This is a crazy story. I don't know if I buy it, but it sure makes solo mining sound exhilarating.
There is a guy on Reddit with the username EightofSpace. He lives in a regular house. He has a small collection of Bitcoin miners sitting in what looks like his living room. In the last seven months, he has done something the entire mining industry says should be nearly impossible. He has found two Bitcoin blocks. Solo. By himself. With two completely different Bitcoin home miners.
Here's a quote from EightofSpaces's original reddit post:
Last night i was checking my rig and notice a large difficulty of 2.08 P and under it, it said i found a block. I was super excited and nearly trip running to the wife. I checked my wallet and bam, see the massive transfer in you see there. I dont trust large money in my wallet so i promptly transferred it and will cash out asap. I am paying off my mortgage.
Ever since btc went from 60k to 120k i had to get in but had no money. Man i really got lucky, like freaking lotto like here. The block is 920440 and it was on my own private public pool running on a umbrel home mini pc. I wont say anything else about miners cause some people say i am trying to advertise, no sir, i just needed to tell someone, anyone. I will owe 158k in taxes. Nothing i can really do about that unfortunately.
You gotta feel for the guy. Sounds like one heck of an adrenaline rush.
At the time of his first block, the entire operation was producing about 120 to 130 terahashes per second. Compared to the global network, that is roughly one ten-millionth of the total guessing power. One in ten million. To put that in perspective, your odds of being struck by lightning in a given year in the United States are about one in a million. He had ten times worse odds than that of finding a block on any given attempt.
Seven months later, at block height 948,146, it happened again. EightofSpace posted the following screenshot on reddit:
From the SoloSatoshi article:
The math is brutal. The Avalon Q on its own, at 90 terahashes per second, has roughly a 1 in 10.5 million chance of finding any given block. The chance per day is 1 in 73,170. The chance per year is 1 in 201. Even running 24 hours a day, the expected wait for one Avalon Q to find one block is around 200 years. For comparison, your odds of winning the Powerball with a single ticket are 1 in 292 million, meaning his Avalon Q has roughly 28 times better odds of finding a block than a Powerball ticket has of winning. He still beat those odds. Twice.
The next halving is gonna be in 2028.
🤦
The "$158K in taxes, nothing I can really do about that" line is the part of this story that's actually instructive.
He's not wrong. He's stuck. And the reason he's stuck is the part nobody talks about until it's too late: solo home mining sits squarely inside the hobby loss rules. IRC §183. If you're not operating with a real profit motive: separate books, business plan, the whole posture, the IRS treats your mining as a hobby. Block subsidy is still ordinary income at fair market value the day you mined it. But your electricity, your rig depreciation, your internet, none of it offsets that income. TCJA killed the old miscellaneous itemized deduction path in 2018. So hobby miners owe tax on gross, with effectively zero deductions. You can't just file a Schedule C after the fact and call it a business if the facts don't support it.
The cleaner setup is hosted mining inside an LLC with a real profit motive on paper from day one. Hosting invoices, books in QuickBooks, the works. Block subsidy still hits as ordinary income, but now it lands on net, not gross. For a small operator that's the difference between a tax bill that wrecks you and a tax bill that works with your accumulation strategy. Albeit, the major tradeoff is privacy.
Happy for the guy though. Hell of a story!
Are the number of solo mined blocks so far higher than they should be statistically or are they in the margin of error ballpark?
Would be interesting if it turns out that for some unknown reason solo miners had a small hidden advantage that caused them to get more blocks than the math led us to believe (/endcope)
I don't know that there's any way we could know. I mean if you are mining on your own, maybe we know about it if you are using a solo pool or something, but it's also possible that we never find out about miners working on their own until (and unless) they find a block (and say who they are in the coinbase).
Insane. Just completely wild. Looks like he uses HashWatcher and can confirm there:
https://twiiit.com/SoloSatoshi/status/2052489640137887751