Single Owned Rural Miner Networks(SORMN) were explained in an earlier blog post where an entity could place miners in an area they own or lease, and have a network of hotspots that provide proof of coverage among themselves to generate revenue. This is a follow-up to that article highlighting a smaller part of our case study focusing on a cluster of isolated miners on a flat terrain. This article hope to capture the real world performance of set of miners and their revenue generation in the Helium network through the participation in PoC(Proof of Coverage).
Key information relevant for the analysis:
- These hotspots are at isolated from a larger continuous network and only witness beacons off each other within the vicinity.
- The miners appear to be independently own and doesn't seem to have any predetermined order to location assertion(Hotspot locations are random).
- Publicly available metric such as witnesses and 30Day(30D) earnings are used to compile the data.
- The degree of actual optimization of the hotspots(use of an outdoor antenna, enclosure or use of tall masts) are unknown.
IMPORTANT-This is an analysis based on performances at current time, and do not guarantee the same rewards or results. This article can be taken as a general study on rural miner networks to get an idea of rewards and ROI(Return on Investment). These kinds of endeavors which are dealing with speculative markets such as cryptocurrency have significant risks associated with them. Make sure to never over leverage yourself!
- The land is flat and surrounded by hills.
- The area have large building and structures scattered around.
- low to medium level of foliage.
- This location is a cross between a suburban and semi-urban terrain.
Figure 1 - Map of the area under study.
As seen on figure 1, the hotspots are located within a 90 square kilometer area. There are 48 hotspots with location asserted to this location, however there are only 28 of them active and participating in the PoC.
| Data on the Location
|Total Number of Miner
|Miners with good activity
|Size of the region
|Size of a Res8 hex
|Approx. number of Res8 hexes
|Capacity to keep RS = 1
|Average monthly Earning of 28 hotsposts
Table above shows the general data on the location. As shown the area of 90 square kilometers(9000 ha or 22000 acres) is under utilized since there are only 28 miners in this area. Keeping the rewards scale 1, there can be maximum of 50 active hotspots in this location, successfully providing PoC, there can be even as much as 100 without rewards scale reducing to under 0.75. The average monthly earning of the 28 hotspots are 13.86 HNT and they have an average of 9 witnesses.
If the 28 spots were analyzed for the earning and number of witnesses they have an interesting trend can be seen.
Figure 2 - Hotspots in the Increasing Order of their Monthly Earnings.
The number of hotspots with the lowest number of witnesses show the lowest earnings, while the hotsposts with the higher number of witnesses show better earnings. Now it is very important to know that witnesses get accumulated via the 7 day rolling average based on the beacon responses one's hotspot sends out. While beacons don't earn significant rewards currently in the Helium network(hotspots earn the lion share of their rewards from witnessing other's beacons), the larger number of witnesses by miners is an indication of good coverage which then translated to how easier to get witnessed and witness other hotspots. So this proved the well know secret in Helium network, better coverage you provide, better you earn.
Another key piece of data in this analysis is the median number of witnesses and 30D HNT earnings are 14 and 16.1HNT respectively. However, the average witnesses and 30D HNT earnings are 9 and 13.9HNT respectively. The average being lower than the median suggest severe under performance by the low earning hotspots which indicates poor placement of the low earning miners.
The hotspots 10,12,15,17,18 and 25 have an interesting similarity. They all earn higher than the average 30D HNT earnings but they have lower witness count than the average witness count. This is an indication that these hotspots witness others well, but their beacons do not get witnessed by others consistently and effectively. This may be attributed to the use of improper antenna for the location which causes these hotspots to send out beacons that probably overshoots other hotspots close by. Improvements to those miners can further increase the earning potential of the area to it's maximum.
Figure 3 - Heat Map of Hotspot locations Indicating the Witnesses and 30D HNT earning.
Looking at figure 3, there are few key observations; There are high earning hotspots spread all over the map - indication that within this 22,000 acres, 28 hotspots can be comfortably placed to witness each other well. The concentration of hotspots on the left side of the terrain indicate that there is the possibility of obtaining the same results as here but with less extend of land use. Left side of the map have over 60% of the miners with close proximity, this shows these 28 hotspots could be placed in an area of about 11,000 acres(4500 ha) to obtain similar results. This can be compressed to even smaller land sizes paying attention the placing two hotspots per res8 while making sure the hotspot limit for higher Res doesn't get passed(this require some analysis to determine what is the smallest land size needed).
This isolated cluster of hotspots are a great case study for SORMN and provide real world insight on connectivity, witnessing and earnings. So what are the take-a-ways from this case study?
- 28 miners could utilize less than 11,000 ha and obtain similar or better results.
- There are significant improvements(such as better antennas, better outdoor setups and increased height) that can be done on these hotspots to improve the witnessing and beaconing which could push the monthly earnings upto 16-18HNT per month per hotspot.
- An isolated group of miners can self-sustain to generate profit providing PoC.
What are the average monthly earning if someone deploy a SORMN just like the one in the case study?
If a single person owned all these 28 miners that totals to a monthly income of 388.08HNT. As of writing HNT trades at $21.80 which would mean an income of $8460.14 per month can be obtained by this kind of a network. With improvement to the hotspots to better witness and beacon the monthly income can be increase upto 504HNT(18HNT per month per hotspot) which is $10,987.20 per month.
What's the initial investment for an optimized network?
Cost of Miners (28 units) = $600 x 28 = $16,800.00 (assumed miners are $600 including shipping and duty)
Cost of Outdoor conversion kits = $250 x 28 = $7000.00(This is for the outdoor enclosure, outdoor antenna, cables and PoE)
Mis. expenses and labor = $200 x 28 = 5600.00
Cell modem or MiFi = $150 x 28 = 4200.00
Total investment = $33,600.00
Data plan = $55 x 28 = $1540.00
Mis. maintenance = $100 x 28 = $2800.00 (This can be electricity or payment to a host)
Total monthly expense = $4340.00
So what is my ROI?
Based on these analysis the on this data, the monthly income after expenses would be:
Monthly income = $10,987.20 - 4340.00 = $6647.20
Time to break even = $33,600.00/$ 6647.00 = 5 months
Break even point can be achieved faster by eliminating the data plan needed, instead by getting internet from the host.
The analysis of these 28 hotspots provide a convenient case study to observe the monthly return that can be expected from a SORMN network of small scale. It was observed a similar performance can be obtained from placing the hotspots on 11,000 acres of land(size of a small town). The real world data indicate a return of $8,460.14 per month for the 28 hotsposts, however this does not count for monthly expenses. For an optimized deployment of 28 hotspots in a similar area, the initial investment will be about $33,600.00 with a monthly expense of $4,340.00, which would provide a return of $6,647.20 per month($10,987.20 monthly income minus the $4,340.00 monthly expense). The break even point for the investment would be around 5 months and further efforts can be taken to lower the initial costs.