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The end of Super Cheap Budget Hosting? Or the precursor to a new beginning?
randvegeta
Member, Host Rep
We live in crazy times it seems. Crypto currencies are in a massive bubble but given the relative liquidity and ease of mining, one wonders if the crazy cheap (LES) deals are going to be sustainable or desirable in the near future.
Of course BTC mining requires ASIC and most coins are best mined with GPUs, but a few hashing algorithms are okay for CPUs.
It makes very little sense to actually buy servers for the purpose of mining, but if you already have the hardware, and available power then it's kind of a no brainier. But it seems to me that the lowest budget VPS may soon be less profitable than straight up mining.
Ok, gross revenues will always be higher selling VPS, but it usually comes with more work in the form of tickets/sales/maintenance etc. Mining on the other hand can be left to run on it's own and minimal losses in the event of downtime (1 full day = 3% lost revenues in a given month). You also don't need massive amount of IPs or bandwidth.
So once you consider the cost of staff, IPs, bandwidth, hard drives! and other overheads, perhaps mining starts to make more sense, and this may have implications for the low end VPS market.
Only servers running hardware **completely **unsuited for mining would be available (think Xeon L5520s!).
On the other hand, if/when this bubble bursts, this may result in a whole bunch of new servers becoming available, making for some super cheap VPS or indeed Dedicated Servers available.
Or am I completely wrong and all the cheap crap is already running on the oldest and crappest of hardware like Xeon L5520s?
Comments
TL;DR: Maybe we should vCore mining and cut out the middleman.
Everything is a bubble. Internet is a bubble. We've just gone from the first to mainstream. Eventually it'll just become a commodity- or be regulated to the point that only a strange few are on it- much like it was 25 years ago. Crypto mining? I doubt it will last as long.
Not everything is a bubble. Prices on many things rise not because of speculation but because of a genuine increase in demand due to a genuine need.
Housing in the UK suffers from chronic shortages. It's not fair to say that the UK housing market is in a bubble simply because the price rises in real terms. And by bubble I mean where the asset price increases beyond any logical reason other than people speculating the price will go up!
Because commerce didn't exist before CryptoCurrency.
Oh. Well, I guess we're talking about different bubbles, then.
What do you mean by bubble?
Superficially inflated worth.
In the medium-long run, all of these things should balance out. In fact, in the long run, mining profit should reach equilibrium, and hardware production will also reach equilibrium, at which point due to increased economies of scale and demand, it may actually be MORE profitable to sell LEBs than it was before, due to lower hardware cost.
bubble?
@randvegeta I honestly think that lately you have been drinking too much of that crypto kool-aid.
This is just a sweet spot at the moment, it'll go away. Difficulty is low enough with a specific type of crypto that CPU mining can compete and pricing is high enough that you can turn a profit on some processors.
Difficulty will continue climbing and it won't be profitable anymore on commodity hardware.
The housing market in China is a bubble and not in the same time, same in UK.
For example, in Beijing and shanhai, the price per sqm is insane, while in other places we have full ghosttowns.
Same with cryptcurrencies, the demand for bitcoin is huge, while Dogecoin not so much.
Same the stockmarket, etc, but this does not reflect the value of those things, but the increased availability of cheap credit, if interest rate is practically 0, anything that increases value is a good investment, you pocket the difference, so anything that can be invested in will be, it will all come down when credit will not be free anymore.
Why do you say that? I hate crypto and hope it crashes, Burns and disappears forever. But given the relative ease of accepting, mining and converting it, I don't see any harm (as a biz) dabbling in it.
My point is, at the low end, it may very well be more profitable to mine than sell hosting.