$46k Spent on Bitcoin Mining Hardware: The Final Reckoning

Dario Di Pardo (@scurlock_jg) | Published on July 27, 2014 at 16:55 BST

In the two previous articles of this series, Dario Di Pardo listed the highs and lows of having spent many thousands of dollars on pre-ordered bitcoin mining hardware and then having to endure delays, poor communication and broken promises, as some of the companies failed to provide the promised equipment in time.
In this last part of the series (see one and two here), Di Pardo tells CoinDesk which companies finally came good on their promises and which left him wishing he’d just spent his bucks on bitcoin. Di Pardo told CoinDesk, if he had one learned one thing from the experience, it was: ¨No more pre-ordering for this guy.¨

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Vendor: Black Arrow
Product: Prospero X-3 (converted to bare chips)
Price including shipping: $4,978
Order date: 18th November 2013
Anticipated shipping date: 24th February 2014
Actual shipment date (chips): 11th July
Delay: 5 months
Status: Converted to ASIC chips
As somewhat anticipated, Black Arrow missed their revised shipment date of 8th May.
According to the company, they have been experiencing issues concerning the miner’s backplane, which are causing almost two months of additional delay.
Black Arrow recently announced the issues to be resolved and that both X-1 and X-3 miner orders would be dispatched by the end of July.
Together with the company’s latest news update, the option to convert pre-ordered miners into bare ASIC chips was provided, implying that each X-3 order could be exchanged for 100 ASIC chips, whereas you would get six chips for an X-1 order.
When a mining company starts offering a miner-for-chips exchange, it might be a good idea to go with the offer, or you could end up with nothing at all, as I learned from my experience with HashFast. With this in mind, together with the now huge delay in shipment and the fact they are not increasing compensation further to match competitors’ prices at shipment time (which they said they would do earlier), I decided to go for the chips.
Obviously, one cannot mine with chips alone. Fortunately, Technobit, a Bulgarian company, would be capable of turning these chips into mining rigs, where each 400 GH/s rig would contain four ASIC chips.
Because Minersource, a mining gear and co-location company as well as Black Arrow’s US-based reseller, organized a group buy for all customers who converted their order into chips, the board assembly at Technobit can now be purchased at a discount. Even more, they managed to provide us a deal where each board assembly can be alternatively paid for with four additional chips.
So with some money on top for chip coolers, controllers and power supplies (controllers and power supplies not necessary when opting for co-location), I would get a 5 TH/s miner with a price tag that matches today’s stock prices, instead of the now overpriced 2 TH/s X-3 miner (excluding the 1 TH/s compensation Black Arrow would send after all current orders have been shipped).
Technobit is currently in the process of assembling all miners for the group buy, which will take about two weeks to complete.
Although none of the X-3 orders have been currently shipped, some X-1 customers are now reporting receiving their hardware.

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Vendor: HashFast
Product: Sierra (1.2 TH/s)
Price including shipping: $6,696
Order date: 18th November 2013
‘Guaranteed’ delivery date: 15th February 2014
Status: Bankruptcy announced 7th June (no product or refund received)
Not surprisingly, HashFast entered bankruptcy under chapter 11 on 7th June.
As a result and most unfortunately, when that ship went down, my money went down along with it.
Because I initially wasn’t included in the list of creditors the company presented to the bankruptcy Trustee (no surprise there either), I filed my claim online through the court’s site.
I can only hope at this point that as a result of the reorganization process, I will get at least some of my money back.

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Vendor: Virtual Mining Corporation (VMC)
Product: Fast-Hash One Platinum Edition (1 TH)
Price including shipping: $6,479
Order date: 24th November 2013
Anticipated shipping date: January 2014
Status: Refunded 23th June
In addition to the Wood Law Firm investigation, Virtual Mining Corporation and its parent company Active Mining Company are now under investigation by the Missouri Secretary of State because the CEO of both companies, Kenneth Slaughter, wasn’t following proper procedures when soliciting investors.
Maybe as a result, shortly after this announcement the company’s website went offline and is now only displaying a refund form intended for former customers.
After applying for my refund using this form, I almost immediately got the order amount transferred to the bitcoin address provided.
Although glad I made it out if this adventure with only some minor remaining health issues, I feel sorry for the many customers still waiting for their money.
If the company will manage to ever get back on its feet, is yet to be seen.

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Vendor: Bitmine
Product: CoinCraft Desk 1 TH/s (+ 0.4 TH/s compensation unit)
Price including shipping: $5,758
Order date: 28th November 2013
Anticipated shipping date: February, week 1
Actual shipping date: 2nd April
Delay: 7 weeks and 2 days
Status: Miners performing well
Bitmine has manufactured some sturdy mining hardware, with both the 1 TH/s Desk and the 0.4 TH/s compensation unit I received hashing continuously and flawlessly for over three months now.
However, because of the delays in shipment of the CoinCraft Desk and CoinCraft Rig that resulted in many disappointed customers, the company is struggling to keep afloat.
Due to the many refund requests which caused a shortage of funds, Bitmine is now postponing further refunds to customers till as far as October, much to the their frustration – a similar situation CoinTerra customers have been facing.
To raise the necessary funds to survive, the company is now offering hosted mining plans and a revised, lower priced 1 TH/s CoinCraft Desk.

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Vendor: KnCMiner
Product: Neptune (converted to 3 TH/s Jupiter)
Price including shipping: $10,175
Order date: 2014-01-07
Anticipated shipping date: Q2 2014
Actual shipping date: April 29th
Delay: None
Status: Miner repaired
The repair process of the seven broken boards was fairly smooth and a few days after sending back to KnCMiner the broken ones, I received new boards – properly packed this time.
The 28nm Jupiter miner I took in exchange for my Neptune order now hashes away steadily at about 3.1 TH/s while consuming around 3,800 watts at the wall, which averages out to about 1.22 W/GH/s.
The new 20nm Neptune miner that has been shipping as of the end of June, hashes at around 3.3 TH/s while only consuming half the power per gigahash than its younger brother does.
Despite the efficiency improvement and the fact that Neptune customers – at least those who took the time to read the offer’s small print – will additionally receive a compensation unit in August, I don’t think I made too big of a deal when converting my order after all, as I got the Jupiter rig two months earlier.

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Vendor: Alpha Technology
Product: Viper (Scrypt) Miner (250 MH/s)
Price excluding shipping: £5,450 ($8,984)
Order date: 2014-01-10
Anticipated shipping date: July 2014
Delay: None
Alpha Technology eventually announced further increasing the performance of both available Scrypt miners, to match competitor products at shipment time.
The 18 MH/s Viper will now be performing at a minimum of 50 MH/s, whereas the 90 MH/s miner will be hashing at a minimum of 250 MH/s.
While approaching the July shipment deadline, the company went awfully quiet.
Whether this will prove to be a positive thing, has yet to be discovered.

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Vendor: CoinTerra
Product: TerraMiner IV 2 TH/s (converted to 2x 1.6 TH/s)
Price including shipping: $7,253
Order date: 2014-01-12
Anticipated shipping date: May 2014
Actual shipping date: 29th May
Delay: ‘None’
Status: Converted to 2x 1.6 TH/s miners
After still not getting any replies to my emails I sent to the CoinTerra support team asking for a (partial) refund, I took a hint from one CoinDesk commenter and decided to call them instead.
The experience turned out to be pretty similar to participating in a telephone game where you’d have to be the 100th caller in order to win a prize, except that you’d probably win said prize sooner than someone from CoinTerra actually answering the phone.
However, when you get a hold of somebody eventually, you realize the company has some great support representatives working there who really care about your case.
But as time IS money in this business, the company really ought to expand its support staff in order to limit customer frustration.
After a long period of mailing and calling back and forth I took the presented offer of getting an additional TerraMiner IV (1.6 TH/s) for an extra $1,000. Additionally, I opted for the cheaper (ground) shipment option instead, to reduce the extra costs.
Getting two miners for a total of $7,000 excluding shipping costs wasn’t the best offer after all, as a few days after I accepted the deal, you could buy a single, now in stock TerraMiner for $3,000.
My pre-order was finally sent out on 29th May, 7 weeks after they began shipping from stock.
After about 10 days of operation one TerraMiner broke down and had to be sent back for repair. As a result, I lost about a month of (precious) mining time from this machine.
To this day, the hashrate of both rigs combined remains unstable, varying between 2.7 and 3.0 TH/s.

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Vendor: Bitmain
Product: AntMiner S3 batch 1
Price including shipping: 0.75 BTC
Order date: 2014-06-30
Anticipated shipping date: 20th July
Actual shipping date: 20th July
Delay: None
Status: Hashing
To discover what all the fuss was about, I decided to order the latest AntMiner from Bitmain.
The S3, a product that has been selling like hotcakes since its release, reaches hashrates up to 441 GH/s while consuming merely 340 watts from the wall.
No surprises, no delays, no tricks, but plain getting what you paid for, as you would expect from any other decent company.
Bitmain even offered compensation in the form of a 10% coupon or seven percent refund, because actual specifications were slightly off initial specifications.
Mining image via Shutterstock

Mining Roundup: Solar-Powered Mining, DVR Malware and the ‘Bitcoin Baron’

Daniel Cawrey (@danielcawrey) | Published on April 6, 2014 at 16:47 BST | Analysis, Mining, News, Prices, Startups, Technology

The price of bitcoin on the CoinDesk Bitcoin Price Index (BPI) has declined in recent weeks on the news that the Internal Revenue Service (IRS) had released complex guidance for digital currency users amid growing uncertainty regarding exchange regulation in China.
In the mining world, these price fluctuations can cause ongoing profitability issues, as miners, hardware manufacturers and price are key factors that impact the difficulty.
The incentive for people to mine varies with the bitcoin price. A high price makes mining attractive and people invest in costly ASIC rigs. The mining manufacturers then ship newer, more powerful units which raise the difficulty and mean more capital expenditure for miners if they want to keep up with the mining Joneses.
Then the price plummets, leaving everyone mining at high difficulty without the ability to cash in their coins at a significant profit.
The mining industry is pretty much held hostage to these realities. Call them bitcoin economic factors, if you will. Now, with that unfortunate news out of the way, let’s see what’s been happening since our last roundup.

The worst bitcoin miner ever

Records television shows well. Mines bitcoin not so well. Source: Engadget

Bitcoin mining in the form of SHA-256 hashing requires serious processing power, and the higher the difficulty, the more power needed. That’s why it seems counterintuitive to create ARM-based bitcoin mining malware.
Sure, recently discovered Linux-based bitcoin mining malware already seems like a bad enough idea, but the concept of ARM processor mining malware that can infect digital video recorders (DVRs) is just downright inefficient.
There is potential for lower-powered chips to mine bitcoin in the future, but that’s only going to happen on smaller nodes of silicon that are using ASICs designed for that specific purpose. Anything else is just going to be a complete nuisance.
Also to be filed under pointless mining malware is the one announced on 25th March, that gets your Android device mining for dogecoins – veeery slooowly.

City-sized electricity bill for miners

Freakonomics recently released a bitcoin podcast that featured venture capitalist Marc Andreessen and Stanford professor Susan Athey.
If anyone ever thought that bitcoin was a resource hog, take this comment from Athey as an idea of how much energy mining might use:
“So it’s just burning a lot of electricity, enough to power many, many homes. I’ve heard estimates as high as 3 million homes could be powered with the electricity that goes to bitcoin mining.”
Athey’s number for bitcoin mining’s electrical consumption is just an estimate, but given ever-increasing network power, it’s likely to end up being far higher than that.
As a result, technologies that can improve the efficiency of miners are going to become highly important, which brings us onto …

Spondoolies Tech now shipping power efficient miners

Spondooliestech Sp10 Dawson, still in the box. Source: Mineforeman

Israel-based manufacturer Spondoolies-Tech has begun shipping units of its new power-efficient miner.
Called the Sp10 Dawson, this rig should produce 2.1 TH/s per kilowatt of energy, claims the company – a figure that Spondoolies-Tech reached by reducing the toggle rate of its 40nm ASICs.
However, Neil Fincham from Mineforman reviewed one of these units and found that the miner hashes at 1.49 TH/s. The SP10 Dawson does draw at less than 1 Watt per gigahash, though – adds up to 1388W while running.
The unit weighs in at 14kg, which gives it the heft of a regular server and means it needs to be housed in a proper rack.

Solar-powered bitcoin mining

The unit has a battery for cloudy days. And those pesky nighttime hours. Source: Solarminer.

Some people try to locate miners in places where there they can find cheap prices for all that power their miners will eat up, but if you don’t want to move to Iceland or the US’s Pacific Northwest, you could opt to go green.
Solarminer is now selling a USB hardware product that the company says uses nothing more than sunlight in order to operate.
The device uses three 150W solar panels and 288Wh LFP batteries to harvest and store energy, and costs $889.
Solarminer customers do have to buy USB miners for the unit’s 16 slots. However, there are a lot of different USB mining options available, and using something like, for example, the BitFury RedFury USB miner you could hash at 40 GH/s from one of these, just with sweet sunlight.

The ‘Bitcoin Baron’

Selling at every single peak. Source: Wired

Wired recently ran a story on a couple of data geeks, Kai Chang and Mary Becica, that took the leaked Mt. Gox data and made a bunch of visualizations from that information. One user that stood out was referred to as the ‘Bitcoin Baron’ – a Mt. Gox exchange trader that mostly sold BTC at the top of every market peak.
The speculation is that the Bitcoin Baron might be a big-time miner, or perhaps a pool operator. Many (but not all) of those who operate large bitcoin mines or pools are hesitant to divulge any information regarding operations. But if this chart is true, it shows that big-time miners are always closely looking to make the best fiat profit that they can.

2.5 TH/s Bitfury Razz

BitFury’s slogan is “Extreme Performance. Source: Bitfurystrikesback

BitFury, a chip manufacturer that claims it powers 20-30% of the bitcoin network, is now selling mining units.
The ecommerce site Bitfurystrikesback is offing the 2.5 TH/s ‘Razz’ unit, which sucks up 3kW of power for its hashing ability.
The Razz costs €7,250, or about $9,947. Interestingly, it is marked as a ‘used’ model, which would logically lead one to assume that BitFury has used these Razz units to mine prior to putting them up for sale.
When CoinDesk asked Bitfurystrikesback’s CEO Niko Punin about the used status of the machines, he offered no comment.
However, Punin did say that there would be another version of the Razz for sale soon with even better specs.

1.2MW, liquid-cooled, bitcoin mining container

Industrial mining evolved. Source: Allied Control

For those inclined to study data centre architecture and design, the concept of the modular container has been considered one of the best ways to pack servers into a small area. Google did it in secret for a while, and then Facebook open-sourced it.
Allied Control, which is a startup partnering with 3M on a special type of cooling fluid, has written a paper on modular bitcoin mining design.
It involves immersion cooling using six 200-240kW flat-rack tanks and is designed so that ASIC boards can be easily swapped when they become obsolete.
Each of these modular units can support a whopping 1.2MW of power. That is a figure that even Allied Control admits would not have seemed fathomable in bitcoin mining a year ago, but has become a harsh reality.
Got a cryptocurrency mining tip for future roundups? Contact us.
Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.
Electrical lines image via Shutterstock

$46k Spent on Mining Hardware: Who Will Deliver the Goods?

Dario Di Pardo (@dariodipardo) | Published on March 31, 2014 at 14:38 BST | Analysis, Cointerra, KnCMiner, Mining, Technology

Manufacturers of digital currency mining equipment have become notorious for their long delays in shipments and poor customer service. But is this general perception actually the case?
In this personal mining hardware roundup, Dario Di Pardo gives us his insight into the world of the frustrated miner, after personally dealing with a number of mining hardware makers over the last five months, and dealing with widely varying levels of delay, customer services and offers of compensation or refund.

Black Arrow

Product: Prospero X-3 (2 TH/s)
Price including shipping: $4,978
Order date: November 18th, 2013
Anticipated shipping date: February 24th, 2014
Expected delay: 2-3 months
After ordering in November and expecting delivery in February, shipping has now been delayed till May 1st due to power consumption issues with Black Arrow’s 28nm ASIC chip.
To compensate for the delay, however, the company offered free cloud hashing power for six months – effectively worth 25% of the purchased hashing power.
Tape-out of the improved chip was completed on February 23rd, and no further issues that could endanger the new shipping date are foreseen.
Customer support has been somewhat slow, but still reasonable.

HashFast

Product: Sierra (1.2 TH/s)
Price including shipping: $6,696
Order date: November 18th, 2013
‘Guaranteed’ delivery date: February 15th, 2014
Expected delay: 2.5 months
In December, a production update was communicated via email. Unfortunately, it also contained the email addresses of all HashFast customers, thus compromising their privacy, as well as mine.
My initial order confirmation gave February 15th as the ‘guaranteed delivery date’ (deliveries after this date entitle buyers to a refund). In January, however, I received an email giving March 31st as the new ‘guaranteed delivery date’. The email came without any complementary information whatsoever.
I received a further email on 28th March concerning shipping updates. Basically in my case (Batch 3), I must accept another month of delay (May shipment) or I can ‘upgrade’ my order to the new Sierra EVO (2 TH/s).
The latter option would also mean later shipment (end of May) and because it will be a kit, I would have to buy my own power supplies.
Ironically enough, people who placed an order for the Sierra EVO (available as of 20th February) will seemingly get theirs before I do, in April, this is despite the fact that I ordered mine three months before them.
Bitcoin refund requests from early customers who paid their order in bitcoins were refused and offered refunds in fiat at USD hardware pricing at the time of purchase instead. According some displeased customers, who are now considering legal action against HashFast, the terms of service clearly stated that orders paid in bitcoins would be refunded with the same amount of bitcoins.
Facing a one-week backlog, their customer support strikes me as questionable: some emails are ignored, while others are answered with generic replies.
No compensation for the delivery delay has been offered at this time.

Virtual Mining Corporation (VMC)

Product: Fast-Hash One Platinum Edition (1 TH/s)
Price including shipping: $6,479
Order date: November 24th, 2013
Anticipated shipping date: January 2014
Delay: 8 months?
Production of VMC’s consumer mining machines is subject to a significant delay, due to underperformance of the 28nm ASIC chip manufactured by eASIC.
According Kenneth E. Slaughter, CEO of VMC, which is a subsidiary of Active Mining Corporation, customers who wish to cancel their pre-order will be refunded in full.
Strangely enough, this delay is not being communicated to the company’s customers, neither by email nor via the website. One can only discover this information by checking the forums.
Considering the delay and lack of communication, I decided to apply for a refund on January 10th.
The only refund method is by cheque, and I received mine about a month after my application. Unfortunately the cheque came with a misspelling in my name, so that cashing it in was impossible.
The cheque was sent back with an accompanying letter clearly stating the correct spelling of the recipient’s name, just to be sure.
However, mid-March a new cheque arrived containing the same misspelling and, this time, it wasn’t signed either. At this point I started to wonder whether these errors were being done on purpose to delay the refund.
Declining my request to have the funds wired to my bank account instead, VMC will now be sending a third cheque (after receiving the unsigned one back from me).
So, maybe with some luck, some four to five months after applying for a refund, I will actually get my money back.
Despite all this, their customer service team has pretty good response times to email inquiries.

Bitmine

Product: CoinCraft Desk (1 TH/s)
Price including shipping: $5,758
Order date: November 28th, 2013
Anticipated shipping date: February (week 1)
Expected delay: 2.5 to 3 months

After a three months’ delay, Bitmine began shipping their first CoinCraft Desk units on the 12th of February.
According to CEO Giorgio Massarotto, exactly one month thereafter, about 250 units were delivered, which would average out at a production capacity of 12 units a day.
Some customers have claimed the slow production rate is due to a deal Bitmine made with PETA-MINE, allowing them to cut in front of the delivery queue, causing extra delay for ordinary customers. This has not been confirmed, however.
In addition, Bitmine is currently experiencing a shortage of 1300W power supplies, which are needed for a fully populated (1 TH/s) CoinCraft Desk. Also a result of the PETA-MINE deal, according to some commenters.
Early recipients of the hardware have also reported that the Desk’s ‘turbo mode’ doesn’t work as advertised. For a 1 TH/s Desk ‘turbo mode’ would allow hash rates up to 1.5 TH/s. In reality it doesn’t even come close to that number, they said.
Those who have ordered a CoinCraft Rig unit will have to cope with yet more delay, in the sense that shipment of these units has yet to be started. A recently published news update on the company website says this is expected in early April.
To compensate for the delay, Bitmine has a customer protection plan in place, which the company says consists of the following:

1) Shipment can be late up to a maximum of 10 days from the agreed shipment date.
2) For each subsequent 10 days of late shipping, we will add for free 10% more hashing power to your order as penalty.
3) After the 61st day of late shipment, you have the right to request a full refund and we will pay you an additional penalty of 10% of the initial order amount.

However, Bitmine recently announced on its official forum (just before it was closed down for about a week due to personal insults towards the CEO) that the maximum bonus hashing power was limited to 50% – a fact not mentioned in their customer protection plan.
This fact, in addition to the PETA-MINE story and the CoinCraft Desk’s ‘turbo mode’ issues, has led to many upset customers.
From the end of February till mid-March emails were answered with a delay of one to two weeks. During this period it was also very difficult to get a support representative on the phone.
Bitmine has worked through its support tickets backlog, however, and you can now expect a response time of about one day.
So far, Bitmine has been unable to provide an estimated shipment date for my order.

KnCMiner

Product: Neptune (3 TH/s)
Price including shipping: $10,175
Pre-order date: January 7th, 2014
Anticipated shipping date: Q2 2014
Expected delay: None
Having taped out their 20nm ASIC chip in February, KnCMiner seems on track for the Q2 delivery of the 3 TH/s SHA-256 mining rig.
In case a delay should occur, KnCMiner has said it will compensate customers with a free hosted hashing package as part of its so-called ‘Plan B’.

Alpha Technology

Product: Viper (Scrypt) Miner (90 MH/s)
Price excluding shipping: £5,450 ($8,984)
Pre-order date: January 10th, 2014
Anticipated shipping date: July 2014
Expected delay: None
Shortly after the KnCMiner 100 MH/s scrypt miner announcement on March 3rd, Alpha Technology struck back with updated specifications for both of its upcoming miners.
The hash rate of the 5 MH/s scrypt miner has increased to 16 MH/s, while the 25 MH/s rig will be mining at 90 MH/s. Prices have not increased as a result.
Regular development updates contribute to a good customer experience so far.

CoinTerra

Product: TerraMiner IV (2 TH/s)
Price including shipping: $6,569
Order date: January 12th, 2014
Anticipated shipping date: May 2014
Expected delay: None
CoinTerra’s January and February batches were shipped out with a delay of about a month.
Because hardware specifications have been lower than anticipated – with a hash rate up to 1.72 TH/s instead of the advertised 2 TH/s and a 20% power draw increase – early customers were offered a 15% discount coupon redeemable against their next CoinTerra hardware purchase.
Seemingly now on track for delivery of later batches, they are working on improving the miner’s performance and power efficiency to meet its initial specifications.