Genesis-Mining and Bitcoin reward halving!!

[EBK1000]

I have previously posed this question to Genesis-Mining; if all else stays the same but the Bitcoin reward is halved, will the mining shares still be profitable? They did not provide a clear answer. I have asked Genesis-Mining again the same question and I have copied in the support question I sent them:

"I have tried to pose this question before and I will try again as I know that many people would like to know before making any further investments. If you make the assumption that EVERYTHING except the Bitcoin block reward stays the same, will Bitcoin mining with Genesis-Mining still be profitable? i.e. Your costs stays the same, difficulty stays the same, Bitcoin price stays at $415,- and no other factors change; the ONLY thing that change is the reward from 25 BTC to 12.5 BTC.

In your previous answer you say:
"We know the halving will be a topic, but we can not predict what will happen. We can not even predict the next difficultychange due to the nature of cryptocurrency and its daily changes.
but just one thought, when the mining reward will halv, also the need for BTC will increase due to expanding companies, the value of BTC will increase, and this not on minior numbers.
Best regards,
Tom
Genesis Mining"

There are a number of coins that have gone through a reward halving, like Litecoin and Dogecoin, although not as heavily traded as Bitcoin, but still it does not appear to have had the effect of a price increase or an increased demand.

So, before we invest more (in your upcoming promotion), can you just answer the above question please? ALL ELSE stays the same, only the Bitcoin reward is halved, will my Bitcoin mining share still pay out?"

Any opinion on the matter? Genesis-Mining is pushing a promotion in the next day or so, but will they still pay out after the halving or are they just trying to sell out before?

[gkv9]

Look, when the price of BTC was $200 and miners were mining, just think why did they mine...
It was just because mining was profitable with the reward of BTC25 when the price was $200, so if we see it correctly, the price is currently double the previous one, and so it can be said that BTC is already priced in before halving so that miners may actually profit in future too, though they are still accumulating for any further losses which might occur (possible) but I don't think that with this price, you might see any loss even with halved rewards...

[FUBAR-BDHR]

Remember what happened to ghahs and many other cloud mining contracts when the price fell below about 320?  They suspended them all and never turned them back on when the price went back up. 

[Sierra8561]

Look, when the price of BTC was $200 and miners were mining, just think why did they mine...
It was just because mining was profitable with the reward of BTC25 when the price was $200, so if we see it correctly, the price is currently double the previous one, and so it can be said that BTC is already priced in before halving so that miners may actually profit in future too, though they are still accumulating for any further losses which might occur (possible) but I don't think that with this price, you might see any loss even with halved rewards...

One thing to remember is difficulty has risen significantly since bitcoin was at $200.00. Difficulty would need to drop for $400.00 to be profitable after halving.

[SFR10]

Not sure if I understood it correctly but in case by "will my Bitcoin mining share still pay out?" you mean will you still get a ROI then the answer is "Yes", just in a less speedy rate than prior to halving. Good point by gkv9, since there's definitely room for profits even though it will be lesser. Those who pay huge rates in electricity as compared to others, are the one's affected with this outcome (no state change besides block reward).

[BitcoinNewsMagazine]

I would be very careful buying from Genesis Mining right now with halving 3 months away. Read the fine print in the contract (if you can find it) or you may find your contract worthless after the halving when maintenance costs could be greater than mining rewards. I think it would be a good idea to wait until after the halving to buy hosted mining from anyone Hashnest and BW included.

[EBK1000]

I would be very careful buying from Genesis Mining right now with halving 3 months away. Read the fine print in the contract (if you can find it) or you may find your contract worthless after the halving when maintenance costs could be greater than mining rewards. I think it would be a good idea to wait until after the halving to buy hosted mining from anyone Hashnest and BW included.

This is the reply I got from Genesis-Mining today:

"If all else remains the same then mining would probably not be profitable anymore. But as said, nothing ever stays the same and effects of the (coming) halving are not known. Value can rise or drop, people can stop mining, making difficulty go down, more people could be mining it for value reasons, and so on."

[jmumich]

Their answer seems pretty honest to me. Optimistic, but not unreasonably so.

[Raimonn]

If the promotion isn't a very good offer, i think that is better wait to see what will happen on price and difficulty. If prices don't increase the maintenance cost could hurt your minning rewards.

[eyeknock]

Remember what happened to ghahs and many other cloud mining contracts when the price fell below about 320?  They suspended them all and never turned them back on when the price went back up. 

sounds a litle bit strange that a company like genesis-mining do it too, but worst things have been happen in last months, so in the end, be 100%sure that if thats what they will need to stop-loss, they will do it and will not care about the end user... (sadly as you say, it will not be the first time that a company do it...)

[PassThePopcorn]

They cannot provide a definitive answer, seeing as with BTC it could while likely won't, fail. If they say it will be profitable and then it isn't then they can be held liable. Its a risk, you would need do do your own research.

A better way to get a reply would be, what conditions would have to happen for you to no longer pay out? You would be basically asking them at what price is the contract no longer profitable due to fees and that they would no longer pay BTC to contract holders. Divide what you make now by 2 and subtract out their fees for that same time period and  you have your answer.

Another user posted about ghash contracts no  longer being put back up when it was more profitable, the cloud miners say they "mine with equipment" if that is true when the miners are no longer profitable they are sold or disposed of, in business holding inventory / stock actually has a cost and is not free, storage of the units would also be a factor and to prevent any outrageous costs from occurring (if BTC didn't swing back up) they would be forced to "sell" the equipment they have. Any "new" miners would be new equipment on new contracts, as the old contracts are no longer valid new hashrate will be resold.

[behzads2]

Hi guys.
my contract information

Daily Payout  for 20TH was about  27 $ Bitcoin Price [620-660]  [ Contract 20TH Life time ]  Contract  3200$ ]
after Halving ,  Daily Payout 7.5$ Bitcoin Price [620-660]  [ Contract 20TH Life time ]  Contract  3200$ ]

https://s31.postimg.org/l3p4t8zob/2016_07_14_01_56_55.png

Support Answered  to my question about Payouts !!!!!!!!!!

As expected, The Halving has reduced payouts by 50% on the 9th of July 2016. This is programmed within the Bitcoin algorithm and Genesis Mining can do nothing about it. Please, find more information about the halving in this article : http://finance.yahoo.com/news/bitcoin-halving-blockchain-mining-000000868.html and https://en.bitcoin.it/wiki/Controlled_supply

The real decrease of your payouts is higher than 50% because the maintenance fee has not been reduced by 50% as well. Because less coins are mined which havent changed in value compared to before the Halving, the impact of the fee is higher. Unfortunately, as stated in the contract, we cannot reduce the maintenance fee because it is associated to the machines that we purchased with your investment. Your machines have fixed electricity, maintenance, cooling and hosting costs, and more, during their productive life.

You can check the accuracy of our payouts by nusing external calculators, such as coinwarz.com here: http://www.coinwarz.com/calculators/bitcoin-mining-calculator
Just insert your amount of hashrate,s et power costs and watts to 0 (as those costs are in the maintenance fee), and run the calcualtion. Very important: the daily result is the result without fee, so be sure to deduct the proper amount of fee for your contracts from this amount!
As calculators base their results on ideal numbers, there will always be some inaccuracy, but in general you will be able to use the results for fairly decent estimates.

How this will evolve from here is not something we know. Of course your payouts may increase over time. This is because the higher the BTC raises versus USD, the lower the impact of the maintenance fee will be. Higher value means it will take less of the mined amount. This is because we charge a fixed maintenance fee in USD (new contracts = USD 0.0004 per GH/s per day), but we deduct it from your payout in BTC.

On the same positive note, another effect of the Halving may be that due to the lower payouts, the global interest in mining BTC may diminish due to the fact that some mining hardware in the world is now more expensive to run then they can actually mine. Some miners would probably shut down their operations and that would mean a (probbaly relatively small) decrease in the mining difficulty. Lower difficulty would mean the same hasrate will produce slightly more Bitcoin, which of course will have a positive impact by increasing your payouts. You can see past, present and predicted future difficulty evolution on this site here for example: https://bitcoinwisdom.com/bitcoin/difficulty.

As always, we provide the mining infrastructure and run it as efficient as possible, but none of the factors mentioned above depend on Genesis Mining, nor can we foresee how are they going to evolve in the near future. There may be long term effects of the Halving on Bitcoin value still.

Thanks for your understanding.

[marlboroza]

I have previously posed this question to Genesis-Mining; if all else stays the same but the Bitcoin reward is halved, will the mining shares still be profitable? They did not provide a clear answer. I have asked Genesis-Mining again the same question and I have copied in the support question I sent them:

"I have tried to pose this question before and I will try again as I know that many people would like to know before making any further investments. If you make the assumption that EVERYTHING except the Bitcoin block reward stays the same, will Bitcoin mining with Genesis-Mining still be profitable? i.e. Your costs stays the same, difficulty stays the same, Bitcoin price stays at $415,- and no other factors change; the ONLY thing that change is the reward from 25 BTC to 12.5 BTC.

In your previous answer you say:
"We know the halving will be a topic, but we can not predict what will happen. We can not even predict the next difficultychange due to the nature of cryptocurrency and its daily changes.
but just one thought, when the mining reward will halv, also the need for BTC will increase due to expanding companies, the value of BTC will increase, and this not on minior numbers.
Best regards,
Tom
Genesis Mining"

There are a number of coins that have gone through a reward halving, like Litecoin and Dogecoin, although not as heavily traded as Bitcoin, but still it does not appear to have had the effect of a price increase or an increased demand.

So, before we invest more (in your upcoming promotion), can you just answer the above question please? ALL ELSE stays the same, only the Bitcoin reward is halved, will my Bitcoin mining share still pay out?"

Any opinion on the matter? Genesis-Mining is pushing a promotion in the next day or so, but will they still pay out after the halving or are they just trying to sell out before?

Its not profitable, you will never hit roi, maybe after 4 years, and that is one big IF. Rewards are halved, but you have to pay electric bills, which is pretty the same as it was before halving, so you will actually earn 4,5,6 times less than before, not 2X 

[albysprx]

i invested only a little (luckily), my reward is now halved from 24k satoshis to 7k satoshi daily...

[Newcoins2020]

i invested only a little (luckily), my reward is now halved from 24k satoshis to 7k satoshi daily...

That's not surprising. You should have read the many threads about how genesis mining always find ways to benefit for them self, ignoring their users.
What they do is pre-financing their mining operation by their soon to be poor investors.

That's their business model from the start.