It is no longer news that crypto mining is an extremely lucrative endeavour. Any miner that held on to their mining rig during the past few years has certainly accumulated a substantial amount of wealth. It is also well known by anyone who has been mining for even a short period of time that sourcing good quality miners is no easy feat. Miners are primarily sourced from China, and there are plenty of resellers with the goal of selling them to you.

Long gone are the days when Bitmain, Innosilicon and other major mining equipment manufacturers would sell single miners as retail orders, as they are now solely focused on large scale buys. For you to be able to purchase directly from Bitmain, you would need to have several million dollars ready at your disposal. This, in large part, is due to the fact that bigger buyers and companies are now in the mining game and are placing massive orders that take a long time to be fulfilled.

Bitmain coordinates price controls in order to buoy miner prices.

China Multi-tier Resellers

Have you ever stopped to wonder how many resellers are changing hands before the miners finally get to you?

The first broker in this process would place the order from a friend. That friend would place an order with another friend, and the next friend would place an order with a group-buy organizer that finally places their order with a major manufacturer like Bitmain. The chain of reselling is so fragile that if a single one of the members in this process was to be compromised, the entire system would collapse, and your dream of seeing your miners would collapse with it. Additionally, it’s worth mentioning that the heavy premium you had already paid for each of the broker’s commissions would evaporate into thin air.

China Mining Ban

Since the crypto mining ban enforced by the Chinese government, the market has seen an extreme volatility of miner prices brought on by an exodus of crypto miners being forced out of the country. This was a black swan event that, for the first time ever, saw brand new miner prices take a nosedive. The Bitcoin price has since been steadily recovering, and as supply from Chinese miners dries up, we are witnessing an upward trend for miner prices; the price of a miner is advertised when the Chinese wake up, and changes by the time the sun goes down.

Many green industry players are turned away by this price volatility.

“What if I buy and the price keeps going down? I don't want to be stuck paying $7,000 per miner when I can buy them for $5,000 next week”.

No one has a crystal ball for predicting the future, but buying a miner now means quite literally attaining them at half the price of what they were when Bitcoin was trading at $60,000, while having a similar profitability.

The Impact of Price Volatility

U.S. brokers are especially exposed to this volatility, and unless they are stocking brokers, they would have to mark prices up higher than usual to be able to ride it out. The less experienced they are, the higher the prices will be.

Unless you work with a large broker that actively updates their pricing accordingly, it is very likely that you will run the risk of unfulfilled orders.

Scams and How to Avoid Them

There is no industry more plagued by scams than crypto. Here is a list of known scam sites that imitate manufacturer names in their URLs in hopes of taking advantage of enthusiastic and unsuspecting buyers such as yourself:

Buying from a Reputable Broker

There are brokers everywhere, and they are all trying to do the same thing: get a piece of your pie. Finding one that is worth working with can be tricky. Your best bet in mining, long-term, would be to partner with a broker that is vertically integrated in mining and is able to host your miners for you. Prices for hosting could nearly double without an equipment package compared to what they would be for external miners.

This is what happens when you try to save a few bucks and decide to buy used miners from back-channels or questionable mining equipment sellers and brokers without exploring the opportunity of a hosting facility.

Wattum Mining and Decentralization

Wattum puts up its own capital to sign high-volume future contracts with manufacturers such as Bitmain, Canaan, and MicroBT. Our mission is to keep the decentralization of mining alive by acting as a proxy and investing on behalf of our clients to enable them to compete in an industry filled with monopolies held by whales, as well as with our competitive industrial electricity rates at our variety of facilities around the world.