Effective Performance: Maximizing Bitcoin Mining Profitability

The Bitcoin mining industry has traditionally been defined by performance, a term that consists primarily of hashrate and power efficiency. Whether a mining company is successful is almost exclusively a factor of whether they are able to extract maximum hashing from their rigs and whether they are able to do so while consuming as little power as possible.

While this is the key metric, the rated performance of a specific machine is not necessarily reflected in the miner’s overall profitability because many additional factors come into account. For example, two of the most important factors to a mining data center’s bottom line are uptime and operational flexibility.

Especially since the halving event this past April, the added difficulty of mining for Bitcoin has made profitability that much more complex an equation for miners, who must pay close attention to the performance of their entire facility. Hashrate and power efficiency become two variables among many when considering which rigs to buy to constitute the makeup of their data centers.

Therefore, it is necessary to define a metric that measures the hashrate and efficiency after taking into account all the external factors that can adversely affect performance. Such an evaluation would focus on a data center’s effective performance.

Factoring Uptime into Effective Performance

Uptime is easy to understand as a critical factor in the profitability of a data center. Every second that a system is down is an opportunity lost. This has always been a factor for mining companies, but now, mining difficulty has made it such that the poor uptime of the incumbent system providers cannot be ignored.

Among the difficulties that miners face that directly affect uptime are rigs that shut down or malfunction at high ambient temperatures, dead-on-arrival rate, rigs that break down within the first few months of operation, high maintenance response time, and time lost on reboots. An excellent hashrate is highly attractive, but mining companies know that hashrate is meaningless while the mining rig is down.

Thus, by focusing on maintaining uptime, a miner’s effective performance is much greater, and the mining data center is much more profitable.

Adding Efficiency Through Operational Flexibility

Another major factor in today’s mining industry is operational flexibility.  A miner’s ability to design a data center with built-in agility provides them the opportunity to improve hashing density, upgrade existing systems (instead of replacing them), and incorporate custom infrastructure using de facto form factors, without needing to overhaul existing deployments. This introduces efficiency, and therefore new profitability, into the data center, leveraging the unique knowledge and experience that mining companies possess to incorporate out-of-the-box planning to overcome the deficiencies of older generations of miners.

Another aspect of operational flexibility can be applied to curtailment, the highly lucrative practice of selling energy back to the grid at times of peak need.  Curtailment has become a prominent strategy toward adding revenue or offsetting power costs, but it has its downsides. For example, turning on and off miners can reduce their reliability, create imbalance in the data center, and limit the opportunity to participate in more aggressive response-time curtailment programs. But curtailment does not need to be an all-or-nothing proposition. With built-in flexibility in the mining systems, it is possible to take advantage of curtailment opportunities while continuing to hash at a lower rate.

When miners incorporate operational flexibility into their data centers, they maximize their effective performance and significantly enhance their chances at profitability, even in the post-halving era.

Maximize Your Mining

As the rated performance of a mining system in terms of hashrate and power efficiency does not reflect the data center’s ability to turn a profit, large-scale bitcoin miners seek mining solutions that emphasize effective performance.

For example, Chain Reaction’s EL3CTRUM Bitcoin miner is designed to address the factors that maximize effective mining performance. EL3CTRUM was conceived based on input and guidance from miners, with a focus on optimizing reliability and resilience toward enhancing uptime, and introducing operational and data center design flexibility by offering ASICs, hashboards, and systems. The result is improved profitability and reduced total cost of ownership.

There is a lot more to surviving in today’s market than just buying the rigs with the highest hashrate and lowest power efficiency. In today’s fast-paced, competitive mining industry, the most successful miners are those who use their expertise and experience to take a holistic view of their mining operations, and who ensure that maximum uptime and flexibility are factors toward optimizing the effective performance of their data centers.