That's what I'm saying. It's ridiculous.  But you tell people these things and it doesn't even have an impact.  Half will come up with half-baked theories (my favorite so far has been that scrypt.cc has secret, next generation hardware that nobody else does lol) and the other half will just say you're making stuff up, admin never said that, etc...

@cryptodevil:

I accidentally put ghs instead of mhs.  

This number comes directly from "admin."  One day I asked him when he's going to sell below market price Khs again and he quickly shot back with the $2.50 per mhs price.  He went on to say that was his rate "direct from the manufacturer."  He says he "always" sold hashpower at a profit.

When I asked him to name the manufacturer, he ignored me.  Some of the regulars in the chat claim he has named this manufacturer, but they wouldn't say who it was.

I've seen him use the figure on several other occasions.  He also said they mine up to 8 coins at a time.

Of course, he just says these things in chat and let's them spread by word of mouth.  He doesn't officially post anything on the site.  But if you catch him in the chat, you can probably get him to repeat it and take a screen shot.

@cryptodevil

I think it's important to have people out there that try to explain how mining actually works to people that are brand new to cryptocurrency.  That's why I offered evidence to show that scrypt.cc's historical returns are unjustifiable based on the actual profitability of scrypt coins.

But no matter what, evidence-based arguments are answered with complete nonsense.  Goldman Sachs was one of several companies that invested a total of $50 million in Circle, a website where you can buy Bitcoin with a credit card.  What the hell does that have to do with scrypt.cc?  As you pointed out, absolutely nothing.

Scrypt.cc says they paid like $2.50 per mhs for their hash power.  That's far less than what it will cost even when next generation hardware comes out.  There's no evidence they're actually mining, their returns are not based on reality, their payouts don't vary enough to account for the constant conversion from scrypt to Bitcoin they pretend they're doing, dissident voices are routinely muted in their chat, the list goes on...

These are things that we see and know are clear evidence of a scam, especially considering how easy it would be for scrypt.cc to prove us wrong if they were actually mining.  The evidence is out there for anyone to see.

My point with all this is to say, maybe it's time to throw in the towel.  The overwhelming tidal wave of stupidity will continue to crash down no matter what.

Don't get me wrong, I know it's a Ponzi.  I'm just using the Khs price to plug into the calculation.

I'm going to do an experiment because it seems like no matter what you post here, however easy it is for others to verify, you basically just get told your an idiot.  So, my next calculation:

Probability the sun will come up tomorrow:

Based on historical trends, I'd say about 99.99%. 

Current litecoin profitability:

1.2 million Khs of hashpower yields 28 litecoin a day

1.2 million KHS x .00001000 per Khs = 12 BTC

28 litecoin = about .211 BTC

ROI (without electricity cost): 56 days

ROI (with electricity cost): At least 110 days

What is "ROI" currently?

That's interesting.  30,000 BTC is a staggering amount.  How did you come to the conclusion that it's a Ukranian syndicate?

You know, something kinda interesting: I posted some critical comments about scrypt.cc on a few review sites.  They weren't just random, "this is a scam."  It was more of the same stuff about how to analyze a particular coin's profitability and all that.  With references and links.  They never made it out of moderation.  I tried again, same thing.  I couldn't believe it.  They may have no association with scrypt.cc.  Most review sites are just there to generate referrals so maybe they just didn't want anything toob negative.  But either way, I was like, I'm actually being censored.  It was really eye-opening.

I mean, to be happy with that and get out.  I would expect a scammer to want to make a lot more.

We all have to make our own decisions with the information we have available and if knowing that this guy has $600,000 worth of bitcoins makes you feel comfortable, I don't think anything can dissuade you.

Personally, I think $600,000 is a ridiculously small amount of money for running a scam for over a year.  I have been reading a lot about Ponzi schemes that the SCC investigates and people don't stop at a million or even 10 million.  Some scans run in excess of 20 years and bring in 100 million+ before they are shut down. 

I really don't think it's wise to say, "ok, let's suppose this guy is a scammer.  I know how much he would be happy with."  It's kind of foolish for someone to assume they can determine the limits of someone else's greed.  By that logic, Bernie Madoff would have stopped at, well, a small amount like 10 billion.  We all know he didn't.

I think it's safe to assume that a scam will run until it's no longer profitable.  Scrypt.cc has a legion of extremely dedicated followers that dominate the debate on the various forums and give newcomers a false impression that scrypt.cc is "the best option" for cloud mining.  The owner of scrypt.cc is a classic con man.  He has built his entire operation through the force of his personality and by interacting directly with his investors.  I believe that con men like him get a lot of pleasure out of being respected by so many.  I expect Scrypt.cc to be around for a while. 

The interesting thing about all this is that I gave you and everyone else the tools necessary to do your own analysis and construct a hypothetical portfolio that would justify scrypt.cc's mining performance and I was pretty much completely ignored.  I guess I'm not totally surprised but I thought someone might give it a go.

One last note, I'm not anti-cloud mining and think everything is a scam.  If you viewed the leaderboard over the last few months, you may have seen me under the handle "Anthony."  I was number 6 before I cashed out.  When dealing with tens of thousands of dollars you are forced to be a little more critical. 

I usually don't mention this cuz people just say I'm full of shit (except those that actually saw it happen in the chat) but back when Admin used to say anyone can go visit the farm, I set up a visit and hired a freelancer in Brazil on a site called elance to conduct the visit.  Admin never made contact with the guy, he didn't answer my tickets asking what had happened, and the next time I went in chat, it was disabled and although for a short time, I could create a new account and access the chat, now every account is disabled and I haven't been able to talk to him.  So take that for what it's worth.

@LsHallo

Hi.  It's so hard to determine the reasons for the abrupt shifts in hashrate of different coins.  So many variables.  Dogecoin, for instance, is a fairly popular coin and a lot of people hold it.  There's a lot of dogecoin speculation.  The price was flat for a while and then surged from like 45 sat to 55 sat.  I'm not sure what it is now.  But price changes like that can impact mining.

Also, you mentioned sexcoin.  Sexcoin is featured in several profit-switching multipools.  Those pools effect hashrates because they back certain coins with a lot of hashpower and then it suddenly drops off when their systems decide those coins are not profitable enough anymore.

A whole other thing is short-term rig rentals.  You can rent a mining rig for as little as 3 hours.  That means you get a massive amount of hashpower for those 3 hours.  I've rented rigs and mined smaller coins and for those 3 hours single-handedly doubled the network hashrate of the coin.

So, really, there are so many coins now with so many different characteristics, and so much access to hashpower on various different platforms, it's virtually impossible to know exactly where the shifts are coming from.  

And miners do not act rationally in the sense that they do not always mine what's most profitable.  Just look at how many SHA-256 coins are out there.  There are dozens all with different rates of profitability.  You would think that naturally all the miners with sha-256 hardware would gradually converge on the most profitable coins, yet all these coins continue to be mined at the exclusion of Bitcoin.  

So, it's jtst to complex to really know for sure.

@masterful:

You have to realize I'm using block times, block rewards, and current market prices.  This is the most basic information available for any coin.  I know some people might not know where to find comprehensive info like this on a large number of coins, and I'm happy to show them as I did in my last post.

But it's the same thing as if I did an analysis of Bitcoin and used:

Block reward: 25 btc
Block time: 10 minutes
Nethash: current info from blockchain.info

I mean, this is just what everybody knows about Bitcoin.  It's no secret.  It's the same with scrypt coins.  The information is readily available and verifiable.   Anybody has access to it.  All I'm basically doing is multiplying the numbers and showing the implications for scrypt.cc.  

The thing is, with the disagreements to my posts, nobody has put forward a data-based, verifiable counter argument.  Why don't you provide one?

@ curious guy.

Hi.

A good place to start is www.coinwarz.com.  They have a large list of coins and when you click on one, it will provide you the block reward, block time, current market price of the coin and other information.  I just use the block reward and block time to find out how many total coins are produced in one day.  A lot of coins are like Bitcoin and the reward per block decreases over time, but some have a variable rate.  So you might have a block reward of 10 coins between blocks 1 and 1,000 and then 15 coins between blocks 1001 and 2000.  

In order to verify the accuracy of the information on coinwarz a lot of times I google the coin name and find the official site which is usually coinname.org or the official post about the coins launch and there I can double check the block reward, block time etc...I have found some inaccuracies but it's usually because the block reward has gone down and coinwarz has not updated their info.  In these cases, the coins usually turn out to be less profitable than if you used the coinwarz info.

Another similar site is whattomine.com.  It has similar info as coinwarz.

The network hashrates listed on these sites are pretty accurate and it helps a lot to look at the historical progression.  Real time data on network hashrates of smaller coins can shift more than you might see with Bitcoin because there's a whole market of miners out there chasing the most profitable coins.

A final note is on coin prices.  I have been very generous in my calculations by assuming you can sell all the coins at the current buy price.  This is almost inevitably never the case.  The smaller coin markets have very low volume and not much liquidity.  So if you came in with a large number of coins and wanted to offload them on the market, you're going to drive the price down and end up getting less.  If you entered a limit order with your desired price, you could end up waiting days to sell even a Bitcoin or two worth of coins. So to be really accurate, you'd have to look at how many coins you can actually sell at the desired price and how quickly and how often you need to do so.

@chunker: every cloud miner has an ROI based on the cost of the hashpower and the amount of the rewards.  So if you don't like saying they "offer" ROI or whatever, it's just semantics.  The point is that historically, during given time periods, an investment in scrypt.cc yielded a total return on one's investment in a given time frame and looking forward you can calculate projected ROI based on current reward amount and the price you paid for your hashpower.

This is obvious stuff we all know and anybody can see that's what I meant when saying a certain ROI is "offered."

@masterfu: incidentally, I covered dogecoin in another post because it's one of the highest Bitcoin-producing scrypt coins at over 8 btc a day.  Funny thing is, people made the same comments then like, "dogecoin is just one coin."  I've analyzed over 100 scrypt coins.  When I make a post, I choose a few coins that are repreentative of the larger point.

You're not supposed to make up your mind based on a single post.  The idea is for people to do their own analysis.  Start looking at scrypt coins and you'll see the same thing over and over again.  They aren't priced that high and thus don't produce that much Bitcoin value.

The larger point that you might be missing is that regardless of its profitability, large-scale scrypt mining operations are forced to mine litecoin.  The entire litecoin network produces a little over 218 btc worth of coins a day.  If you are mining scrypt with large amounts of hashpower and paying 50 or 100 btc out per day, there is almost nowhere else to generate that amount of Bitcoin without mining litecoin.

I looked at fastcoin, dogecoin, dogecoin dark, litecoin, 42 coin, einsteinium, spots, lycancoin, globalcoin, sexcoin, franko, tagcoin, megacoin, and others just this morning in preparation for the last post.  

Between Feb and Apr, scrypt.cc rewards provided an investor with a two month ROI and was paying out over 30 btc a day just to the top 20 account holders!  khs price in early Feb was between 1200-1400.  The returns given cannot be justified using any of the historical data we have on all scrypt coins.  Don't take my word for it.  All the data I'm using is available to anyone with an Internet connection.

For those of you not so ideologically committed to scrypt.cc and can't listen to reason, this is how the scam works:

The average person comes across scrypt.cc and sees they mine "the most profitable scrypt coins" and they think, well, with one coin like Bitcoin, difficulty increases and you make less over time.  By switching coins, you'll be way more profitable!

So here is an example of a very profitable scrypt coin:

BBQ Coin: 60,480 coins produced a day; nethash=610 mhs; 610,000 khs nets 30,240 coins per day valued at .1273104 BTC; paying .00001000 per Khs gives a 47 day ROI WITHOUT ELECTRICITY costs.  With electricity, ROI is closer to 80 or 85 days.  

Sounds decent, right?  

But these smaller coins don't produce that much btc value a day.  So let's say we really like BBQ coin and commit a further 610,000 Khs.  Now we have 1.2 million Khs out of a total nethash of 1.8 million Khs.  We have 66.66% of the network hashpower and we'll get roughly 66% of the rewards.  So we get .16972615 btc a day.  But our total investment is 1.2 million Khs x .00001000 per Khs = 12 btc.  Now our ROI is 70 days without electricity instead of 47.  That's diminishing returns. For a small coin with a small network hashrate, the more hashpower you commit, the less total btc value it produces per unit of hashpower.

Now, this is not the "scam" part.  The scam comes in with scrypt.cc paying out in excess of 50 Bitcoins per day with ROIs ranging from 2-4 months.  The historical data on scrypt coins is available.  Anyone that's willing to do the research can see for themselves that a 2 month ROI between Feb and Apr of this year at scrypt.cc was impossible.  Even using the cost per Khs of scrypt.cc's fake hashpower, it could not be done.  There are not enough small profitable coins that could produce that much btc that fast without diminishing returns setting in.  A large scale scrypt mining operation is forced to commit a large amount of its hashpower to litecoin.  Go ahead and take a look at how profitable litecoin has been this year and then ask yourself if a 2 month ROI was really ever possible or even if the current scrypt.cc ROI is possible.

The good thing about hashnest is the liquidity of the ghs exchange.  You can always sell your hashpower quickly and about the same price you paid for it.

You should go into the scrypt.cc chat.  There people actually care about your musings about the Khs price fluctuation.

Remember, the rewards changed drastically because of "electricity."  In my scenario, I don't even include electricity.  The point is not that scrypt.cc advertised 60 ROI, it's that they actually paid that between Feb and Apr of this year.  During that time, KHS price never fell below 1000.  All the coin information, prices, hashrates, etc is publicly available.  We have all the data we need to do an empirical analysis.  Why don't you just prove how stupid I am and show me a portfolio of scrypt coins that could of had that performance taking into account what you would have actually paid for hashpower at the beginning of the period.