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Why You Should Consider Colocation for Bitcoin Mining

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Why You Should Consider Colocation for Bitcoin Mining
October 30th, 2019NewsComments Off on Why You Should Consider Colocation for Bitcoin Mining

Regardless of the recent downturn in value, Bitcoin still leads the crypto market. And as we head towards the end of 2019, cryptocurrency mining continues to remain hyper-competitive. During the past few years, mining digital coins have evolved at a rapid pace.  Those who started mining as a hobby are now looking to expand their operations because of the increasing profitability, as well as complexity.

Cryptocurrency mining requires a smart mind, a powerful computer, and a lightning-fast internet connection. The simple home mining rig setup is no longer profitable in the current market climate. With the increasing value of Bitcoin and the rising popularity of mining, it has become imperative to look for alternative mining methods. If the GPU setup in your house or garage is not making a decent profit, it’s time to either join a mining pool or use colocation for crypto mining.

With the increasing value of cryptocurrencies, the challenges associated with mining them has also increased. More and more miners are joining the network to solve the complex equations with dedicated ‘Bitcoin mining rigs’. To compete with them, it’s best to consider colocation. Now you may wonder what colocation is and how can it be used to maximize your cryptocurrency mining revenues. Here’s what colocation is and how it can help you maximize your ROI on your mining investment.

What is Colocation?

The problems faced by the home mining setup can be solved by colocation. Mining Colocation is a method of mining cryptocurrencies by renting space in a data center. In this method, you own the mining hardware and simply pay the data center to maintain it for you. Once you sign a rental agreement with the data center company, your mining equipment will be operated and maintained by the professionals.

Colocation offers a low-cost alternative to those who cannot maintain, manage and upgrade their own mining setup. Whether you have a GPU rig or a superior ASIC mining hardware, colocation allows you to place your equipment in a secure facility under the supervision of an IT professional.

If you want to colocate your mining equipment, you need to first consider your power needs. You should have a clear idea of how many kilowatts of power and rack space you need. The data centers charge a fee based on space or power usage, or a combination of both.

Reasons to Consider Bitcoin Mining from a Colocation Center

The mining hardware performs complex mathematical problems to receive crypto rewards. In the present competitive environment, your equipment needs to perform faster than others. Colocation is better than self-hosting because it’s a cost-effective and hassle-free mining method.

Here are some reasons why you should consider mining colocation.

  1. Access to Power, Cooling & Network

Whether you opt for ASIC or GPU miners, your mining equipment can’t reach its full potential in your basement or office setup. Colocation data centers, on the other hand, give your hardware access to state-of-the-art infrastructure. The data centers have redundant power, network, and cooling equipment to keep your hardware running at all times, 24x7x365. If you set up mining rigs at home, you need time and effort to optimize and manage your machines. You may also need to spend thousands of dollars to modify your home or office environment. The cost of upgrading electrical infrastructure, cooling, and network can eventually reduce your mining revenue. Besides the cost, you also have to tolerate the noise and heat issues.

  1. Superior Security

The colocation facilities offer multiple layers of security to keep your equipment safe. The data centers are built to be highly secure with facilities like 24×7 security personnel, CCTV cameras, video archives, digital locks, man traps, and biometric scanners. Their state-of-the-art security systems ensure physical, as well as network security. Protecting sensitive data and expensive hardware is the primary concern of companies. When they opt for colocation, the data center makes sure to secure their data and equipment cost-effectively.

  1. Costs and Capital Savings

Buying advanced mining hardware and then providing it the required space, power and cooling can reduce your mining return. If you want to reduce your mining expenses, colocation is a wise choice. When you opt to colocate your miner, you can save the cost of buying UPS, backup generators and HVAC units. The data centers have industrial liquid coolers, power, and bandwidth to help your miners reach peak mining performance. Moreover, the data centers have IT experts to operate your miners 24×7. The home setup is prone to suffering from significant downtime. But when you host your rigs with a data center, there’s a team of professionals to offer you round the clock support and instant attention to problems. You also get the flexibility to increase or decrease your bandwidth according to the fluctuating market demand. Data centers give your miners access to power generators, air conditioning systems, internet access, routers and everything needed to ensure optimal mining performance.

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