Idea: very-high-hashrate cloud mining for buying BTC

[theymos]

Currently, it is somewhat difficult for new Bitcoiners to buy BTC because you often need an ID and/or you need to use weird non-reversible payment methods like wire transfers. It occurred to me recently that one way this could maybe be improved would be for someone to offer short-term, high-hashrate cloud mining contracts. For example, a contract could work like this:

- The cloud miner would run a mining farm with a significant hashrate.
- You pay $x via credit card for y hours of complete control of the mining farm. z TH/s is guaranteed, but it may be larger if the mining farm expands between your payment and your time slot.
- If you're paying with a reversible payment method, then you have to wait several months between payment and your time slot in order to prevent most fraud.

As long as the buyer actually controls the hardware during his timeslot, and can point it to whatever pool he wants (etc.), I feel that no reasonable argument can be made that the mining farm is directly paying the buyer or managing deposited funds. Therefore, it seems to me that the mining farm would probably not be subject to most of the regulatory issues entangling current methods of buying BTC. Combined with any anonymous pool of the buyer's choice (of which there are many), this becomes an especially good way for many people to acquire BTC.

The mining farm itself stands to make profit with low risk, since almost all risk is offloaded onto customers. Customers would accept this extra risk plus the price (electricity costs + new hardware acquisition costs + profit) because of the advantages mentioned previously of this method of acquiring BTC over other methods.

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[kano]

I think the obvious point in all this is to see that, indeed that is one reason why people buy mining hardware that is expected to lose BTC.
It's a way to get BTC and your only contact is with whoever (and however) you buy the hardware from.

... as for a trustworthy cloud miner ... that's gonna be the hardest part to find ...

[jonnybravo0311]

Other than the credit card payment, isn't this exactly mining rig rentals' business model?  Hardware owner sets price for control of his rig and duration of contracts.  Person interested, pays X coin for Y time and gains full control of that rig, pointing it wherever he wishes.

[theymos]

Other than the credit card payment, isn't this exactly mining rig rentals' business model?  Hardware owner sets price for control of his rig and duration of contracts.  Person interested, pays X coin for Y time and gains full control of that rig, pointing it wherever he wishes.

I hadn't heard of them -- that does look similar to what I was thinking of. They should try accepting fiat.

I think the obvious point in all this is to see that, indeed that is one reason why people buy mining hardware that is expected to lose BTC.

Yeah, but the current cloud mining contracts are just so terrible that you'll probably end up losing at least half of your money if you try to acquire BTC through them, and you also get the BTC very slowly. They're quite similar to buying perpetual bonds in a high-inflation environment (with the inflation being difficulty increases).

And mining with your own physical hardware is a real hassle for someone who just wants to get some BTC.

[calkob]

could there maybe be an issue with price increase or decrease in the allotted time slot or the person just being unlucky and not getting the expected amount of bitcoin ?

[leowonderful]

You'd need to find a pretty reliable guy to source the hashrate, which is pretty hard to find these days with even holders of significant hashrate scamming people that buy into their mining operations. Other than that, it seems pretty nice. Don't miningrigrentals and hashnest already provide a service similar to this? I just don't like people hosting other people's miners in any way, shape or form at all really, but as long as it is made clear that the buyer is taking a risk no matter how trustworthy the seller of hashrate is, I guess it works.

[shinratensei_]

Seems there is some crack with this way, actually, there is no guarantee like we are using escrow in our transaction, but the difficulty of bitcoin are too difficult for doing about the mining farm rent in this time,

I guess the way get bitcoin are not only from mining the bitcoin but it's can replacing with the another alternative with same equal. totally like this, I wanna for renting my mining farm and already having a renter and in this cases I working about mining zec because that's the easiest way today.
1. The renter just needs for sending their zec deposit address.
2. I was changing my mining pool address with the renter address
3. and starting for mining zec are equal with the exact amount of btc are needed by the renter.
4. the exact amount is already held by the escrow.

the serious problem is in the trust. but it's can't providing for a little buyer, and i could skip that for applying minimum payout from the pool for that.

I think that's will making alternative way rather than directly for mining bitcoin with high difficulty and a lot of energy.

[dance191]

It is a good idea, but problems still remain...

If you pay with a credit card, are people really going to wait months to get BTC?  I think this is the problem.  How do you make an irrevocable payment not difficult if you don't have any BTC?

Overall, I see where your going with it, but the using an irrevocable payment to get BTC without waiting for months is the issue.  That (to me) is the problem to still solve.  Pretty much all mining contracts are sold only with BTC as the payment method for a reason. Some people might wire over money, but it is still a hassle to do that so it looks like you are just replacing one hassle for another. 

Overall, a good idea but the buying BTC with a credit card problem remains.  With how much fraud there is online, you can't allow that.

[veleten]

a somewhat similair service exists,it is called Nicehash
so you are planning a service like Nicehash but with a lower % for capacity rent and direct payments,mining bitcoins only
why would a newbie want to use the service instead of buying directly from,lets say,localbitcoins?

[philipma1957]

It is a good idea, but problems still remain...

If you pay with a credit card, are people really going to wait months to get BTC?  I think this is the problem.  How do you make an irrevocable payment not difficult if you don't have any BTC?

Overall, I see where your going with it, but the using an irrevocable payment to get BTC without waiting for months is the issue.  That (to me) is the problem to still solve.  Pretty much all mining contracts are sold only with BTC as the payment method for a reason. Some people might wire over money, but it is still a hassle to do that so it looks like you are just replacing one hassle for another. 

Overall, a good idea but the buying BTC with a credit card problem remains.  With how much fraud there is online, you can't allow that.

Many cc's and or paypal will allow chargebacks for 6 months so the idea is really hard as a six month wait is huge risk simply due to diff shift and price shift.

Here is an example that could work. It is a variation on the ops idea.

I put 100 usd in btc in a new btc addy you buy the rights to it with paypal via  a gift send you pay 102 usd.

In six months time I release the funds.  This is a buy and hold service done for you the buyer.

My risk as a coin seller is none since  I was paid 102 for 100 worth of coin.
Your risk as a buyer is price drops six months later or I run away.

It could be an easy product to sell if you have a good reputation.

If I did 50 100 dollar addresses I would earn 100 dollars on 5000 in product.

the 50 buyers  are doing a buy and hold for six months that 2 bucks fee is for me to hold the coin in the addy.

[takagari]

You can buy these contracts on ebay, for a retarded amount. lol

[Luke2939]

You'd need to find a pretty reliable guy to source the hashrate, which is pretty hard to find these days with even holders of significant hashrate scamming people that buy into their mining operations. Other than that, it seems pretty nice. Don't miningrigrentals and hashnest already provide a service similar to this? I just don't like people hosting other people's miners in any way, shape or form at all really, but as long as it is made clear that the buyer is taking a risk no matter how trustworthy the seller of hashrate is, I guess it works.

Yes hashnest has been providing something like this. But they don't accept credit or debit cards. Then comes Genesis Mining, what about lifetime bitcoin mining contracts? I know that mining contracts that run for a year aren't worth it as you end up with a loss.

The best thing, would be set up a rig and mine some altcoins such as ether, zcash and exchange them for bitcoin.

[takagari]

There is a very big reason people don't accept credit cards in the business.

ery big businesses don't accept them, Maybe there's a reason why..

[Eric Mu]

Interesting - I am launching a hosting service and has been flirting with the idea of bulk trading to increase profit - cash for coins; slightly higher than exchange rates