Bitmain Review

Bitmain's antminer's ship from stock and provide one of the best Gh/s for the dollar of any unit on the market.  They have two cloud mining solutions, both of which are provably backed up by their hardware.

Written on: May 26

Intro to Bitmain

Bitmain is a Beijing-based hardware manufacturer that released a popular line of mining rigs known as Ant Miners. They leveraged their popularity to launch Ant Pool - which is now one of the largest mining pools in the bitcoin market - and a cloud mining service known as Hash Nest.

Bitmain has emerged as one of the top companies within the mining space, but is not without its issues. Provided that one is able to both get in touch with and comprehend the words used by customer support, they are appallingly difficult to deal with. However, the company has a good track record in delivering on its promises, ships from stock, and seems to be honest and well-intentioned.

AntMiners

The Antminer S5 is the latest generation mining rig from bitmain. Check out the specs below:

Gh/s Overclock Watts per hour Cost Best operating conditions Cooling Dimensions (mm)
 1155 13-1400 Gh/s  590 $340  Up to 35°C  12038 fan (Evercool) 298x137x155 3.5kg 

 

The units ship from stock, with shipping running at about $40. Payments can be made in bitcoin or USD, the former much preferred as USD bank wires get hit with a $60 fee. We calculated elsewhere a 7 month S5 payback from late March, assuming 11 cent energy costs, a 5% monthly difficulty increase and using a total cost of $370. There has been only a marginal difficulty increase since (Accurate as of May 7th), so perhaps payback would come in ahead of schedule. Input your personal circumstances below for a personal ROI forecast.

AntPool

Antpool is a solid PPLNS mining solution. PPLNS, pay per last n shares, divides payout for successfully mined blocks among the previous "N" number of shares earned by miners. Antpool adjusts the difficulty level required for submitted hashes to be considered shares based on the overall network difficulty. (For example, if the diff level for a share was set at 1 million, only hashes that would solve a block set at a difficulty level of 1 million would earn the miner a share). The pool runs with no pool fees, although transaction fees within successful blocks are kept by Bitmain to support the operation of the pool. Funds are automatically paid out daily to miner's accounts.

Antpool has set up an alternative pool that is meant to plug into the p2pool network, which they have claim will contribute to further mining decentralization. Though perhaps well-intentioned, the idea has met with plenty of criticism as users would still be aggregated within Antpool's node connecting to the p2pool, thus simply creating a pool within p2pool. Moreover, Antpool would actually increase the variance within p2pool to the detriment of small miners. The difficulty required for earning a share would be consummate with the overall increase in mining power contributed from Antpool. Thus, it would take small miners a longer amount of time, on average, to earn a share, meaning they might miss out on blocks rewards in the interim. In any event, users connecting to antpool's p2pool network are paid according to the same PPLNS method.

HashNest - Cloud Mining

Hashnest, originally named snowball.io, was purchased by Bitmain in September 2014. Hashnest offers two different cloud mining solutions.

PacMic

PacMics, at a cost of one bitcoin per terrahash, represent a new form of contract meant to pay back the user's principal investment as quickly as possible. To this end, all maintenance costs are absorbed by Hashnest, allowing for a much higher daily earnout.

There are two separate payment components to the PacMic - principal and profit. The profit rate is predetermined at .7 Satoshis per each unpaid bitcoin-worth of principal. This is slowly reduced as the principal is paid down - for instance, if only .5 bitcoin principal were to remain, the profit rate would reduce in corresponding fashion, to .35 Satoshis. As explained by a bitmain representative, assuming that earnings are rolled over into new contracts - meaning the principal remains constant at one bitcoin - the projected ROI calculates at about 22%.

This is based on a projected payback period of between 105 and 120 days. After 120 days, if the initial investment capital has not been paid back and the miner has stopped producing enough revenue to pay for its own maintenance cost, there will be an additional 10 days of payout. After the 10 day payout, mining operations will cease entirely, though if a drop in difficulty or rise in bitcoin price make profitable mining possible again, operations will resume.

Antminer S5 hash market

Bitmain offers a managed S5 mining solution, in which a fully managed S5 unit may be purchased for a price of $428.39, with a $.097/KWh maintenance fee. The unit is hooked up to the AntPool within 72 hours, and users are paid according to the standard PPLNS structure. Contracts are terminated when the maintenance fee is equal or less than the mining revenue for 10 days in a row, after which a user may choose to receive delivery of the unit - costing only shipping and handling.

So what makes more sense, buying the Antminer S5 for home use - which currently retails at $340 - or purchasing Bitmain's managed solution for the extra $88.39?

First, add a minimum $50 for shipping to Europe and the United States. USD payments are also hit with a bank wire fee of approximately $60, making bitcoin purchase the much preferred option. The shipping and wire amounts are constant despite order size, so the additional per unit cost diminishes with larger purchases.

Second, the contract comes with a 100% uptime guarantee, a welcome attribute considering home miners must be ever aware of unit overheating, etc. Perhaps just as importantly, customers do not have to deal with the massive noise pollution resulting from the fan cooling system.

And lastly, the most important consideration from an ROI perspective is the energy consumption. Assuming an $0.12 energy rate, the savings on the hash market contract comes to approximately $0.32 a day, around $10 a month. Assuming the purchase of one unit using bitcoin, the extra $30 invested in the mining contract would be returned in saved energy costs in approximately 3 months.

In our view, this is a superior option to the PacMic, and one of the best cloud mining options on the market, at least as of May 7th 2015. BitMain exposes the mining address corresponding to a particular unit, meaning that users may monitor the actual performance of their contracted rig. And of course, the fact that the contract is offered by a top hardware provider ensures that a user is getting what was paid for, regardless of eventual profit, or lack thereof.

The contracts are currently sold out, but there is meant to be an additional upcoming rounds. We hope to see Bitmain/Hashnest maintain this model of cloud mining for the long term.

Bitcoin Price (USD): 853.48