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With Bitcoin and other virtual coins reaching all time highs, the general public has been getting more and more interested in mining.

In general, however, it is a very costly endeavor.

First you have to pay for the mining rig, then you have mining pool fees, and then you have to pay for the massive amounts of electricity you use each month.

In most cases people can make very little from running Bitcoin mining rigs unless they live in a place where electricity is very cheap or they only do it when the price of Bitcoin is very high. Like it is now.

Apart from the upfront cost for the equipment, the monthly utility bill is the biggest drain on mining profits...

What if we could find a way to take the monthly electricity expense out of the equation?

That is precisely what solar powered mining rigs aim to do.

So far, mining operations that use solar panels are finding that it is a good investment. Sort of. There is a large upfront cost but once that is paid for, the cost of mining is "virtually" free. (as you know nothing in life is free and there are still mining pool fees)

Either way, in most cases the biggest hurdle to mining profitably is the large electricity bill each month. This method hopes to navigate around it.

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I recently read about a miner out in the desert doing this profitably.

The desert miner's operation has been running for almost a year and currently uses 25 computing rigs. Each rig cost about $8,000 to set up.

More about him specifically can be read here:

https://themerkle.com/will-mining-cryptocurrency-in-the-desert-using-solar-power-make-you-rich/

His start up costs might be more than most can stomach, but perhaps they can be emulated on a smaller scale?

That costs mentioned include the solar panels, power controls, batteries, and the Antminer S9 ASIC processor.

Doing some quick calculations we can see that he spent $8000 x 25 rigs(there wasn't any mention of mining pool fees in the article) for a total of $200,000.

Quite a large chunk of change.

How profitable is it?

According to the miner, each rig brings in roughly $18 per day, varying slightly depending on the price of Bitcoin each day.

Again, doing some quick calculations we can see that $18 x 25 = $450 dollars per day. With 365 days in a year we can see that $450 x 365 = $164,250 per year in income.

Therefore the miner can expect to pay for his entire investment in roughly 1 and a quarter years, or about 15 months. Not ideal but it appears our miner is playing the long game here. Everything earned after break even is mostly profits with this method.

However there are some major caveats...

He has mining pool fees that are not mentioned here.
He has to keep the equipment cool somehow, likely housing them in some form of shelter while also keeping them cool.
The price of Bitcoin needs to remain high. Likely over that $2000 number. The lower it drops the longer it will take for him to break even on his investment.

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Given all of this, the desert miner has major plans for expansion.

The desert miner claims that he is thinking of adding roughly 1000 more solar powered mining rigs because of how successful he views it has been on a smaller scale.

He stated that he needs Bitcoin to stay above $2,000 per coin to remain profitable, however, if all the costs are upfront I am not sure what he means by that...

It looks like no matter what it could be profitable, it just will take more and more time to reach profitability depending on how low Bitcoin were to fall.

Conversely it would happen much faster if Bitcoin were to rise in price.

Also failed to be mentioned by the miner in the article, but there is the worry that the computer equipment could get too hot out there in the desert.

So, while the solar panels will do fine in the heat, some of the other equipment not so much. Perhaps some of that power being generated will have to be used to power a fan to cool some of the equipment?

Either way it sounds like a very interesting idea and one I am looking into further living out here in the desert myself.

Stay informed my friends!

Sources:

https://themerkle.com/this-solar-mill-powers-a-small-bitcoin-mining-operation/

http://www.investopedia.com/news/solarpowered-cryptocurrency-mining-next-big-thing/

Image Sources:

https://blog.cex.io/cryptonews/solar-bitcoin-mining-1841

https://themerkle.com/this-solar-mill-powers-a-small-bitcoin-mining-operation/

https://themerkle.com/will-mining-cryptocurrency-in-the-desert-using-solar-power-make-you-rich/

Follow me: @jrcornel