Ok, so this is another "I told you so" post, but allow me to bring this up, when I offered my bet that pbmining was a ponzi about to collapse, I didnt accept the betting terms about the website being online, and pb still paying out 'something' after x months. Instead I  insisted on this: " I also want to stipulate that I win the bet if payouts substantially diverge from theoretical mining yields. So for instance if pbmining comes up with some new fee or whatever, to reduce payouts to a few satoshi, or declares being hacked/fire/whatever and begins paying out just a fraction of what would be expected based on difficulty, I still win."
https://bitcointalk.org/index.php?topic=418183.msg9684757#msg9684757

The bet wasnt made, but now you understand why I insisted on this and why I am not in the least bit surprised.

123 BTC. For the ~5PH he sold = 0.0000246 per GH. Not exactly a "whole lot".
Im sure there is more elsewhere, but not nearly enough to pay back whats owned and Im equally sure you wont get to see it anyhow.

Thats incorrect. You're ignoring maintenance fees which are function of exchange rate since electricity, hosting and usually hardware is still priced in fiat. Maintenance fees currently take up 50-90+% of the payouts on most legitimate contracts, so this is pretty darn crucial. If BTC falls below $200, all these contracts become worthless. If BTC goes ballistic, even cex.io contracts might make you a nice profit. AT least until difficulty catches up.


Again, you're assuming to know how much a contract will pay out. If you do not know what difficulty will be like 6 months from now and what the exchange rate will be, how do you know what the expected payout will be ?

You see cloudmining as a loan from the investor to the miner, I see it as the miner selling off a huge risk to the highest bidder.

AFAICT, they are no longer selling cloudmining.

Nope. The real risk (assuming its not a scam) is future difficulty and btc exchange rate (operating costs are in still paid in fiat)


But you cant know what future profits will be like. You make assumptions on exchange rate and future difficulty and those assumptions tend to be overly optimistic. If they predict a significant profit, that very same prediction will lead to increased deployment of hashrate which will invalidate your prediction. In a sense, its a self defeating prophecy. To some extend the opposite is also true, if even the most efficient mining operation can no longer break even on its running costs, then difficulty will adjust until it does, because less efficient miners will unplug.

In short: long term profitability of mining is just marginally above zero for those with the most efficient hardware and the lowest operating costs. No need for math or estimates, its just how this market works. Its a zero sum game after all.

I see two explanations: collapse of pbmining has finally opened some eyes to the fact that there are more important criteria than apparent profitability (ie scams usually arent profitable). And secondly, the 2, possibly 3 subsequent drops in difficulty.

That latter argument may be short lived though, if paycoin hashrate returns to the bitcoin network and next gen miners hit the network over the coming weeks or months.

There seems to be > 50PH  mining paycoin. Explorer even shows 140PH right now, but it fluctuates wildly due to the insanely short blocktime, and Im not sure what the average is. But its substantial. Paycoin POW period and therefore mining is gonna end tonight, expect bitcoin hashrate to rise sharply again.  

A quick look at their fees and litecoin difficulty suggests what they say is entirely plausible.
Or I should say, was, because difficulty seems to been dropping again, so there might be some more weeks of payouts to come.

This however, is in no way evidence of a scam, but it does serve as an illustration of why mining in general is usually a bad idea: any apparent or excess profitability will quickly be gobbled up by extra deployments, causing difficulty to rise to the point where revenue and costs are in balance and cloud mining contracts become worthless. Unless you have a significant competitive edge (low costs), mining can appear to be profitable, but it will almost never end up being profitable. Its been like that since the very first asic, but people still get fooled by the short term %'s.

Ive deliberately ignored profitability for a few reasons already explained, but also because it doesnt really tell you much about if a service is a scam or not. A ponzi can arbitrarily set perceived profitability. Setting it for low profitability will make for a slow, longer lasting ponzi, setting it high will make it collapse faster, but its not even obvious to me which will earn the scammer most. So I dont want high prices to become a false indicator of legitimacy, nor penalize a legitimate service for having highly competitive price, nor give ammo to those that accuse legitimate mining services of being scams just because the contracts are no longer able to pay dividends.

That said, nice job on the website. I generally ignore all cloudmining "review" sites because they are simply a vehicle to push referrals. Its nice to see one that actually tries to tell the truth.

That one might warrant an "8" as well; it seems they dont even pay out in bitcoin, but in $  

http://www.btcslice.com/forum.php?topic=19

I assume via paypal?

Nope, you could do it over a cellular connection if need be. Look up stratum protocol.
What is needed for several PH of hashing is several PH worth of equipment though

Ah well, they can always claim the laws they need to operate havent been voted yet. 'sorry guys, congress is in recess, we recalled them, but paybase will have to wait until they vote our proposed 'Save the financial world' bill".

They could, but why on earth would they, given that most of them are anonymous ? You're assuming a "benevolent scammer" who will keep paying out according to the contract even though he is well past his peak profitability.  I think thats a rare breed.

Good idea. I had never heard of hardbit, but they do list prices:
http://www.hardbit.cn/index.php/purchase

otoh, they do not provide source code, Id be very reluctant to trust them

Two newbies registered only to provide positive feedback to the seller in bold green font. Imagine those odds 

Lets be clear here, the ONLY reason this is implemented and auto-activated is to postpone the inevitable moment where the ponzi bleeds more coins than it reaps in through fresh sales, and thus collapses. Its actually hilarious they adopted the same approach as I did in my "Masters Cub cloudy mining" spoof (https://bitcointalk.org/index.php?topic=888864).


LOL, want to sell your soon-to-be worthless position?

Its implausible to me, that someone would be investing on a site that provides absolutely zero evidence of anything, not even competence,  and actually believe its anything other than a ponzi scam. And if the money was sent based on the assumption it was a ponzi, as I assume most investors did, then you're right that I have zero sympathy for them. In fact I consider them complicit for trying to steal bitcoins from later investors.

Good find. But I count 100 GPU's there. Am I right saying thats typically good for ~100MH ? Thing is, closest cached version of the website I can find is from september, 2 months later, and there they claim to own ~1400 MH:
http://web.archive.org/web/20140912014413/https://hashprofit.com/

Today its 5300 MH.

Id really need to see something more substantial tthan 100 GPU to grant them a point for this.

quoted for posterity