Ethereum update: An Exciting Opportunity to Lose Money with Duck Farm Mining Group
I listed a rig for sale on craigslist and I got contacted by this mining group. Here’s a copy of our correspondence.
TLDR; They aren’t interested in clients who do math.
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Email 1:
**If you are interested in hosting GPUs** for mining Ethereum with DFMG, below is a quote breakdown for a 1060 6GB (our recommended gpu model):
DEPOSIT STRUCTURE:
All deposits are for 6 months.
GPU 1060 6GB – 95W x1
· $6.50/mo – Electricity Deposit per gpu
· $6.50/mo – Storage Deposit per gpu
FEE STRUCTURE:
All fees are one-time.
· $25 – Installation per gpu
· $50 – Components per gpu
GPU 1060 6GB:
Electricity: 6.50 x 6 mo = 39 x quantity (1) = 39
Storage: 6.50 x 6 mo = 39 x quantity (1) = 39
Installation: 25 x quantity (1) = 25
Components: 50 x quantity (1) = 50
**TOTAL: 153**
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My response:
Hi _____,
Check my math and let me know if this seems right to you:
Total Fee for 6 Months ($153) / Current Profitability of a 1060 ($0.80/day) * 95% = 201 days and some change
Assuming you can pay monthly after your first 6 months It will be another 17 days or so before a hosted contract begins to pay you profit after you pay for another month’s electricity and hosting ($13).
So after ~218.5 days you’ve paid off the hosting costs to date
A 6GB 1060 is going for ~$250 used at the moment.
Cost of the card ($250) divided by their profitability ($0.80/day) * 95% = 329 days
So, purchasing a 6gb 1060 to send to you to host until it was profitable would require the time to pay off the hosting (201 days) plus time to pay off the card (329 days) plus time to pay off the additional monthly charges required for reaching profitability = 1035 days before there’s a profit on both hosting and card purchase. If I began hosting with you in July of this year, it would be **May of 2021** before Day 1 of profitability on my purchase.
It’s possible I’m mistaken and the 95% is just a balance threshold and you aren’t keeping 5% AND both the miners and pools you are using have 0% fees. If that’s the case then Day 1 of profitability of a contract and card purchased in July would be **January 2021**.
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Their response
Hi Evan,
The main issue is using US dollars instead of ETH quantity to calculate ROI. We have no control over the markets and cannot guarantee when an ROI will be hit. We can only calculate how many Ethereum coins will be mined based off of the current block reward. The value of ETH in USD is variable and as you know is constantly changing, therefore the most accurate mining outcome must be calculated in ETH quantity.
A $600 1080TI model will mine 1 whole Ethereum coin in 1 year. Two $300 1060 models will mine 1.2 Ethereum in 1 year. A 1080TI model also uses more electricity than the 1060 models. This is why 1060 models are recommended.
We take “Deposits” for the Storage and Electricity based off our $0.065/KwH rate. If the miners do not use the entire deposit, the remaining balance can be applied towards the next 6 month deposit or returned. At this time we do not offer month-to-month hosting agreements.
DFMG does payout 95% of the Ethereum quantity mined to each client, drastically higher than any of our competitors. A 1% third-party pool fee is applicable currently, though the Duck Pond (DFMG’s own pool) has a target launch of December 2018 that will feature as close to 0% pool fee as allowed.
I hope this provides you with a better oversight of how Duck Farm operates and if there is anything else I can help with please feel free to reach out anytime.
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My Response
If two $300 1060s will mine 1.2 ETH in 1 year
And for that year you’ll charge 12 months storage (2x12x6.5) plus 12 months electricity (2x12x6.5) plus components (2×50) plus installation (2×25
Then the total cost for 1.2 ETH will be $1062. At today’s prices that would mean that, in one year’s time, my 2 1060s would need to be worth at least $486 or 81% of their current value for me to break even.
Probably your 1.2ETH estimate for a year didn’t include your 5% take. If that’s the case my 2 1060s would need to be worth at least $514.80 or ~86% of their current value for me to break even after 1 year.
That’s all assuming it actually mines 1.2 ETH.
Why are you more confident in predicting how much ETH you’ll be able to mine with a given card than how much USD you can expect? Difficulty and ETH price affect the profitability of the cards in both ETH mined and USD generated.
$6.5/mo electricity plus 6.5/mo storage on a 1060 which pulls max 90W on the power hungrier algorithms looks to me like ~$0.20 per kwh. At that rate, your first 6 months deposit should pay for nearly 18 months of hosting, no?
Also, a 1080ti should be doing 50mh/s on ETH. Are yours not?
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Their Response
Mr. Evan,
Thank you for your time and consideration.
Best wishes,
_____
Director of Operations
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Note after a re-read: probably should have said $0.80 “revenue” on a 1060 instead of “profitability”
About Ethereum
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third-party interference.
Author: probably-evan
Score: 4
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