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The Netflix of BTC Mining? Sazmining, Compass Mining Offer Cloud Mining to Subscribers
Bitcoin mining doesn’t have to be accessible only to the technically minded. Some companies are working on making bitcoin mining as easy as setting up a basic streaming subscription.
The business model is called “cloud mining”, a name taken from “cloud computing”. The process is rather simple and requires zero technical knowledge about computers or bitcoin mining.
If you can input a credit card, then you have all the skills you need to start mining bitcoin. The aim of these companies is to further decentralize bitcoin through distributing ownership of mining rigs, and thus hash power.
There are a couple of competitors out there, so let’s take a closer look into each of their offerings.
Sazmining: Mining BTC Made Easy
An emerging company in the cloud bitcoin mining space is Sazmining. They are a company based out of the states that focuses on bitcoin mining with green and renewable energy. Their first facility gets its electricity from a hydroelectric dam in Wisconsin, US. Although they are still in the early days of their business, they’ve demonstrated their commitment to several principles that piques the interest of customers.
Sazmining passes all of their costs onto their customers in exchange for 5% – 15% of the mining returns. At this time, a S19J Pro (100TH/s) can be bought on Sazmining for $2,500 USD. Sazmining maintains that they’re selling rigs to their customers at cost. The idea is that Sazmining only makes money when their customers make money. Giving rigs to their customers for as low a price as possible is fundamental to running a successful business.
Additionally, a monthly cost of $180 per month per rig is required to be paid to cover energy and maintenance costs. At the end of the day, this is no different than setting up a server at Amazon Web Services (AWS) or DigitalOcean, or Google Cloud Services. Somewhere in the world sits the machine that these companies have set up for you to run your web applications.
Sazmining uses the exact same business model, except with bitcoin ASICs (miners). When users receive their mining rewards, they are sent directly to the user’s provided wallet. Sazmining never custody’s the user’s funds which makes a difference for some customers that have a preference for privacy and anonymity.
Compass Mining: Now Everyone Can Mine Bitcoin
Another company in the cloud mining space that has been around for a couple of years, is Compass Mining. They are a well-established cloud bitcoin mining company with more than 20 mining facilities across North America. Miners range from $2,050 on the low end and $9,100 on the high end. Similar to Sazmining, customers pay a monthly fee to cover the electricity and maintenance costs associated with hosting the rig.
Compass touts a range of energy suppliers with many facilities above the 50% green energy mark. Users get the liberty to select which facilities they would like to mine in, as well as which coin they’d like to mine.
Mined coins are deposited into the web-wallet which allows users to deposit, convert, or withdraw funds from the platform. This flexibility allows customers to have their rewards deposited into the wallet to be reinvested, pay electricity costs, or withdrawn.
Is Cloud Bitcoin Mining Worth It?
There are several variables that change whether or not cloud mining is profitable. The two big variables are the price of bitcoin and the global hashrate.
The higher the price of bitcoin, the more profitable mining is in terms of USD. The higher the global hashrate, the lower the amount of BTC you will receive from each miner you own. Ultimately, the profitability of mining ends up being a delicate balance between how much you paid for your miner, how much you pay to run it, the price of BTC, and how many other people are mining bitcoin in the world.
Remember, bitcoin mining is a competitive endeavor between hundreds of thousands of participants worldwide.
A Dollar Cost Average Strategy
One way to think about owning a miner with Compass or Sazmining is that it is a dollar cost average strategy. The monthly energy bill is how much it costs to buy your monthly bitcoin reward. Let’s put some concrete numbers in place to illustrate the profitability, or lack thereof.
According to the braiins mining calculator, 100TH/s will yield approximately 0.28 BTC over the course of 36 months. That is 0.007 BTC per month. At $23,000 per bitcoin, and a $180 monthly cost, that’s a $20 loss every month. However, if bitcoin is sitting at $100k per coin, then that same $180 monthly fee is allowing you to buy $700 worth of BTC per month.
The break-even point would be around $25,000 per Bitcoin.
Final Thoughts on Cloud Mining
Some people say that you’d just be better off buying bitcoin directly, or dollar cost averaging with the money you would have used to buy a mining rig. For many people, cloud bitcoin mining is more hassle and risk than what it is worth.
Bitcoin miners are not very liquid, so once you have them, you have to commit to paying a monthly bill for them. The strategy is to eat the cost while your rewards are worth less than your monthly bill, then potentially sell once bitcoin goes high enough to lock in an appealing return.
On the other hand, some people may enjoy dollar cost averaging into bitcoin on autopilot. The hands-off bitcoin mining strategy is appealing to those who like to set up passive income streams and watch the money stream into their wallets. Regardless of whether you will buy a miner from Sazmining or Compass, the two companies are objectively helping in the global adoption of bitcoin by democratizing access to bitcoin miners. Now, bitcoin mining really is as easy as setting up a Netflix subscription.
