BMN vs Compass

November 21st 2021 — Disclaimer: This is not investment advice

As someone who stumbled down the rabbit hole and is yet to find the bottom, I recently stumbled upon the potential to invest in Mining on a smaller scale. By now you might also have acquired some BTC and are looking to increase it even more by making an investment. Large corporations are entering the Bitcoin mining space and are investing staggering sums of FIAT to mine as much of the remaining bitcoin as they can. Mining research includes, among other subtopics, what Bitcoin mining means, how it has worked in the past, what the current market structures are, what ASICs are available and maybe most importantly how you and I as individuals can enter this industry and make a potentially promising investment. The investment amounts necessary, just 13 years after Satoshi released the Bitcoin whitepaper, can be daunting and might discourage individuals seeking to make a profit from considering Bitcoin mining. One might get even more discouraged when finding out about cloud mining scams and other types of mining-related investments that promise more than they can keep. Electricity costs in your part of the world might keep you from considering this as anything more than a very expensive but unprofitable hobby. All the while, decentralisation is at the core of Bitcoin. The more individuals take part in Bitcoins growing mining economy the better.

During my research, I came across the investment proposals of Compass Mining and Blockstream’s Mining Note (the BMN). From what I can tell these are among the most popular in the community and I have invested in both. This article is supposed to help and guide you in starting to understand the differences between the investment possibilities that Compass and Blockstream are offering. Complementary to this article, I will also share two Google spreadsheet templates, which can be used to modify to your liking. Similarly, I will leave the reader with a plethora of links to follow up on, that helped during my research. I will be reporting on the performance of my investments monthly, so feel free to follow along.


Don’t trust, verify! This is one of the most common mantras echoed in the Bitcoin community, and for good reason. Bitcoin is revolutionary, partly because for the first time humanity has access to money that needs no central coordinator to function. Everything in Bitcoin can be verified by anyone. Nothing needs to be trusted. Of course, not everybody runs their own node and stakeholders do trust parts of the network, but the important point is that this is not a requirement. This fact alone creates more trust in the network as the risk of being exposed is high.

Be that as it may, the same cannot be said for making investments. In general, when you make an investment you automatically subject yourself to some form of counterparty risk. In the case of mining investments, it is no different. To better assess the counterparty risk, I want to give you a brief introduction to the aforementioned companies and leave you with links to do some more in-depth research.


Blockstream was founded in 2014 by Adam BackErik SvensonPieter Wuille, and others. Their main mission is stated as follows:

We are long-time Bitcoin protocol developers who are convinced that finding an architecturally sound and permissionless way to extend Bitcoin is essential for cryptocurrency to reach its full potential. Bitcoin has inspired people since its inception as a new kind of money in digital form that exists independent of any government or institution. Bitcoin enables financial transactions without needing to trust any third party.

The full background of Blockstream’s founding story can be found on their website. Adam Back is the developer behind Hashcash and financial applications for Proof-of-Work. His developments have had a meaningful impact on the later development of Bitcoin and are cited in Bitcoins whitepaper as well. If you are interested in the history before the whitepaper was released, I can only recommend you read “The quest for digital cash” by Alex Gladstein.

Blockstream offers a range of products which include Hardware Wallets, Mobile Mining Units, Hosting Services, BMN and Blockstream Satellite. They are also meaningfully contributing to the lightning network and have developed a sidechain-based settlement network called the “Liquid Network”.

The company recently completed a $210 million raise to become a larger player in the manufacturing of ASIC Miners, which further decentralises this critical part of the bitcoins economy.

Range of products, which Blockstream is offering and working on.

Compass Mining:

Founded in 2020, Compass Mining is a relatively young company.

Their mission is stated as follows:

We are a bitcoin-first company on a mission to support the decentralized growth of hashrate and strengthen network security by helping more people, learn, explore and mine bitcoin.

The company was founded by White GibbsThomas Heller and Paul Gosker. Including the three founders, the company currently lists 11 employees on their website. The company is much more service-oriented as its product and its offerings are more directly designed for individuals to enter the mining business. Members of their team are very active on Twitter and try to engage with the community frequently. Compass hosts a larger Discord channel with hundreds of customers, support staff, sales managers, etc.

Discord Server Compass Mining

They even have a podcast available on all common podcast platforms, which is dedicated to proof-of-work mining. The podcast is the only one focussing on mining specifically and is therefore also allegedly the best podcast in that niche. I have learned a lot after listening to the episodes and can highly recommend it if you are looking to geek out a little about the granular details when it comes to mining.

Especially for the purpose covered in this article, I cannot recommend the following two episodes enough:

The ASIC Mining Hardware Market

The Finances of Bitcoin Mining

What Compass lacks in history as a company they successfully make up for in community engagement and education of their prospective customers.

Investment Products

Blockstream Mining Note:

The BMN is a registered security complete with registration numbers issued in Luxemburg and being sold via the security token issuer STOKRUnfortunately, this means that there is currently no way for US investors to own any BMN. On the website BMN is described in short as follows:

The Blockstream Mining Note (BMN) offers investors exposure to Bitcoin mining with the added liquidity of a security token issued on the Liquid Network. In addition to making it easier to participate in mining and lowering the risks for investors, the BMN also strengthens Bitcoin’s security and censorship resistance.

The offering is further explained by Adam Back and Samson Mow of Blockstream in this video.

BMN is a security token, which represents a certain amount of hashrate during a specific time period. It has been confirmed that after the current first series of tranches is completely issued there will be a second series in the future. Currently, the 7th tranche has just sold out on the platform at a price of €320.000 for 1 BMN. 1 BMN is the minimum investment on STOKR. As this is a high amount for smaller investors peer to peer trading has been enabled via a very active, friendly Telegram group, where people are trading OTC and the smallest investment denomination is 0.01 BMN. Of course, there is a small premium, but it is still worth it in my opinion. The price for 1 BMN in BTC terms has fluctuated between 4.25 and 7.25 BTC.

Before trading, you must definitely put some effort into verifying the reputation of the respective sellers to avoid getting scammed.

Because this has happened already here are some best practices to follow:

  1. Verify telegram usernames (!!!) — Click on the profile picture and verify the username behind the “@”.
  2. Verify references of sellers (find them via the search function in the Telegram chat. Search for “recommend”, “reference”, “trade”, etc.)
  3. Talk to customers. Buyers post references about sellers in the Telegram group
  4. Go for 0.01 BMN first, do not answer random DMs starting and ending with “hi”, or “hello”.
  5. Follow the best practice example (Be aware, OTC sellers have been scammed and will ask you to go first, if they have proven references in the Telegram chat. If they do, ask them for usernames of past buyers.)

This is a risk that exists before any secondary market platform trading is initiated. BMN is held in your AMP wallet, which is a special wallet designed to interact with digital assets on the Liquid network. Bitfinex recently announced that the security will be available for trading on their platform as soon as all regulatory issues are cleared. This will further liquify the market and remove scamming risks. The benefit that comes with the fungibility of the hashrate is key. Each BMN Token is equal to the next. Each represents the same exact investment and is interchangeable. This enables it to be traded fluently and makes your investment a lot more liquid than owning an ASIC directly. With the fungible token, the risk of a miner being faulty, or having technical issues is transferred to Blockstream. It is in their best interest to keep the uptime of their mining machines high to mine as much BTC per BMN as possible. You, as the investor, are protected against potential headaches because of prolonged outages, resulting from technical issues with your mining equipment. Trading a registered security token is far simpler than trading actual mining machines.

1 BMN in the current series of tranches represents 2000 TH/s of computing power hosted in the Blockstream facilities for 36 Months. This includes the cost of electricity and other operational expenditures. This is a key benefit, as there are no other payments necessary after the initial investment. The current series has been actively mining bitcoin for just about 5 months out of a total of 36. The OTC price for 1 BMN (2000 TH/s) at the time of writing hovered around 6 BTC or € 390.000. The note expiry date is July 7th 2024. On that date, the mined BTC is distributed according to investors holdings in their respective AMP Wallets. There is a nicely designed dashboard available, which reports on the currently mined BMN daily. It is important to understand that if you do opt for the BMN investment, you are investing in some mined BTC already. Currently, 1 BMN has mined 2.07 BTC.

BMN — How it works

More detailed information can be found on the BMN Page hosted by STOKR. They do an excellent job, of answering any initial question about this innovative investment approach into mining. Members of the Blockstream team and the community are happy to assist with questions, that go beyond this article. You can find them and myself in the Telegram group as well if anything is left unclear.

Compass Mining Hardware:

This approach is more direct. When you are considering an investment via Compass Mining, you are essentially buying hardware and hosting services from them. On their website, they have a range of hardware for sale. The range of miners they have available for sale varies almost every day, which makes a daily check for new hardware worthwhile. Similarly, the price for miners varies heavily as well. At the date of writing this article, a modern Antminer S19j Pro with 100 TH/s is priced at around $11,000 or 0.18 BTC. Depending on when you buy, you can get the same hashrate for around 0.16 BTC. It all depends on the timing. Since this article does not go into more detail on different ASIC Miners and how they compare please refer to this page as a good overview and starting point.

After you have decided on an ASIC miner, you must choose what facility the miner is to be hosted at. Compass is actively working on developing new mining facilities to host their customers hashrate at. Usually, the choice of where to host your miners is limited to a few facilities only. Compass purchases the ASICs from manufactures in bulk and tries to manage the capacity of their hosting locations.

Data about Mining Facility in Texas, US

The most important information here is the electricity price as well as the available date. Miners will never be instantly available to be hosted and hashing. There is a waiting period indicated for each miner on the hardware page. Once they are hashing, you need to cover the OPEX for the miner. This is basically the electricity cost needed to host the miner. The monthly cost is around $150 at an electricity price of $0.063/kWh ($0.063/kWh * 3,25kW * 24h * 30 days) for a miner with a power draw of 3,25 kW.

Offering for modern ASIC on the Compass Mining Hardware page

The above unit is available to go online for hashing on February 15th. This is important for the later RoI calculation. Important to note: This date is subject to change. While of course, Compass strives to keep their end of the deal, the fact of the matter is that there can be unforeseen issues. Currently, you can find news about supply chain issues and chip shortages every day. The ASIC industry is affected by this as well. Lately, there has been an issue with one of their sites, which has resulted in miners coming online much later than expected. It is to be hoped and expected that Compass learns from this going forward.

After you have chosen both the hardware and the hosting facility, it is time to pay the initial payment is for the selected hardware, the first month of hosting as well as a security deposit, which you will receive back. Payment is made in Bitcoin via the 3rd party provider coinpayments.

Compass has recently launched its marketplace. Customers, who have purchased miners can now list them for sale. This requires a KYC process. The great thing about this is that it makes the ASIC market on Compass a lot more liquid. When you are buying hardware from a “certified reseller” (existing Compass clients), prices are increased, but the date of the first hashes is much sooner, compared to buying a new ASIC from Compass directly.


As with any other product you buy warranty is an important point to consider. Warranty policies differ from manufacturer to manufacturer. The customer service of Compass is readily available to help you, should your miner face any technical issues. Bitmain’s offers 12 months of warranty. The 12-month period starts when the miner is picked up by Compass. You will receive the serial numbers for your mining machine, so you can verify the rest of the warranty period. It is imperative to understand that you rely on the help of Compass, should the miner need to be shipped back to the manufacturer for technical issues under warranty. For me, as an overseas customer, it is not a very viable option to have the miner shipped, to fix it myself after the warranty has run out.


Let’s get to the meat and bones. After all, you likely researched some or all of the above information already yourself, if you are remotely interested in this topic. In the end, one of the biggest factors, next to perceived risk, while making an investment decision is the expected RoI of your investment. In any case, you are buying a share of the overall hashrate in the Bitcoin network.

The current Hashrate is at approx. 160m TH/s — almost full recovery after the mining ban in China.

This means that in both cases your investment is heavily influenced by the following factors:

  • Current overall hashrate (and by extension difficulty adjustments)
  • Projected hashrate growth during your mining period
  • The BTC price
  • Taxes

Important to note is of course, that this is in no shape or form investment advice. Inputs are derived from the investments I have made. I will leave you with templates, so you can play around with the numbers yourself before or after you make a decision. I will compare both investment opportunities on a 100 TH/s level. Specifically, this means an investment of 0.05 BMN or the purchase of a Bitmain Antminer S19j pro with 100 TH/s. I have chosen to denominate my investment in BTC since the goal of my investment is to acquire as much BTC as possible. The investments produce a BTC cash flow. I refrained from noting FIAT conversions, although the BMN is sold for EUR since the conversion rates are subject to heavy change and thus would have an influence on the timeliness of the article. All FIAT conversions are available in the models, where they stay updated automatically.


This is the easier of the two calculations to make since the overall investment product is a lot simpler.

Here is a link to make a copy of the model. It was released by Toby Sharp the Telegram group. He put all the necessary calculations in place, so all credits to him 🙂 Here is the original.


  • BTC mined per BMN (automatically pulled from the dashboard and updated daily)
  • Average fees per block (can be found on the clarkmoody dashboard)
  • Projected annual hashrate growth (this value has the greatest influence on the outcome. I find calculating with around 100% the most reasonable)
  • Your purchasing price per BMN (this is calculated from the purchases you have made)
  • Held BMN (since this determines how much BTC will be allocated to your wallet at the expiry of the note. For further trading on bitfinex, this is also important information.)

Current conclusion:

As you can see in the dashboard, 1 BMN has mined over 2 BTC (or 33% of the current, average OTC purchasing price) already, after just 13% of time expired. Let’s run some numbers to estimate the total BTC mined at maturity with the assumption that you purchase 0.05 BMN at the current OTC Market Price of 6 BTC (0.3 BTC volume) and a variation in the average, annual hashrate growth (AHG) during the note duration since that is the dominant factor in the model.

Past hashrate growth:

  • Since the beginning of the year: approx. 15%
  • Compared to one year ago: approx. 21%
  • Compared to three years ago: approx. 300%

The current supply chain delays, chip shortages, shortage of rack space, shortage of skilled project developers able to design and execute on large mining facilities, shortage of cheap power sources and lead time to complete mining farms has to be factored into the assumption of AHG. This only further complicates an investment decision and offers a peek behind the curtain of various factors, which influence the mining industry.

Assumptions and projections from the model for 0.05 BMN:

  • 120% AHG, exp. BTC mined: 0.326 BTC, Surplus: 0.026 BTC
  • 100% AHG, exp. BTC mined: 0.345 BTC, Surplus 0.045 BTC
  • 70% AHG, exp. BTC mined: 0.386 BTC, Surplus 0.086 BTC
  • 50% AHG, exp. BTC mined: 0.425 BTC, Surplus 0.125 BTC

I personally do believe assuming AHG between 50% and 70% is reasonable. 1 BMN will then mine between 7.73 and 8.5 BTC. Because the BMN series started mining directly after the China mining ban and because of premarket discounts via OTC it is plausible to assume break-even well before the mining note expiration date.

Compass Mining

Since you are owning a physical miner there are extra factors, which play into your investment. This comes with a few key advantages and disadvantages A very important point that distinguishes an investment with Compass from the BMN is that you can resell the miner after your mining period. Let’s assume both a mining period of 18 months (1) with some resell value and a mining period of 36 months (2) after which we write the miner off. Miner value tends to appreciate and depreciate with BTC value. To keep it simple I will assume that I can resell the miner for 1/3 the purchasing price after 18 months. Also, I will keep the average BTC Price in USD static at $60,000 as it saves me the headache of trying to forecast the BTC price for OPEX expenditure and resell value. If you are denominating your investment in FIAT, make sure you add assumptions for BTCs increase/decrease in value over the ming period.

Here is a link to make a copy of the model for you to enter your own inputs.


  • Amount and type of ASIC chosen
  • OPEX Cost
  • Pool Fees
  • Degradation of ASIC (Influencing resell value)

1 (18 Months):

As with BMN your RoI is heavily dependent on the development of the network. Currently, 100TH/s mine an average of approx. 0.00055 BTC per day. If you buy a miner today it is likely to go online in May. Let’s assume that this will decrease to 0.0005 BTC in June of ’22 and to 0.0004 BTC in May of ’23 for the remaining duration.

After 18 months:

  • Mined: approx. 0.252 BTC.
  • Cost: 0.212 BTC
  • Miner Sell: 0.06 BTC
  • Surplus: approx. 0,1 BTC

2 (36 Months):

Same assumptions, except after October ’23 the reward drops to 0.0003 per day on average for the remainder.

After 36 Months:

  • Mined: approx. 0.414 BTC.
  • Cost: 0.25 BTC
  • Miner Sell: 0 BTC
  • Surplus: 0.164 BTC

These calculations factor in quite a few variables. I hope these calculations help you to estimate expected returns. Again, remember that the OPEX becomes likely cheaper if paid in BTC and that the resell value of a miner is hard to foresee. While it may become overall cheaper in BTC terms, the electricity cost at the facilities is subject to change. This is another important factor, that cannot be missed. Because expected returns are harder to calculate with compass, I would like to leave you with the following links to reduce the blur, while you forecast the future.

Personal Favourite:



As with any investment, you need to factor in taxes as well. I will refrain from getting into detail here since tax laws differ from country to country. I, for example, will have to pay a 25% tax on any surplus of the BMN payout. It, therefore, makes sense to factor that into the break-even calculation directly. If you are an expert on german tax law, feel free to contact me. Any information is appreciated.


When it comes to mining Bitcoin, pools play an important role. Solo mining will most likely result in you not mining any bitcoin at all. With the BMN you do not have the possibility to choose your mining pool. Blockstream has chosen “Slushpool” for their BMN product. With Compass you do. Since you own the miner you can also choose which pool you want to mine. At the time of writing, Compass has a promotion with F2Pool. Instead of the regular fee, you pay a reduced rate of 1.2%.

Building BMN with Compass

To further, directly compare the two investment opportunities it makes sense to “rebuild” what 1 BMN token represents with what Compass offers on paper. This might give you some more insight and one more differentiated perspective for a direct comparison. To do this yourself you can create a copy of the model. To do this you need to combine the cost for the BTC a BMN has already mined and will mine until the miners your purchase via Compass go online. Further, you need to add the hardware cost as well as the cost of electricity. As with the other models' assumptions have been made for the BTC mined daily, ASIC Costs, the efficiency of the miners etc. If we assume that the first hash date for your Compass purchase is 4 months in the future, you’d have to buy approx. 3.12 BTC (assuming daily BTC mined at 0.009 BTC for 1 BMN). Let’s further assume hardware cost at $100 TH/s and an electricity price of $0.063/kWh. The total amount you’d have to spend to reflect 1 BMN would be around $465.234 or €412.250. This might also be a good indication as to the “fair” market value that might establish itself with more liquidity on exchanges. That is pure speculation on my part of course. If you want to dig even deeper than this, there is an extended model with much more variables available. Just contact me, if you are interested.

Pros & Cons

As with everything there are always pros and cons. It is up to you to select the option, which is the most fitting for you. Here are a few pros and cons, that I saw and were important during my decision for allocation.

Pros and Cons — BMN
Pros and Cons — BMN


Tough decision. Overall my conclusion is that investing a part of my stack into mining makes sense, to grow it larger over time. Generally, you can assume a break-even in BTC terms anywhere between 9 -13 months, which is more than reasonable. I invested in a share of the BMN and purchased ASICs to host with Compass. In my opinion, the BMN offers a much better risk/reward ratio. The lack of direct ASIC ownership reduces many risks. Most importantly hardware risks and the possibility of delays in the timeline does not exist. Further, series one of BMN has already started, which means that greatly benefit from the hashrate dip caused by the China mining ban. This is a big deal (!). Further, you might be able to enter the market at a potential pre-market discount via the OTC trade before exchanges enable trading the BMN with a lot more liquidity. Unfortunately, US investors are excluded from owning any BMN due to regulatory reasons. However, the mining enthusiast in me has also made me purchase ASICs through Compass. The mining experience is purer since it comes with direct ownership of specific machines and all the advantages/potential issues that come with that. Being able to select my own pool and having direct access to the BTC I have mined in my hardware wallet as well as diving into the data my ASICs generate is very appealing and pushes me further down the rabbit hole.

Models (Links lead to the creation of Google Sheets copies):

Link to BMN Model (by Toby Sharp) // Link to Compass Model // Building 1 BMN with Compass Model

If you do not want to use Google Sheets, contact me and I will send you the respective file in .xlsx format.

BMN Telegram group

Final Words

Writing this short article made me rehash all the arguments and research I did over the last few months. There is a lot to go through. It was well worth it though since it made me understand the economics behind mining even more deeply, made me more bullish on Bitcoin in general and gave me confidence in investing parts of my stack to acquire as much BTC as possible through mining. A great conclusion is that there are multiple ways to get into the mining business as an individual with low perceived risk, which further helps to decentralise the ownership of hashrate. For those, who do not have the option to mine at home, Compass and Blockstream offer great alternatives.

Over the coming months, I will update you regularly on my mining progress with both Compass and the BMN to see if my assumptions were correct and what could’ve been improved during the modelling. Also, it might be interesting to follow me along my mining journey. I will be releasing the progress reports here as edits and on Twitter. Also, please let me know if there are unmentioned aspects, which were helpful in making your decision. They can always be edited in.

If this article was helpful to you in any way, feel free to send me some SATs 🙂

You can do so by scanning the QR code below with an LN-URL Pay compatible Lightning wallet or by visiting this link.

HODL on and keep stackin’!

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