is part of my ongoing effort to provide transparent insights into the mining operation. For the next update, I’ll continue monitoring revenue, costs, and profit and consider any potential improvements, such as a pool switch to OCEAN, if they prove beneficial.

Update 3: November '24

My hosting cost decreases in BTC terms when the BTC Price increases. The machine is running super smoothly without hiccups. With the current developments around Bitmain Machines in the USA, my machine likely increased in value. I will change the pool to OCEAN pool from next year onwards. I love the simplicity around the Wilson pool however and the fact that I am only paying 0.38% in Fees.

Here are some numbers!

Revenue:

Since 04th November:

406.303 sats and at the time of payout: $391,48

Cost

204.478 sats and at the time of settlement: $195,92. Above I paid two invoices in November, so the cost for that month is double roughly.

Profit Month

201.825 sats and in Dollar terms: 195,56

Profit Total

0.00164561 BTC, or $162.21

Update 4: December '24

Revenue:

808.986 sats and at the time of payout: $763,23

Cost

205.700 sats and at the time of settlement: $196,44.

Profit Month

603.300 sats and in Dollar terms: $566,79.

Profit Total

0.00361569 BTC, or $337,52

Breakeven of the Miner in BTC Terms: 5%

Breakeven of the Miner in USD Terms: 7,53%

The plan is to switch to OCEAN Pool after the next payout, so no sats are pending on the Wilson Pool custodial wallet. There were two Outages in December. Upon some investigation, however, it turned out that it was only a period of updates of the Foreman server and I could verify on Wilson pool that the Miner continued to hash. So far Uptime is 100%, which is fantastic.

Update 5: January '25

Revenue:

813,319 sats and at the time of payout: $793.09

Cost

191,922 sats and at the time of settlement: $195.90.

Profit

621397 sats and in Dollar terms: $597.19.

Profit Total

0.00985806 BTC, or $934.72

Breakeven of the Miner in BTC Terms: 13.88%

Breakeven of the Miner in USD Terms: 21.87%

I waited until the payout from Wilson Pool was completed and have now moved the miner over to OCEAN Pool.

Update 6: February '25

Revenue:

Switch to OCEAN pool also means higher payout thresholds. So no revenue has been settled into my own wallet yet. Revenue below is revenue not yet paid out.

0.00372449 BTC value at the time of writing: $340.80

Cost

0.00213687 sats and at the time of settlement, $195.90.

Profit

-0.00213687 sats and in Dollar terms: -$195.90.

Profit Total

0.00772119 BTC, or $1,176.70

Breakeven of the Miner in BTC Terms: 10.87%

Breakeven of the Miner in USD Terms: 16.47%

Here are some statistics from my Dashboard. You will note there were some hiccups. Network outages at the datacenter was quickly resolved with the host's clear communication.