This configuration
Yes this setup works perfectly well. Mining or folding does not require much bandwidth the pci 1x slots can provide more than enough.
You may come across issues with the motherboard disabling certain PCI ports if the one above is used it's a hardware limitation, just because a board has 8 pci slots doesn't mean they can all be used at once. Make sure you check the motherboard manual for details to see the total amount of PCI slots that can be used. I believe there is a hard limit of 7 GPU's which can be run on windows through various tweaks and software setups.
When mining or folding, it's best not to use a crossfire/sli cable as each GPU acquires it's own separate work unit. Using a crossfire/sli configuration can slow down the overall speed.
One thing to keep in mind, with your PCI extenders, look into powered ones or you may damage the motherboard with drawing to much power directly from the pci ports.
A build design like that is highly recommended when mining due to the immense heat which can build up in any closed case environment, you also get the ability to separate the gpu's for more air circulation and better cooling.
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