This real estate investor has a side hustle mining more than $110,000 in bitcoin every month

Compass Mining customer Eng Taing

Eng Taing

Eng Taing is in the business of making money.

He runs his own private equity firm with $250 million in assets under management ( according to his website ), invests in real estate, has worked in data science and analytics at Apple — and he got into bitcoin back in 2013, well before it was popular to make even a passive bet on the crypto asset class.

Now, Taing runs 261 personal mining machines generating the world’s most popular digital token.

“I just like making money,” Taing told CNBC.

“I invest in a lot of things. I have a lot of apartment buildings, I have senior living homes. I have GPU mines,” continued Taing. “I just like to look at where I can get some good arbitrage advantage, and I thought bitcoin mining presented that both from just, ‘Hey, I could get more bitcoin by having miners than buying bitcoin, especially at the scale that I can get into it — but also, that I am a big believer in bitcoin’s future.’”

Bitcoin operates on a proof-of-work mining model, meaning that miners around the world run high-powered computers to simultaneously create new bitcoin and to validate transactions. The process requires expensive equipment, some technical know-how, and a lot of electricity. Taing decided to outsource most of that work by enlisting the help of Compass Mining, a service that hosts, supplies, and operates mining rigs for retail miners who don’t want to deal with the logistics of physically handling mining equipment themselves.

So far, the experiment is working out pretty well, according to Taing. Of his 261 mining rigs, which include Canaan AvalonMiners, Bitmain Antminer S19 Pros, and Whatsminer M30Ss, 200 are hosted through Compass in Nebraska and Canada. They generate about 2.8 bitcoin a month, or about $111,000, according to digital receipts he provided CNBC.

Taing also earns income buying and selling mining hardware to retail customers on Compass’ marketplace. They typically buy one or two at a time and are not as price sensitive.

CNBC spoke to multiple Compass customers to better understand the appetite for small-scale mining as they increasingly compete with major industry players with massive operations. But Compass CEO Whit Gibbs says that’s exactly the point: To capture market share for retail miners and put the network into the hands of the people.

“It will effectively give small miners a substantial share of bitcoin’s network hashrate, which has ultimately, always been our goal,” said Gibbs. “We want to get 5% of the network being controlled by retail miners, and then move that up to 10% to 15% in the coming years.”

Gibbs says he’s noticed a lot of people who would normally invest in real estate are instead bringing those dollars to mining, because they’re able to see a faster return on mining than they would if they were buying a rental property, especially as private equity steps in to buy houses and drive up prices.

Eng Taing evaluates an ex-GM plant to repurpose for bitcoin mining.

Eng Taing From mining ‘plebs’ to billionaires

Compass clients range from self-proclaimed “plebs,” who stack the smallest denomination of bitcoin known as satoshis, or “sats,” to billionaire bitcoiner Jack Dorsey.

One of those plebs is Jon McClellan, a Texas based lobbyist for AT&T. He currently has a single bitcoin miner with Compass in Oklahoma, which he purchased at the end of 2020. For him, the desire to mine is part ideological, part financial.

“I wanted to do my part to secure the the bitcoin network — have my own hashrate, under my own power,” said McClellan, referring to his share of the collective computing power of miners worldwide.

“I knew that if I buy a miner, I’ll be literally buying bitcoin every day, every minute, every second, every hour, regardless of what’s going on in my life, budget-wise,” continued McClellan, who calls the process an “easy way to dollar cost average into bitcoin.”McClellan says Compass was the only retail mining company that seemed accessible for the average person. Compass Mining allows customers to buy (new or used) mining machines for between $4,500 and $25,800 on their website, then locates them in partner data centers and takes care of the physical logistics and subsequent maintenance.The return on investment for personal mining varies based on a few key factors, including the upfront cost of buying gear, the number of mining machines you’re running, the cost of electricity and hosting, plus pool fees, which allow a single miner to combine their hashing power with thousands of other miners all over […]

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