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From Purchase to Liquidation: Managing a Mining Fleet's Lifecycle
Kaboomracks CFO Dustin Holden walks miners through auditing an existing fleet, choosing replacements, selling old machines and putting the proceeds to work.
Dustin Holden, chief financial officer of Kaboomracks, took the main stage at Mining Disrupt Miami 2021, held July 20 and 21, 2021, to talk about something most mining panels skip: what happens to the machines once they are no longer the newest thing on the rack.
Kaboomracks is a marketplace for buying and selling mining equipment, and Holden built the talk around the full life of a fleet. He started with an operator that is already running, in a building, a container, a basement or a garage, and said that is the moment to be honest about the hardware. As he put it, "now is the time to be honest with yourself what is your equipment status."
His checklist was blunt. Are the racks full of T1s, S9s or Avalon 821s that are three, four or five years old? What revenue are they producing, what do they cost to run and repair, how likely are they to go obsolete, and have they paid for themselves yet? He noted that a big reduction in difficulty had lifted revenue for older machines, which made those numbers worth rechecking.
From there he moved to the upgrade decision. Is a move to S19s or M31s a financial call, an opportunistic buy that adds hashrate, or a strategic one, selling old gear while it still has salvage value? He walked through sourcing, whether direct from a manufacturer, from a private seller or through a broker, then cash flow, then delivery, which for his firm often means shipments from China, Europe and elsewhere. Operators also have to choose between a wholesale swap, shutting the whole mine down and replacing everything, or an incremental approach, swapping ten, fifteen or a hundred machines at a time.
Then comes the old equipment. Holden was candid that most miners a couple of years old are in rough shape. The way to protect their value, he said, is to show they have been running well, with good boards, no overheating and decent efficiency. A good broker, in his telling, can test, repair and consolidate equipment and has the space to do it, which is what Kaboomracks does at its facility in Phoenix, backed by a sales network to move gear on time and for the best price.
Finally, the proceeds. Holden suggested three uses: buy bitcoin with the cash, pay off a loan taken against bitcoin, or cover power, labor and rent so the operation can hold on to the coins it mines.
The full story is on Mining Disrupt at miningdisrupt dot com, and many more like it play around the clock on Bitcoin Radio.