Bitcoin Forum

Hi there,

Do forgive me if the next question is stupid however I have got a newbie question.

In regards to cloud mining how does it work with the difficulty?

The difficulty level will go up but if I choose to do it myself (hardware) I will keep on purchasing the best stuff etc etc. Does this happen in cloud mining as well? Or is it that if I but a contract today the ghs will be less profitable as the difficulty goes up? (And my miners wont upgrade to meet the next difficulty level)? Also meaning that if you buy a new contract those miners will have a different capacity for the difficulty level?

Hope its understandable and some one has got an answer to this ;)

If you buy a contract today, the GHS will be less profitable as the bitcoin difficulty goes up.

Accroding to bitcoin mining calculator at https://alloscomp.com/bitcoin/calculator you will find that you are set to earn lower everytime the difficulty goes up. If buying a cloud mining contract was profitable, people wouldn't sell them.

The short answer is don't buy a cloud mining contract.

As difficulty goes up your revenue per day will go down. The difficulty has been increasing by  roughly 20% every 12 days or so. This means that after just a few months your revenue will be almost nothing on a contract that lasts years.

I personally don't see a cloud company yet as a viable option with current options Ive looked into.  But 20 percent also has not been true on last changes.  I have heard experts talk about difficulty and it's pretty varying on what they think will happen.    The 20 can't go on forever, I hope it's done for now.  but only time will tell.  But last few have been much better then the old standard of 20.

It will eventually get to the point so that the most efficient miners can mine 1 BTC while using 1 BTC worth of electricity in places where electricity is the cheapest.

Ehhh... some say this but there are so many factor's electricity, cooling, equipment used.  We are far away from 1 BTC = 1 BTC of electricity.  Even in perfect world costs will never be same for companies.  It's hard for it to just equal as long as there is a demand for BTC.

In perfect world one day bitcoin is all mined, and we mine for transaction's fees.  There would have to be profit for it to happen.  But we are FAR FAR away from anything like that.

No, that makes no sense at all.
If a miner mines 1 BTC using 1 BTC worth of electricity, why would people mine? Duh.
In places with cheap electricity, such as $0.04/kwh, An Antminer S3 can mine 0.01183710BTC while consuming 0.0005676BTC worth of electricity per day. That's what I call profitable.
Check your maths please.

Cloud mining and having a physical miner is the same.  :D

No it's not, don't mislead people. Your electricity costs might be higher and you might not know how to do maintenance, and that's why you do cloud mining. It's less hassle and less noise.

Cost of having someone else doing the maintenance doesn't come cheap.

cloud minning is not profitable!

Thanks for taking the time to answer guys ;)

So another question: is there a way of earning btc next to mining and trading? Or which coin would be worth investing in?

You may post in the forum at least 1 time a day and after three months you could earn bitcoins joining a signature camapaign.

Have you tried with faucets?
They won't make you rich but it's better than nothing.

Cloud mining will only result in a profit for the mining company who will in turn use those profits to compete with you.  It's like giving your gun to a robber who then shoots you.

Trading can be profitable - it can also result in a loss. Trading BTC/fiat is safe but you risk losing out on profit if BTC goes up and you're in fiat.  Trading crypto pairs is very risky - should only be done after some good experience.

Since BTC is more or less money - you're asking what's the best way to earn money.... work!  Either earn in fiat or do online work for BTC.  If you earn fiat buy BTC directly - safer and more profitable than mining (for almost all people).

Yes it is better than nothing if you live in a 3rd world country where the economy is weaker.  If you live in a place with a decent western wage faucets are a horrible waste of time.  You can make more money by begging or recycling cans or mowing lawns.

Faucets are incentives to teach new people how to use a wallet, not to earn income.

Good to know ;)

Thanks DrG and as I love my job I am not quitting it anytime soon! However I keep on hearing more about bitcoin and find it so clever, plus hats off the the early investors. As it is not too mainstrain yet I am looking into it but do think that just investing in them would be the best!

Another question as I noticed you are quite active on the forum. Do you think there are any other coins worth to watch?

Well you know how forums are - everybody is going to promote the stuff they have a vested interest in.  So I would not trust anything you hear from anybody, myself included, as advice.  I have mined BTC, LTC, XPM, DOGE, PPC, tons of other coins on multipools and now Monero.

I think the only real contenders are BTC due to inertia, LTC due to inertia with BTC and it kind of established itself as the backup when BTC forked, and maybe one of the new anonymous coins - you pick DRK, XMR, BCN or whatever.  BCN was essentially 82% premined so I avoided it.  I am mining a little XMR (Monero) right now.

The thing is BTC is still in its infancy but it has the lead.  It's like Myspace but it was able to succeed and not get dethroned by Facebook. Nothing is keeping Facebook from getting killed other than inertia and some business support.  So I wouldn't put my life savings into BTC yet.

Both of them involve a investment amount and risk. Trying signature campaign is a good idea. You must however, have a better knowledge of how it works, therefore contributing to the community by discussions and posts. The only coin I would say it is worth is Bitcoin. I don't see any other coin gaining positive reputation more than bitcoin.

Just buy bitcoins directly from any exchange and don't sell them, in the meantime keep posting in the forum.

The difficulty can't keep increasing 20% exponentially forever IMO.
We have incredible improvement in miner efficiency for the past 2 years (from GPU to early ASIC to new efficient ASIC), but the newest ASIC is already in 28nm. I don't believe it will keep improving in that insane speed honestly. :)

Risky way: Gambling and trading
Less risky way: Investing in trusted casinos
Safer way: Selling products and services, joining a sig campaign

I personally don't touch altcoin, as it is way too risky for me. :)

The newest ASIC is currently at 20nm. They can optimize it more, improving the efficiency. IMO, it isn't about the efficiency but quantity, if more people join in, the hashrate should increase, thus increasing the difficulty.

But why would people keep buying new miners if they are not going to get profit in bitcoin mining?
Of course some people may not do the research before making the purchase, but it should be only be a small proportion of miners.

They can be having low or free electricity. You would be able to make ROI quite soon, since you aren't factoring your electrical cost. Also, since miners are more and more optimized, the price should go down for old ASICs and companies would be optimizing ASICs and improving the efficiency.

No the growth can't continue to grow at 20% - it will plateua just like it did with GPUs.  At that time, only the people with very cheap electricity will be mining, however, as everybody else would be operating in the red.

It will eventually get to the point so that the most efficient miners can mine 1 BTC

while using 1 BTC worth of electricity in places where electricity is the cheapest