$46k Spent on Mining Hardware: What Happened Next?

In March 2014, Dario Di Pardo wrote about his experiences having spent around $46,000 on a number of mining rigs and suffered from delays, poor communication from manufacturers, frustration and yet more delays over the five months since the investments were made.

In part two of the series, he brings us up to date on his orders, and tells us which are the companies that come up with the goods and which are the ones to avoid.

Vendor: Black Arrow

Product: Prospero X-3 (2 TH/s)

Price including shipping: $4,978

Order date: 18th Nov, 2013

Anticipated shipping date: 24th Feb, 2014

Expected delay: 2.5 to 3 months

A new progress update on 28th April tells us that shipping of Black Arrow's Prospero X-3 is anticipated to start on 8th May.

Considering the tight schedule and amount of work that still has to be done according this update, I can't help but be somewhat doubtful about the target date mentioned. I sure hope they can pull it off, though.

The compensation Black Arrow has been offering to its customers for late delivery was also recently updated: instead of the originally offered 25% extra hashing power in the form of free cloud hashing for a period of six months, customers are now being offered 50% extra hashing power by means of more powerful hardware.

In my case this would mean receiving equipment rated at 3 TH/s instead of 2 TH/s. While this sounds great, there is also a catch.

Customers would have to buy an extra heavy-duty power supply and pay for additional shipping costs to make use of this hardware boost. The price of the power supply, which can be bought directly from their store, is unknown at this point.

Although appreciating this offer, I share the feeling expressed by most other customers: compensation isn't exactly compensation when you have to pay for it.

Vendor: HashFast

Product: Sierra (1.2 TH/s)

Price including shipping: $6,696

Order date: 18th Nov, 2013

'Guaranteed' delivery date: 15th Feb, 2014

Expected delay: 3 months

Status: Refund requested on 1st April

After HashFast missed their second delivery deadline of 31st March, I decided to apply for a refund of my order.

In addition to the long delay, the decision was largely based on the fact that I had lost confidence in the company. Setting new deadlines without explaining why the previous ones couldn’t be met, poor customer service and negative public perception all contributed to this.

Since I sent a refund request by email on 1st April, customer experience hasn't improved.

The day after I filed the request, I received an email containing a link to a document to be signed digitally in order for the refund to be processed. This contract however contained numerous complicated and, to me, unnecessary terms and conditions.

After careful consideration and seeking legal advice, I decided not to sign it. Instead I sent a refund request reminder both by email and registered letter on 11th April. These missives, along with further emails I've sent to HashFast since, all remain unanswered to date.

Perhaps in an effort to turn the (possibly sinking) ship around, HashFast recently made a public apology to its customers. Hopefully we will see these good intentions put into practice soon.

Vendor: Virtual Mining Corporation (VMC)Product: Fast-Hash One Platinum Edition (1 TH/s)

Price including shipping: $6,479

Order date: 24th Nov, 2013

Anticipated shipping date: January 2014

Expected delay: 8 months

Status: Refund requested on 10th January

In the meantime I am still waiting for the third refund cheque from VMC to arrive, and hopefully this time it will be signed and properly filled in.

The fact that the previous two cheques weren't, may be no coincidence after all.

Allegedly, the company put a great deal of customers' pre-order money in Mt. Gox and consequently lost it when the exchange collapsed. If true, this could have caused the delay in refunds.

In April, VMC's custom-built mining data centre went live – populated with rigs made up of ASIC chips bought from HashFast and boards manufactured by VMC itself using HashFast’s reference design.

The Fast-Hash One Prospector card (512 GH/s), which they have in stock at the moment, is constructed with the same components.

Using the data centre's income, supposedly they have started to send out refunds in bulk as of mid-April.

Just recently, Wood Law Firm opened a case against VMC and its subsidiary AMC about the delay in delivery and refunds. Affected VMC customers as well as disgruntled shareholders of AMC can contact the firm about this investigation using the online form provided.

Vendor: BitmineProduct: CoinCraft Desk (1 TH/s)

Price including shipping: $5,758

Order date: 28th Nov, 2013

Anticipated shipping date: February week 1

Actual shipping date: 2nd April Delay: 7 weeks and 2 days

Status: Delivered on 7th April 

With a delay of almost two months, the hardware was shipped and arrived at my doorstep on 7th April.

I received one box containing a properly packed CoinCraft Desk 1 TH/s, as well as a second one containing a 0.4 TH/s Desk, which came as a result of Bitmine’s Customer Protection Plan.

Configuring the miners was as easy as 1-2-3. After I specified a mining pool in the configuration screen, the 400 GH/s miner quickly reached its advertised hashing speed.

The 1 TH/s Desk however, was initially underperforming, because only three out of the five installed modules were recognized by the firmware.

After opening the case and carefully inspecting the machine's organs, I noticed two modules were not properly attached to the backplate. After reattaching the modules, the Desk promptly went hashing at the expected speed of around 1 TH/s and has been steadily doing so ever since.

After I configured the miners to run in turbo mode, the increased hash rate displayed on the control panels unfortunately wasn't reflected at the mining pool.

When contacting Bitmine about this, they were very helpful and sent temporary instructions on how to address the issue. This involved increasing the voltage of the modules by entering specific commands from the Linux shell. A new firmware release on 25th April renders this procedure unnecessary and fixes some other issues as well.

In turbo mode, the miners are achieving a maximum performance increase of about 20%. For the 1 TH/s Desk this means hash rates up to 1.2 TH/s, which isn't bad at all, but doesn't quite live up to the advertised speed of 1.5 TH/s.

After a 26-day period, both rigs combined coughed up about 2.5 BTC.

No genius is needed to predict whether these rigs (or any other in this list for that matter) will ever give a return on investment – the bitcoin price would have to significantly increase or difficulty would have to stabilise for that to happen.

Vendor: KnCMinerProduct: Neptune (converted to 3 TH/s Jupiter)

Price including shipping: $10,175

Order date: 7th Jan, 2014

Anticipated shipping date: Q2 2014

Actual shipping date: 29th April

Delay: None

Status: Delivered on 30th April in broken state

On 8th April, KnCMiner published a news update for Neptune customers, which I also received by email.

It simultaneously presented an offer for the first 400 customers to apply to convert their existing Neptune order to a 3 TH/s Jupiter order instead.

Although choosing this option would mean getting a miner based on 28nm ASIC chips instead of the more advanced Neptune which sports 20nm chips, it would also mean early shipment starting in late April instead of June (and in my case as a 'batch two' customer, the end of June).

After weighing early delivery and additional setup costs (the Jupiter requires an extra 1,200W power supply) versus enhanced power efficiency and possibly increased performance as well, I took a chance and applied for the switch.

A few days after shipment of the Jupiter 3 TH/s started, which was on 22nd April. However, the company announced it was experiencing logistic issues that led to the rigs to arrive at their destination mostly broken and thus unusable.

Because my order was shipped after this issue was identified, I received the miner on 30th April in a revised package, which was basically in the form of a DIY kit.

To my frustration, I quickly realized that the new packaging method had also failed, and seven out of the 18 boards turned out to be physically damaged.

Even worse, it looked suspiciously like some components had already been used before, as I could see some stains of thermal paste on the chips and coolers, while some boards still had some dust sitting on them.

The same day I contacted KnCMiner about the damaged boards. The answer they came up with two days later was that a return merchandise authorisation (RMA) would be issued for the faulty boards in order for me to send them back and get replacements.

From this I can only conclude the company is, at least in my case, not living up to its own public statement from which the following is an extract:

As I am now left with a possibly secondhand, half-working miner and considering the time – which was the only determining factor in this Jupiter deal – needed to return the boards to KnCMiner and wait for replacement boards, this is turning into a very bad $10,000 investment.

Additionally, finding out that Neptune customers who accepted the Jupiter deal wouldn't benefit from the later announced performance upgrade, leaves me disappointed in KnCMiner, even though this was the company I had the highest hopes of.

Vendor: Alpha TechnologyProduct: Viper (Scrypt) Miner (90 MH/s)

Price excluding shipping: £5,450 ($8,984)

Order date: 10th Jan, 2014

Anticipated shipping date: July 2014

Expected delay: None

On its way towards completing the tape-out of the company's scrypt ASIC chip, Alpha Technology is feeling the pressure from its competitors.

One heavily-armed opponent would be KnCMiner, currently taking pre-orders for the Titan, a 300 MH/s scrypt miner priced at $9,995.

As a consequence, Alpha Technology is, instead of further increasing the performance of its miners and so taking the risk of compromising delivery dates, offering its early customers some alternative bonuses, in order to give them the best value for their money.

They include free cloud hashing for a yet undetermined period, free shipping and a 10% discount on a future purchase.

Vendor: CoinTerraProduct: TerraMiner IV (2 TH/s)

Price including shipping: $6,569

Order date: 12th Jan, 2014

Anticipated shipping date: May 2014

Expected delay: None

Well, I was quite shocked when hearing CoinTerra started shipping the TerraMiner IV (1.6 TH/s) from stock on 15th April at a discounted rate of 20%.

This implies customers placing an order three months after me are not only getting their equipment (much) sooner than I will, having a May batch pre-order, but they are also paying $1,200 less.

While digesting this news, I assumed – also because at the beginning of April the company managed to boost the performance of the miner’s new prototype to 2 TH/s – I'd at least be getting the enhanced 2 TH/s version in May.

The mail I received from CoinTerra on 24th April (nine days after they began shipping from stock), quickly shook me out of this delusion, as these excerpts will reveal:

TerraMiner Early Shipping Notification: IMMEDIATE RESPONSE REQUIRED

Dear CoinTerra customer,

Now that we have begun shipping from stock, many of our pre-order customers have asked if we would be able to ship their May orders immediately, so we are pleased to announce that we have started preparing the May batch of TerraMiner IV’s for shipping a month early.

This batch of TerraMiners will ship at the same performance as the January-April units, which is approximately 1.6 TH/s – the fastest standalone Bitcoin miner available in the world today.

The ~2 TH/s revised specification TerraMiner that we recently demonstrated in prototype form is currently expected to enter production in late spring/early summer but the production schedule has not been finalized.

Please respond to this email and include your CoinTerra Order ID(s), confirming that you wish to accept immediate delivery of your order as detailed above.

I sent a response the same day, saying that I would accept immediate delivery of the 1.6 TH/s miner if at the very least I would get refunded the same discount that was being applied at that time, which only seemed fair to me.

Displeased with the situation, and because they gave such a blurry shipment date for the 2 TH/s revised miner, I additionally asked them to cancel my order if this discount was not feasible. Twelve days have now gone by without any response from CoinTerra.

Well, that’s not entirely true. After I had sent two additional mails in the meantime to ask for feedback regarding this matter, the company did send me a repeat of the 24th April email, completely ignoring any communications I had sent them meantime.

If this wasn’t enough, on 28th April, the company announced further discount on the TerraMiner IV. You can get it now, shipping immediately, for $3,799 – that is $2,200 less than I paid for it.

Being a Mt. Gox victim myself and being taken advantage of by numerous mining hardware companies, it’s hard to admit that you still believe in bitcoin. Well, I still do.

Miner's silhouette image via Shutterstock