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What is my ROI on my chia farm investment?

Author: LB 2021-07-23 649

HDD mining is a novel idea meant to lower energy consumption in cryptocurrency networks. Chia network with its proof-of-spacetime algorithm appears to be a candidate to replace traditional PoW based cryptocurrency in our world evolving in the direction of a greener future. While energy consumption is indeed an important aspect to be considered, cryptocurrency miners are more interested in the returns provided by mining projects. In the following few lines I’m going to iterate through the financials of my chia farm and shed light upon the ROI of this humble HDD mining project. Let’s get started!

A few months ago, back in May 2021 we decided to build a chia farm to participate in one of the most promising cryptocurrency projects of this year. Unfortunately, it took some time for us to understand the ins and outs of Bram Cohen’s project and we accidentally bought a few unnecessary parts for this project. For the sake of simplicity, let me exclude these items from the calculation below.

If you peruse the chia network whitepaper, you can decipher that in order to mine chia you need storage and your revenue is exactly proportional to the amount of space you allocate to mining the currency.

Allocating the necessary space is a relatively straightforward process for IT experts, especially if you have good Linux administration skills, but it can be challenging for beginners. Space allocation consists of a step creating plot files. Usually these files are roughly 102Gb large, but you can tweak this by setting the k parameter to 33 or 34 when you call the chia plotter.

If you use the default k=32 setting, then you end up with plot files of 102Gb and you have to fill up your hard drive space with these files containing no meaningful information whatsoever. If you have a portable 4TB HDD for example you have somewhere near 4000Gb of available space so that should be enough to accommodate 40 plot files. In practice however, I can only copy 36 plot files onto a 4TB disc. This is mainly due to two issues. One is that hard drive manufacturers deliberately overstate the capacity of the drives, secondly you always end up with a few GBs on your drive unfill and unless you use a RAID solution, you have to leave that excess space unused. So this incurs a loss percentage of 10%.

In the following calculation, I’m going to use the current average price for 1TB hard disk space in Central Europe converted to USD. There might be fluctuations in the price depending on the type of the drive and sometimes you find better deals than you’d expect, but again for the sake of simplicity let’s calculate with 32 USD per TB, which is a realistic retail price in the European Union. And let's make it 36 USD to cover the previously mentioned 10%.

My current chia farm in July/23/2021 stores 1683 plots on 25 drives occupying 166.576 TiB HDD space. Not considering the type of the drives and approximating the total price with the average consumer price of 36 USD for a TB, my calculation yields 5976 USD for the farming space. My farmer is a PC with moderate hardware. I’m using an AMD Ryzen 7 3800X CPU and 16Gb of RAM. I bought everything brand new from a local retailer and I spent around 950 USD for this configuration including the USB hubs and other auxiliary parts. I also have to admit that I used a more powerful PC to create my plot files, because I wanted to be done with this as quickly as possible. Currently, the madmax plotter is one of the most powerful chia plotter available, but for fast plotting you need at least 128Gb of RAM and a multi-threaded CPU with plenty of cores. I’m going to exclude the cost of the plotter from the calculation, because the plotting can be performed on a moderate PC with a high performance SSD, albeit it would take much longer.

So in total I spent around 6926 USD for the hardware, and not less importantly I spent hours if not days assembling the optimal farmer configuration and creating the plot files. As this is an entrepreneurial endeavour, let’s not count my own working hours…

Now if we check the current state of the chia farming profit calculator, we see that 1683 plots earns you $8.25 a day or $251 a month. These figures depends on the netspace size and the actual market price of the coin. According to the data on the current netspace is 31.428 EiB and the coin is being exchanged at $177. From these numbers we can easily calculate the annual ROI of my chia farm, because with $251 a month, I’d end up with $3012 a year and if I divide that with my initial investment my ROI is around 43.5% before deducting any operational cost and supposing that neither the netspace size, nor the coin size change.

Energy consumption of my chia farm

In order to determine the energy consumption of my 166 TiB farm I plugged all my hard drives and my computer into the same socket and I installed a power consumption meter. If I only run the chia harvester on the PC and no other application is running, the chia farm consumes roughly 170W of electric power. As electricity prices vary depending on the country you live in, I’m not going to include this factor into my calculation, but you can estimate your electricity costs with my numbers.

If you want to know more about crytocurrency mining or chia farming, you can contact me on: +36 30 831 69 72 using WhatsApp.

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