Bitcoin Mining FAQ

What makes a Bitcoin miner good?

Bitcoin miners are rated by efficiency using a metric called watts/terahash. This is comparing the amount of power being consumed vs. the processing speed of the computer. Below is a list of popular miners available for purchase and their associated W/TH rating.

  • S19 Pro - 30 w/th
  • S19 - 34 w/th
  • Whatsminer M30S - 38 w/th
What is the lifespan of a Bitcoin miner?
Bitcoin miners typically last 4-5 years with proper maintenance. Long-term profitability depends greatly on your power rate. For example, from 2016 to 2020 the industry standard machine was the Bitmain S9 Antminer - this machine was recently replaced by the Bitmain S19 Pro Antminer and became unprofitable for most. However, top efficiency miners are still able to profitably operate S9 miners, an almost 5-year old server.
Do Bitcoin miners hold their resale value?

In mid-2017, S9 bitcoin miners were purchased for an average of $2000. At the end of 2017, these same machines were sold for an average of $6,500 - an increase of 325%.

We call this increased demand and profitability “The Supply Gap” wherein fabricators can not keep up with the demand for hashrate. This presents an opportunity to offload hashrate into the market at very healthy markups.

How do you calculate Bitcoin mining profitability?

We commonly get the question, “how does the bitcoin price affect mining profitability”? While it does have an impact, it is not the only driver. This can be best understood by the fact that Bitcoin has fluctuated at $10k per coin since 2018, yet mining profitability has changed drastically. This is due to the other part of the formula changing, network difficulty. The Bitcoin price + network difficulty gives us the metric USD/Terahash which is how we analyze mining profitability.

What principles does Aurum utilize to analyze the mining market and assess when to sell vs hold hashrate?

Aurum utilizes two core principles in order to properly assess the Bitcoin mining market and begin liquidating hashrate.

  1. USD/Th
  2. Bitcoin power oscillator
How quickly do Bitcoin miners arrive after ordering?

Aurum has the ability to pay a higher USD/Th price to receive miners within a 2-3 week timeframe after payment has been made. Additionally, miners are released in batches allowing us to secure an order (with 100% upfront payment) for a specific delivery date.

What are the payment terms for Bitcoin miners?
Currently, mining manufacturers do not offer any form of payment terms. 100% of payment is required upon purchase. The only exception we have seen to this is when placing a large order with Bitmain you’re able to put 20% down to secure the batch and the final 80% before they ship.
How are Bitcoin miners priced?
Bitcoin miners are priced based on demand and profitability. Pricing changes every 48-hours but availability can change quicker than that. Having funds in hand is crucial to order miners. Aurum has spent four years developing our relationships with verified resellers ensuring a safe and efficient purchasing process.
How liquid is the Bitcoin market?
Bitcoin trades 365 24/7. Bitcoin's daily volume has routinely exceeded $20B in 2020.
How secure is coin custody?
Coin custody has been a major focus of the industry for the past two to three years. Major institutions such as Fidelity have put serious resources behind this to ensure security for institutional clients. Aurum has partnered with Tagmoi, a company underneath the umbrella of a US-based company, Coinbase.
Is there a futures market for Bitcoin?

Yes, there is. The CME Group and Bakkt offer Bitcoin futures trading. Daily volume is at an ATH.

Is there a futures market for Bitcoin?

Yes, there is. The CME Group and Bakkt offer Bitcoin futures trading. Daily volume is at an ATH.

Common Industry Terms

BTC
This is the acronym for Bitcoin. The largest cryptocurrency in the world with only 21 million coins minted through the mining process over the next 100 years.
MINING

The process of verifying cryptocurrency transactions which are then added to the blockchain ledger.

NETWORK DIFFICULTY
How many machines are working in one network – the more the machines, the higher the difficulty of finding new blocks.
BLOCK REWARD
A way of encouraging the miner who successfully verifies a block. The verification of blockchain transactions creates new coins, where a portion of that amount is collected by the miner as a reward. The current block reward is 6.25 BTC
MINING POOL
A group of miners who have combined their computing power to increase their chances of mining a block. The reward is split proportionally between the participants in the mining pool depending on the amount of power they contributed.
PROOF OF WORK (PoW)
A concept allowing people to verify transactions according to the computing power they put into solving algorithmic problems – adding a new block to the Blockchain.
Kilowatt
A unit to quantify power. Higher units are megawatts (or MW) and gigawatts (or GW)—equivalent to 1,000 kW and a million kW, respectively.
Kilowatt-hour (kWh)
A unit used to measure energy. The equipment uses up to one kW if it's used for an hour.
Megawatt (MW)
A unit of power equal to one million watts, especially as a measure of the output of a power station.
Megawatt-hour (MWh)
1 MW for one hour or 1,000 kW for one hour. That's the same as using 1 kW (or an average microwave) for 1,000 hours, which is about 40 days.
ASIC
The Application-Specific Integrated Circuit is mining hardware specially created to mine Bitcoin.
FPGA
Field-programmable gate array – a special computer, which can be modified to mine different algorithms.
FULL NODE
A computer that keeps the entire blockchain’s history, and thus supporting the network by proving the accuracy of the transactions.
HASH RATE
The calculating power of a device measured in hashes per second. Each hash rate is a created block that is tested against the network.
Terrahash (TH)
A terahash is 1 000 000 000 000 hashes. Terahashes are a measurement for cryptocurrency validation and mining. Mining machines range from 13TH-110TH
Petahash (PH)

A petahash is 1,000 THs of hashing power.

W/TH
The number of watts required to produce one TH of hashing power. This is the power efficiency metric associated with mining machines.
USD/TH per Day

The number of dollars one Terrahash earns per day. Calculated daily by the bitcoin network.

TRANSACTION FEE
An amount paid to the miners for successfully projecting a transaction on the blockchain. It varies depending on the difficulty and overall network capabilities at that moment. If an exchange is involved it could also take some of the overall transaction fees.
51% Attack
This refers to an attack on a blockchain by parties that control 51% or more of the network's hashrate. With a majority of the hashrate, attackers have the ability to reverse their own transactions and double-spend coins. They can also block the confirmation of transactions.
WALLET
Software program or a piece of hardware holding pairs of codes (public and private keys), which you use to access the blockchain, where your cryptocurrencies are. A cryptocurrency wallet allows you to send/receive crypto coins and monitor their balance.
WALLET ADDRESS
Unique identifiers for each specific wallet. They are generated with the help of an algorithm. They are also referred to as a hashed public or private key