Hackernoon logoWhy co-location is the best way to mine bitcoin by@tanveerzafar

Why co-location is the best way to mine bitcoin

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@tanveerzafarTanvir Zafar


Since the recent Bitcoin halving event, most small and medium crypto miners have had to shut down their mining rigs. Simply put, it is not profitable to have a mining rig in your home at current market prices. However, there are some solutions to the issue.

Solutions to Mining Unprofitability

One of the options that users use to make their mining operations profitable is the purchase of the latest ASIC miners with the best performance. However, the main hindrance to these mining rigs is that they are quite costly with a very long production and delivery time. The huge upfront cost and the long delivery time is something that many miners cannot afford.

Besides upgrading mining rigs, the other option that miners have is to join a cloud-mining firm. However, there are many uncertainties to what a cloud mining company can offer. There is also the fact that several cloud-mining facilities have been accused of being dishonest in their calculations. As a result, the amount that miners receive is significantly less than they should receive. So, you should be careful in choosing the right cloud company in case you go this path.

Recently, the hash rate fell a little bit, which made it a bit more profitable to mine BTC. However, the increase was only marginal, and it did not make much of a difference for most miners. One of the best upcoming solutions is co-location. Here is a bit more about co-location.

Understanding Colocation

A Colocation company allows you to outsource the management and infrastructure of your mining rigs. Just as with shared web hosting used by most internet startups, colocation allows you to build your crypto profitability via international cooperation.

With a colocation facility, the main benefit it offers is lower energy costs. If you live in the USA or Western Europe, you will find that it has become quite unprofitable to mine due to reduced mining rewards after the halving.

A proper colocation service uses a low costs facility where ASIC miners are housed. Once you purchase the equipment, you send it to the colocation center. You and the facility sign an agreement where they mine crypto on your behalf and send the coins to you for a small fee. In most cases, you have to pay for the hosting service annually or biannually.

Benefits of Using Colocation Services

By moving your equipment to a colocation center, you will get the following benefits:

Reduced Power Costs

The main benefit of moving to a colocation facility is the reduced cost of power. Most of these facilities are located in regions with some of the cheapest power in the world. It ensures that you can deal with the energy cost associated with crypto mining.

Continuous Monitoring

Other major benefit of colocation facilities is that you will get access to professional monitoring software that can increase the performance of the mining equipment. As a result, you could boost the profitability of your rig by ensuring that it is always producing at the highest levels.

Secure Your Mining Rig

A mining rig is an expensive piece of equipment. At Colocation Centers, they have various safety measures that help to ensure your mining rig is not damaged by overheating, and even if that happens, they can repair/change it faster. Besides, they have numerous doors, guards, CCTV, and access to software that protects from DDoS attacks. The result is that your mining equipment, which is quite costly, is protected from all threats at all times.

If you are mining from home by setting up a mining farm in your shed, there is a good chance you do not have the money to protect your rigs. Besides that, the design of the rig might make it vulnerable to catching electric fires since you do not have enough knowledge on how to build secure mining facilities. One famous advocate for colocation is the YouTuber and miner Vosk. While he owns mining equipment, he has said that if he had the option early on, he would have preferred it.

About Zytech123

Zytech 123 is an advisory firm based in San Francisco, California. Its focus is on the Crypto Mining Consulting, Blockchain industry, and the emerging tech sector. All these have brought the company to a successful journey. They also offer advisory services about Bitcoin Mining, Blockchain & Capital raising and help to select the well-run and most secure Co-location and Cloud Mining Facilities most suitable to each type of investor (institutional or individual).

Zytech also has the technical expertise to audit the co-location facilities that includes optimum operation temperature, infrastructure maintenance and the cyber security aspect. Zytech also makes sure the ASICs in the co-location facility are not โ€œover clockedโ€ as it will reduce the machineโ€™s lifespan.

Apart from the mining advisory role, their stated mission is to help firms implement blockchain tech, tokenize assets, and get funding for their ideas. Today, the company focuses on assisting firms to gain traction in the US, Spain, and Latin America.

Enrique J. Zueco heads the Company as the CEO. He is a Blockchain Entrepreneur, awarded by Going On in Silicon Valley and founder of Zytech123 (US&EU). In the prestigious career, he has been highlighted in TVEโ€™s Entrepreneurs and Innovators.

To sum up

The future of profitability in crypto sector will depend on two main things โ€“ the latest ASIC miners and the access to cheap powers. Unfortunately, it is unlikely that cheap power is coming to the US and other western nations soon.

China and Russia are a great source of cheap electricity power and it makes sense to locate mining firms there. However, not everyone can move there to pursue the BTC mining endeavors as it carries risks. Zytech helps to select the best and most secure Colocation and Cloud Mining Facilities. If you are passionate about mining BTC, get the best advice from them to do it profitably.


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