At least with physical miners, it's possible to make a profit. People have made profits when they did their own research and the company delivered the hardware on time. It's rare but it happens. Trading aside, literally nobody has made a profit with CEX.IO in BTC terms. Their contracts have been unprofitable from the very beginning. And the only cloud mining sites that were profitable so far eventually turned out to be ponzis.
If you can get legitimate cloud mining contracts for cheaper than the cost of a physical miner, then you'd also make a profit from cloud mining too.
You could currently buy 1700 Gh/s of AMHash off Havelock for less than 0.00097499 BTC/Gh, so less than 1.657483 BTC for 1700 Gh.
AMHash charges 0.001551 USD/Gh/day for maintenance. For 1700 Gh, that's 2.6367 USD.
An SP20 is currently selling for 479 USD. At 235 USD/BTC, that's 2.03829787 BTC. You also need to pay for shipping and a PSU.
The SP20 does 1700 Gh/s (customers say about 1500-1600) and consumes 1200 W.
That gives 0.00119900 BTC/Gh and 28.8 kWh used daily.
With an electricity cost of 0.1 USD/kWh, that gives a daily running cost of 2.88 USD.
The SP20 can also be underclocked to 1176 Gh/s using 639W.
That gives 0.00173325 BTC/Gh and 1.54 USD daily running cost or 0.001310 USD/Gh/day.
You are more likely to profit from legitimate cloud mining than you are from mining bitcoins at home or even if you get you miner hosted.
And AMHash is now no more.
I admit I was surprised to see them collapse. I considered them to be one of the more reputable ones up there.
TBH it's quite problematic and painful to buy and sell physical miners, at least for me it is. A lot of work and trouble (I bought and sold quite a few 65nm, 55nm and 28nm stuff). Some buyers are complete wackos and you're in danger of being fucked when you try to sell the hardware. I just don't have the time and energy to do that anymore. And it takes a long long long time to break even just by mining. Or maybe you never even break even.
Some people see that legit cloud mining doesn't make them enough money. They kind of expect cloud mining farms to be charities which give them craploads of passive income. If that doesn't happen, they join ponzis to get more profits.
Then the ponzis collapse and even cloud mining services are being shut down. All that is left is physical mining. And people don't want to do that anymore. Well, then they are shit out of luck. No more free money created out of thin air by the Chinese.
And after all this people seem to be so disappointed. Their lifelong dreams of getting lots of free money just from sitting on their asses are crushed.
Agreed.
Interestingly, in the very, very early days of Bitcoin mining and markets (i.e. early 2009), there was one miner called NewLibertyStandard who mined bitcoins and then sold them on his website via email. His prices dictated the market at the time and it was based solely on electricity costs:
During 2009 my exchange rate was calculated by dividing $1.00 by the average amount of electricity required to run a computer with high CPU for a year, 1331.5 kWh, multiplied by the the average residential cost of electricity in the United States for the previous year, $0.1136, divided by 12 months divided by the number of bitcoins generated by my computer over the past 30 days.
Because of the way mining works, if electricity costs exceed the reward, lots of people will jump in and the network difficulty should adjust itself so that mining becomes more difficult. If electricity costs are lower than the reward, lots of people will jump out and the network difficulty should adjust itself so that mining becomes less difficult. Therefore, the economics suggest that mining should be profitable, but only barely so.
Since the reality today is that most miners do not make a profit, it's interesting and curious to see that this is generally NOT the case.
Perhaps this topic is more well-suited for another thread though.
EDIT: Here's a new thread:
http://bitcointalk.org/index.php?topic=1000880what about cex now?
bitcoin prize drop to 250 dolar
so will they start mining again?
i think they will..
They have contracts with different hardware providers. What they did was disable mining by default. You can choose to switch it back on manually if you want to but I see no reason why anyone would since maintenance fees would eat up all your profit.
