Which Factors Affect Your Bitcoin Hosting and Bitcoin Mining Cost the Most? Read to Find Out!

18 Jun 2018 by Mike Allen

If you have had a level of success mining bitcoin, and you continue to expand your operation, chances are that you will soon need a place that can offer space, power, and cooling. This is called Bitcoin hosting.

Despite all the likely benefits of renting space in a data center, not every data center is the same and colocation may not be the best option for you as a cryptocurrency miner. We show you how to choose the best hosting option for Bitcoin mining.

What To Expect From A Colocation Facility

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Most colocation providers ensure that their centers have a redundant network, power and cooling equipment. While redundancy ensures that all IT equipment are operational throughout the year, it could add up to $650 per square foot to the cost of a data center that lacks redundancy. 

If you are okay having your equipment offline for around 36 hours annually, consider going for a data center with no redundancy. 

It is important before contacting a colocation provider to first understand your power requirements. Other than the kilowatts needed for mining, you also need to determine the necessary space in terms of racks. 


Some colocation providers charge based on power, others on space and others on a combination of both. It will be impossible to get a price estimate without having an idea of the space and power you require. 

Another important factor in bitcoin hosting to keep in mind is the colocation budget, which depends on the amount of money you can spend and still remain profitable. Most colocation providers ask for a deposit as well as a twelve-month minimum contract.

In case you find that colocation is not for you, there are a number of hosting providers that offer the best mining solutions including Mining Colocation that is situated in Canada that charges $100 per kilowatt. 

Frontline Data Services, headquartered in New York, also offers collocation services. Similarly, Enhanced Mining offers a number of premises in Canada and the US for mining Bitcoin.

Why Mining Bitcoin is Profitable despite Fluctuations in Value

Mining bitcoin allows you to make money. If done correctly, mining bitcoin can be a very profitable endeavor, allowing you to even quit your full-time job. The biggest benefit in mining bitcoin is in the money you make through mining.

Mining bitcoin ensures that you always hold something valuable. It is very important to remember that the value of cryptocurrency can at times plummet. Some cryptocurrencies have declined in value by more than 20% in a day. 

Here’s the deal:

Cryptocurrency mining operations require high-end equipment, which tend to maintain their value. Therefore, even if the cryptocurrency that you mine crashes in value, the mining equipment you use would still be valuable.

Another benefit of mining cryptocurrency is that it is theft-proof. From a theoretical perspective, it is impossible to steal cryptocurrency, which cannot be said for conventional currency. 

As such, the coins you mine will always be safe in your account.

Cryptocurrency is safer than faucets. Faucets refer to the apps and websites that help people run mathematical equations. Faucets save miners them the trouble of using their own equipment for mining. 

While there are many good faucets online, there are also many scams. As such, mining cryptocurrency is a lot safer than faucet scams.

And here’s the best part:

As soon as you becomes very good at mining cryptocurrency, you can easily quit your day job and occupy yourself with the mining process. You get the benefit of becoming your own boss, setting your own schedule and rules.

Mining cryptocurrency allows you to avoid centralized monetary regulation. Cryptocurrency trade is largely unregulated. Even in the countries where cryptocurrencies are regulated, the regulation is not as strict as regular currency. 

Moreover, cryptocurrency remains largely untraceable. This gives you, the miner, a lot of privacy with regards to the amount of money you make and how you spend the money.

As such, mining cryptocurrency is a financially rewarding endeavor, which explains why so many people are getting involved. 

The Cost of Buying Antminer S9

The first contributor to Bitcoin mining cost is buying the miner. 

Before you purchase the Antminer S9, you should ensure you have a mining pool and mining software. The S9 is dropping in price and new ones cost $999 on Amazon while used ones cost $499 on eBay. 

When you reduce your electricity costs, you increase the chances of quickly breaking even on the purchasing cost of the S9. The S9’s sturdy design as well as the fact that it is air-cooled makes maintaining it a breeze. 

Other than the power supply, the S9 needs no connections to other computers when interfacing with other nodes on the Bitcoin network. The S9’s manufacture contributes a lot to making it one of the most efficient mining tools. 

The S9 only uses 0.1 Joules per Gigahash, making it 2.5 times as efficient as the Antminer S7. 

But here’s the deal:

Bitmain will soon release the new Antminer S11, which will push down the price of the S9 in future. Increasing the profitability is all about trying to incur as little cost as possible. 

If you can afford, it is advised that you buy an old and a new S9, which can help you swap damaged parts such as hashboards, which typically go bad within 6 months to a year.

Using NiceHash to Calculate Revenue

The NiceHash profitability calculator allows you to check the potential earnings of your hardware. 

You should use the profitability calculator with recognized high-quality products. It is also vital that you tweak your equipment in such a way that they offer the best combination of performance and efficiency. 

In case your hardware produces different results, it is important to tune them in such a way that they offer maximum efficiency.

The sample profitability listed in the profitability calculator is based on past data and cannot be used to predict future profits. Moreover, it is not possible to multiply a day’s profitability by 30 to get the profitability for the month because profit changes over time. 

In case your hardware is not on the profitability calculator list, you can manually calculate the profitability. Some of the metrics you would need include the purchase cost, electrical consumption and the speed measurements for the algorithms. 

Then, click on “Calculate for custom settings” on the profitability calculator webpage.

Finally, it is important to remember that all profitability calculations on NiceHash websites are only for information purposes. 

Be advised:

The information is based on hashing power rigs that meet certain test parameters. NiceHash results do not guarantee that your hashing power rigs will achieve the same earnings as indicated on the NiceHash website. 

You can only determine the true profitability when your rigs are connected to the system and linked to the NiceHash calculator website.

Why Power Costs are Most Important Despite Being Variable

Why would you want to host your server at a data center rather than at your own house? The answer is because hosting your server at a data center gives you more scalability than at home. 

At first, keeping mining servers in a residential or small commercial setting may appear cost-effective. As the mining operation scales up, however, so do the diminishing savings. 

Why is this a big deal?

People tend to ignore significant costs when they start Bitcoin Mining. As a result, electricity and other hidden costs quickly add up.

Cost Item 1: Electrical Infrastructure

Most new constructions provide for an allowable consumption of 38,400 watts, which is equivalent to 34 Antminer S1s or 20 Cointerra Terraminers. 38,400 watts does not factor the electricity required to live or work on the premise. Another cost item that is often left out of the calculation is the cooling cost. 


Even if you decide to install twenty 20-ampere power outlets, you will spend a considerable amount of money.

Cost Item 2: Cooling Infrastructure

40% of all the electricity consumed by a miner will be used to cool the space it occupies, in case mechanical cooling is required. Deducting 40% from 38,400 watts means that only 23,040 watts are left for actual mining. 

This also means that there will be a 40% increase in the net mining cost. With the national average energy cost in America being $0.12 per KWh, cooling costs bring this figure up to $0.16 per KWh. 

Besides, the net consumption of 23 kW adds up to 6.5 additional tons of cooling. With the average house requiring around 6 tons of comfort cooling, the mining operation will raise this figure to 12 tons of cooling. Installing an extra air conditioner is expensive.

Cost Item 3: Long-Term Opportunity Costs

As it gets increasingly difficult to mine Bitcoin, it is important to think whether installing twenty 20-ampere plugs and six extra tons of air conditioning is a worthwhile long-term investment. 

When mining cryptocurrency, remember that ‘time is money.’ You must to choose a data center that will understand the importance of guaranteeing uptime for your mining operation. 

And that’s not all...

The data center should also offer battery backup, a secondary power source, and network redundancy. Rather than worrying about power consumption, electrical consumption or downtime, collocate your mining equipment.


In conclusion, mining Bitcoin is a profitable endeavor that can help you quit your full-time job and set your own schedules. Moreover, even if there is a slump in Bitcoin value, the high-end equipment that you use for mining maintains its value. 

It is better to collocate your mining equipment because collocation gives you greater scalability and reliability than setting up the mining operation in your own home. 

While more expensive than other mining tools, the Antminer S9’s design is what makes it the most efficient mining device. Finally, you should use the NiceHash profitability calculator with high-quality products and remember that the calculator’s output is not a guarantee of future profits.


Mike Allen

If you have had a level of success mining bitcoin, and you continue to expand your operation, chances are that you will soon need a place that can offer space, power, and cooling. Despite all the likely benefits of renting space in a data center, not every data center is the same and colocation may not be the best option for you as a cryptocurrency miner.

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