Where to Place Mining Equipment

Our data center first started receiving mining equipment back in 2010, when the whole concept was still new. Even our staff got into it, mining on regular ATX and Big Tower setups. I was skeptical at the time—governments would never give up control over printing money and taxation. But demand creates supply, and over the past decade, cryptocurrencies have made significant progress.

The supply and demand in this market are quite unique. News stories often go viral about unlucky miners who set up rigs on balconies or in apartments, not realizing that household outlets aren’t designed for such loads and that the laws of physics and electrical engineering can’t be ignored.

Another group of viral stories involves people stealing electricity and mining on an industrial scale without management’s knowledge—often employees with access to lots of computers or electricity. Then there are the fly-by-night companies that collect equipment and disappear, or steal electricity and end up facing criminal charges.

Here, we’ll share some important facts for those mining cryptocurrency or planning to start. Let’s dive in.

Everyone Rushes to Mine at the Peak

Guys, you should sell at the peak, not start mining! We see these waves firsthand. When Bitcoin surges, clients rush to us in droves. When crypto crashes, they sell everything off. At the peak, people buy up graphics cards, which disappear from store shelves—much to the frustration of gamers. When prices drop, they sell for next to nothing, even though that’s the best time to buy GPUs and ASICs.

You need strategic thinking. Mining is a long-term game, like the stock market. Think of it as a 10-20 year investment. On average, you’ll likely see growth and preserve or increase your savings. But if you chase news cycles, you’ll probably lose out, since by the time you hear the news, the market has already reacted.

Electricity Price Isn’t the Top Priority

I’ve had people from Europe approach me, and I suggested Russia. They refused. The key isn’t where electricity is cheapest, but where it’s most reliable. Electricity prices can differ by a factor of two, but that doesn’t matter much if you’re thinking strategically for the long term.

Check how long the company has been around. Did it survive previous booms and busts? We’ve seen clients get scammed out of their equipment, and competitors go out of business. For example, one client spent almost a year trying to get his equipment back from a “one-day” mining hotel and only recovered half—everything else was sold off. Another competitor didn’t raise electricity prices for clients as rates increased, went deep into the red, and closed down. This highlights the importance of a clear, simple contract.

What Doesn’t Matter for a Mining Hotel

In our article “Renting a Rack in a Data Center or How to Choose a Data Center,” we listed many parameters a data center should have. Some data centers put mining equipment in empty racks, but that’s like using a sledgehammer to drive a shoe nail.

Mining rooms have less strict temperature requirements. Since mining equipment generates a lot of heat, placing ASICs next to regular servers is bad for the servers. This isn’t the miners’ problem, but server owners should be aware.

Raised floors, racks, 100% uptime, UPS and diesel generator backup aren’t necessary for mining—they just drive up costs. However, quality connectivity is crucial. Mining hotels using cheap home routers and 3G modems can’t provide good ping, low jitter, or zero packet loss, which means some solutions won’t be accepted by pools due to connection issues.

What Matters for Hosting Mining Equipment

• Fixed costs not tied to crypto prices. Mining hotels shouldn’t take a commission from your mined volume or peg prices to cryptocurrency rates.
• Excellent ping and redundant network connections.
• No “house pools” or commissions from your mining.
• Legal electricity. You don’t want your equipment seized by police because the mining hotel was stealing power.
• Stable temperature.
• Professional technical support engineers.
• Build your rigs in rackmount cases, not makeshift frames.
• It’s a plus if the company has licenses.

Cooling Mining Equipment

In winter, use supply ventilation for cooling—there’s no need to run industrial air conditioners. In summer, air conditioning is necessary, so make sure it’s available. There have been cases where equipment was placed in high-ceilinged halls, but Russian summers can hit 100°F (40°C), so don’t rely on natural cooling. Container cooling also has issues: high equipment density in a small space, and metal containers heat up quickly from both the equipment and the sun. Powerful fans can even pull in rain or snow, damaging expensive equipment.

How to Choose Where to Place Mining Equipment

Here’s a list of parameters to help you build a comparison table for deciding where to host your mining equipment. Gather and analyze information about different mining hotels in these areas:

• Company information
• Technical specs of the mining site
• Licenses
• Range of services provided
• Cost

Compile all data in a Google Sheet, convert qualitative data to quantitative using expert assessment, assign weight coefficients, and create a formula for an overall score. Always visit the data center for a tour before making a decision.

Company Information

Collect the following info for any service or product provider:

• Company age (year founded, from official records)
• Does the legal address match the actual address?
• Average staff size
• Revenue for previous years
• Taxes and payroll contributions
• Legal cases
• Enforcement proceedings

These are easy to compare since they’re numerical. Legal cases are trickier—no cases at all can be as suspicious as too many. Separate cases with clients from those with suppliers. Next are qualitative factors you’ll need to assess individually.

Management Contacts

Feedback is essential! The availability of management contacts is a guarantee of quality service. Any employee should know that poor service can be reported directly to the company’s leadership. Otherwise, dealing with such companies is like talking to a wall. We’ve never managed to get any large organization to improve its business processes or service quality.

Reviews and Response

Check reviews and how the company responds. If there are too many positive reviews, they might be fake.

Company History

Official records (like those from nalog.ru) can tell you how long the company has existed and how often management or ownership has changed.

Server Room Location

We recommend placing your mining equipment in a region that’s easy for you to reach. If your equipment is thousands of miles away, it’ll be a major hassle to get there if something goes wrong.

Technical Specs of the Machine Room

Downtime and Uptime

Server rooms have a concept called uptime—the percentage of time they’re operational. Uptime is calculated by subtracting downtime from total operating time. Downtime can be caused by:

• Server software failures
• Mining equipment failures (ASICs, GPU farms may need repairs)
• Mining hotel outages:
  • Cooling system failures
  • Power supply failures
  • Router/network failures, DDoS attacks

Absolute 100% uptime is rare, but 99.5% is usually enough for mining. There are different types of uptime to consider. Accidents will always happen; you can minimize them, but never eliminate them entirely.

Licenses for Communication Services

Check for licenses for telematics and data transmission. It’s best if they have them.

Technical Support and Equipment Access

Find out if 24/7 support is available and whether you can access your equipment at any time. Ask what issues they can and can’t help with.

Network Connections

There should be at least two fiber optic lines from different providers and routes. If there’s only one and it gets cut, repairs could take a long time. Low ping is crucial. To assess network quality, check:

• Ping value
• Average connection time
• Average DNS response time
• Uptime and outages over recent years
• Actual data download speed

Who Makes the Electrical Equipment?

The power system should use reliable components from top global manufacturers, like Schneider Electric. Cheap parts increase fire risk.

Where a Mining Hotel Should and Shouldn’t Be Located

• Not in a basement, bunker, or bomb shelter—risk of flooding or forced evacuation.
• Not in an office building—the noise from mining equipment is disruptive.
• If above the first floor, consider floor load limits.
• Factory workshops with high ceilings can have heat removal issues in summer.
• Container mining is risky—equipment can be stolen quickly with a crane, unlike in a secure server room.

Security

• The mining hotel should have controlled access—no unauthorized entry to the premises or technical rooms.
• There should be at least two security guards on duty, with regular patrols.
• There should be a contract for armed response, and staff should have a panic button.
• Access to the machine room should be supervised by an engineer.
• If the machine room is above the first floor, there should be elevators and carts for moving equipment.
• At minimum, there should be a fire alarm—ideally, a full fire suppression system.
• Cameras should cover all approaches and areas inside the mining hotel, with at least 30 days of video archive.

Range of Services Provided

Check the list of basic and additional services. Review the contract and the provider’s capabilities. You may need:

• Payment by card, e-money, and other methods
• Electronic document management for invoices and receipts
• Cash register receipts in compliance with regulations
• 24/7 access and technical support, including holidays and weekends
• Support via phone, email, client portal, website chat, and Telegram
• Client room for working with equipment
• Kitchen for tea, coffee, and snacks
• Storage and lockers
• Monitoring and administration of client resources

Cost

Comparing mining hotel prices is almost pointless. This is the least important factor. Over a 2-3 year horizon, it’s more important to find a reliable service provider who won’t disappear than to save a few cents on electricity.