The difference between home mining and hosting: which is more valuable?

Have you ever thought about mining cryptocurrencies, but have no idea how it's going and what is necessary to do? The first thing you'll need to decide is whether to mine digital currencies at home or using a hosting service. In this article, we will use the years of our experience to introduce you to the difference between home mining and hosting!

Home cryptocurrency mining

We'll start with home hosting and explore why it's suitable for you, why mining cryptocurrencies at home, and also if it's profitable.

Home mining, as the name suggests, is performed when the miner has all the necessary mining equipment in its home. This includes a dust-free room, a source of cheap electricity (from photovoltaics, for example) and the ASIC miners themselves.

In short - see below for more details - home mining is suitable for those who:

• have a surplus of cheap electricity from their own sources,
• can handle basic maintenance,
• have a soundproof and ventilated room,
• want to be in physical control of the equipment.

When is it profitable to mine cryptocurrencies at home?

It is profitable to mine cryptocurrencies at home if you have your own source of electricity. For example, if you have photovoltaics and you don't use all the energy, you can use it for mining and earn a nice income.

You may be asking, "Can I mine cryptocurrencies at home without photovoltaics or any similar source?" Yes, we also offer home miners with very low power consumption (300W or less). However, large industrial miners are usually more suitable for hosting - the Czech Republic has some of the most expensive electricity in the European Union, and under such conditions, home mining without its own power source is usually not profitable. At Coin Factory, we don't sell you a miner at any price, but we are here to help you choose the best option for you. Home miners cover a very wide range of power consumption - from a few watts to around two thousand. You can find the best and most profitable miners here.

Why to mine cryptocurrencies at home

Electricity is very difficult to store. It's one of the biggest technical problems of today. So you either consume the electricity from (for example) photovoltaics or you lose it. The majority of our clients operate a miner at home for this reason.

The fact is, however, that there is another option: connect to the grid and sell the electricity to the exchange using a special service.

It probably is not necessary to mention how much more profitable the mining of cryptocurrencies is - even if you sell them all at once.

Is mining at home worth it?

Again, if you have your own energy source and it covers your consumption, yes. How much you can earn by mining cryptocurrencies can be found in our previous article. Simply enter $0 into the formula instead of the price of electricity. Once you get a approximate calculation, remember to consider that you need to tax the mined cryptocurrencies properly. We don't have an article on this yet, but you can find a number of excellent Czech articles on the web.

Input costs for domestic mining are different. The most powerful miners such as Antminer L9, L7 or S21+ require a good environment and regular maintenance. On the other hand, specifically domestic miners such as the Fluminer L2 do not have such requirements. The investment can range from 10,000 to several hundred thousand crowns. In general - from personal experience - the most expensive miners are more suitable for a professionally maintained datacenter, which can provide eventual repairs and avoid a lot of trouble with maintenance, dust and other technical issues.

You have to pay VAT when buying miners for home mining, but not for hosting.

What to be aware of when mining at home

Sometimes, in the excitement of a new mining activity, you forget one major issue: not every environment is suitable for mining. Mining equipment is quite noisy - its noise level ranges from 30 to 60 decibels, while the most powerful ones can reach 70 or more. This is equivalent to the noise in a busy office, which may be unsuitable in a home with small children, pets and the like, for example.

The idea of placing the miner in a shed or attic is also a possibility. However, this may significantly shorten its lifetime and thus extend the return on investment. The ideal home environment is difficult to describe precisely, but from experience it is a clean, dust-free home chamber from which the heat is vented through a pipe - for example, by using a Silent Box. The heat can then be used to heat a more remote part of the house, for example.

Finally, let's not forget the fire risk: safety is absolutely essential. Mining means a continuous consumption of hundreds of watts to kilowatts, so we always recommend a stronger circuit breaker and good quality electrical wiring.

Hosting cryptocurrency mining

Hosting is a more simple option, but you have to accept the loss of full control and the fee that is included in the price of electricity. This payment model is used by almost every provider.

Even so, running powerful miners like the L7, L9 or S21+ is profitable just because of the very cheap electricity that hosting offers. For example, in Coin Factory you pay about $0.075 per kWh. To compare - in the Czech Republic the price of electricity is around $0.24 per kWh, although it has fluctuated significantly recently. High consumption of powerful miners can bring solid profits with a return of about two years. If you want specific prices, email us at info@coin-factory.cz or call us on +420 777 006 685 - we always have them available. The data changes almost every hour, so we can't present it here.

In short: Hosting is for you if…

• You don't have the time, space or ability to manage your own miners and want to run the best performing ones at a professional level.

• You don't have a problem with a higher investment.

• You want a passive income without the worries.

• Your intention is to maximize your income because of cheap electricity.

When is hosting cryptocurrency mining profitable?

Hosting is suitable for those who want to mine at an industrial level but prefer to delegate it to professionals - even for a small fee and the fact that they don't have physical control of their miners. The typical intention is to generate passive income effortlessly.

Compared to domestic mining, a significantly higher initial investment is required. Machines suitable for the hosting mining range in price from 3 000 to 10 000 EUR per unit. In comparison to equipment for home use, however, you do not pay VAT because the miners go directly from the supplier to the hosting outside the European Union - in our case, the United Arab Emirates.

As for the potential amount of profit, we recommend you read our article again and enter $0.075 per kWh in the electricity price calculation. Or simply email us at info@coin-factory.cz or call us on +420 777 007 065 - we always have the updated numbers available.

In general, more expensive and more powerful miners are more efficient and therefore more profitable. Datacentres usually accept miners with power consumption from 2500W to 4000W, but it is not a problem to begin with just one single miner if you want to try it out first. You can find the conditions of our datacenter on the Hosting page and the best miners for mining here.

Is hosting mining profitable?

Definitely yes. With cheap electricity, it's a good way to generate passive income with a good return if the cryptocurrency market isn't falling too fast right now. And if it does, usually the big companies are unplugging the miners, which will reduce the difficulty of mining and the profits will balance out a bit.

There's probably nothing more to say about this, but still, here are a few things to be aware of…

Things to be aware of when hosting

The first is choosing the right hosting. After all, you're looking for a partner to operate your machines for hundreds of thousands. It's pay attention to the contract and the terms and conditions, which can sometimes contain hidden fees, or be so cheap that you probably have to save elsewhere, such as on staff or security contractors. This is most common in African datacentres, for example in Nigeria. Therefore, be aware of the choice.

The second thing is the method of taxation. Mining cryptocurrencies on hosting, i.e. abroad, is a little bit of a grey zone. Simply explained, as a European tax resident, you are obliged to declare your income here, even if it comes from abroad. The costs of the activity are simple - miners, electricity, hosting, repairs, etc. Income is generated at the moment of sale or exchange (also for other cryptocurrencies, i.e. the so-called "taxable moment") of mined digital currencies.

One final point is that the legal framework for mining can change rapidly abroad. So make sure that the hosting provider knows what they are doing and that they have studied the local environment and possible regulations. I can guarantee that we do.

Comparing Hosting vs. Home for Cryptocurrency Mining

Finally, let's get to the basic facts about hosting and home cryptocurrency mining.

Electricity costs:

Home mining: Home mining is usually profitable if you have your own source of renewable energy that you don't consume. This can make electricity costs as low as zero.

Hosting: the price range of foreign hosting varies. In the UAE it's $0.075 per kWh, in the US it's $0.0825, somewhere in Africa it's probably cheaper. However, the price of electricity shouldn't be the only thing you look at when you're choosing hosting. Don't make these mistakes!

Investment and input costs:

Domestic mining: strictly domestic miners range in price from €40 to €4 000. The more expensive, the more efficient they are. For each of our miners you will find a calculator and information on efficiency, i.e. how much electricity it consumes for a certain output. You can find the best home miners in the text here.

Hosting: Hosting miners must have a power consumption between 2500 and 4000 W. Most of them can easily generate a profit, but they cost from €3 000 to € 10 000. The initial investment is usually higher. If you already have a specific model selected from the best and most profitable miners, you will also find a general calculation formula for profit here. In addition, you can email us at info@coin-factory.cz or call us at +420 777 007 065, where we will be happy to tell you the actual profits.

Maintenance and Technical Difficulty

Home mining: In real terms, only a professional should do the maintenance of a miner, otherwise you risk losing the one-year warranty period that most of the better miners have. However, if you would still like to do repairs or maintenance yourself (such as cleaning the fans), you need some technical skills to do it properly.

Hosting: You practically don't need to know how cryptocurrency mining works. Everything will be arranged by professionals on-site hosting. But you have to pay extra for major repairs if something goes really wrong.

Control over your device

Home mining: You have perfect access to your device, its settings and maintenance at home. No one can deprive you of it.

Hosting: You lose a certain level of control, so it's a very important to spend enough time choosing the proper partner and avoid the most common mistakes so you don't lose your investment.

Risks

Home Mining:there are various risks such as poor selection of miner and long return, fire risk, short life span due to poor maintenance and more. In addition, also the price of cryptocurrencies, diminishing returns or conversely the increasing difficulty of mining.

Hosting: With hosting, the risks are more focused on the price of the cryptocurrencies themselves. The machines are professionally taken care of, so their lifespan should be at least okay. However, the falling price of cryptocurrencies, market interest, or conversely the rising difficulty of mining may extend the return period of your machine.

Profitability

Profitability unfortunately cannot be directly compared as it is extremely dependent on such variables as the specific model, the price of electricity, the proportion of electricity from own source, the price of cryptocurrency, the increase or decrease in difficulty, new models and others. There are just too many unknowns. It's best to contact us and we'll provide you with up-to-date information and sound advice. A quick guide to a basic calculation can be found here.