Cloudhashing ASIC mining contracts, UK LTD company - Now Mining & Paying Bitcoin

[msc]

...
I've complained a few times and each time I get nothing but the standard answer like I posted above, claiming that it's all one big lottery and that it's normal to not find a single block an entire day with 1500THs, so sometimes no payment at all. Doesn't seem like they really care. If they would, they'ld realize that more and more people are going to feel cheated and word is going to get out. Once their reputation is to hell, there's no turning back and people will run. At least they won't cheat that many people out of their coins then.

The part about it beeing a lottery is true but the number of blocks they find a single day should in most cases be pretty close to the expected value witch is about 7.1 blocks per day at 1500 TH so 6-8 blocks per day should happen pretty ofthen for them.

Chance of finding 0 block a single day at current network hashrate for them with 1500TH is about 0.000688 = 0,0677% so it should happen about 1 time in 1453 days, if it happens more ofthen than that you correct that is suspicious then and would indicate that something is not right.

They have separate scripts to:
1. Read the new blocks from the block chain and post them to the site
2. Break up the new blocks and post the payments to user accounts
3. Mark payouts to be sent to the users external addresses
4. Send payments

The scripts don't all run 24/7 or automatically.  That's the reason for the delays.  They may have had 0 block days in the past, but not anymore.  But even when no blocks have been posted, there may be blocks that have been found and are waiting to be posted.  They might be working on the scripts, and it's better to leave blocks sitting safely out on the blockchain than to risk erroneously crediting them and having to reverse the credits.

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[Mike18feb]

Well, I know it's a lottery aspect, but with (back then) 1500Ths online it's not a question IF they find blocks, the question is how many they find. So if they find blocks every single day, how can it be that I have two days now without any revenue at all?!
I don't expect an actual payment to my personal wallet every day, but with BTC collected every day I do expect to see my share of those, little as they may be, in my ledger/history. It's just impossible that there are none. On March 8 I didn't get a single share all day long, and that day CloudHashing collected 125 BTC. Again on March 10, not a single share for me, yet CloudHashing made a whopping 201 BTC. This is the link they sent me, you can see for yourself how many days they have without finding anything:
https://blockchain.info/charts/received-per-day?timespan=30days&address=1ALA5v7h49QT7WYLcRsxcXqXUqEqaWmkvw

Last times they didn't find a single block was on Feb 7, 9 and 11. I can't remember how many ths they had online then, but it was quite a bunch of ths nonetheless, so I'm surprised even that doesn't garantee a single find. But anyway, my contract started the 15th. They haven't had a single day without blocks since then, so how can I have two 0 revenue days then

...
...But even when no blocks have been posted, there may be blocks that have been found and are waiting to be posted.  They might be working on the scripts, and it's better to leave blocks sitting safely out on the blockchain than to risk erroneously crediting them and having to reverse the credits.

Sorry, trying to understand this exactly. Leave blocks on the blockchain? I can imagine them waiting for a sh*tload of confirmations and stuff, is that what you mean?

[msc]

Sorry, trying to understand this exactly. Leave blocks on the blockchain? I can imagine them waiting for a sh*tload of confirmations and stuff, is that what you mean?

No, I mean they might find 6 blocks on Monday, but their scripts aren't running.  On Tuesday they run the scripts, which synchronizes the site with the blockchain.  It looks to you like they didn't find any blocks on Monday, but really they just hadn't posted them to the site. 

I haven't really kept track in the last few days, but I think they're posting blocks faster now.  I'd still like to see payouts happen daily.

[Mike18feb]

Okay, I get it, they're just not as automated as we would like then. Wish they would explain that then, instead of emailing a standard answer that doesn't answer my question. Thanks for the explanation, msc

[msc]

Okay, I get it, they're just not as automated as we would like then. Wish they would explain that then, instead of emailing a standard answer that doesn't answer my question. Thanks for the explanation, msc

No problem.  Yeah, their communication stinks.

[i4btc12]

sockpuppet #*@&* @#$@%bs

Thanks for the kind words. Yes I really am a newby customer who is still pretty impressed a month+ now since I started on CH. Mind you I also have a contract with Butterfly Labs which is delayed by at least a few months so by comparison CH is a savior. (note Butterfly has agreed to double hashing but only if you get activated 6 months after your order date, so it's either a horrible or a tolerable situation). If anything I jumped immediately on a good CH contract after realizing what a bad contract I had with BFL.

my latest thoughts on CH

• checking the CH dashboard is still the highlight of my day, maybe 1 out of 5 days is "a slow day" but it seems 1 out of 5 days is above expectations. The very few who see it are impressed. People still can't wrap their minds around automated mathematical BTC to cold wallet storage.
• Thanks for the above link https://blockchain.info/charts/received-per-day?timespan=60days&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=1ALA5v7h49QT7WYLcRsxcXqXUqEqaWmkvw, I can see the whole picture better now. In fact I must congratulate Cloudhashing on the record 454 Bitcoins yesterday, that's a long way from the 0 Bitcoin days last month which reflects what went on in my dashboard from (I think) under 400THs to 3PHs (and in the chart you can see the difficulty increasing Nov to February)  I'm actually proud that this pool seems to be hitting 10% or more of total finds and balancing out all of the pools which is very important for Bitcoin protocol. As always I might not know of what I speak, but shouldn't Cloudhashing be showing up on the Blockchain.info pool chart already at say 7%? https://blockchain.info/pools
• my previous notes still stand such as better to buy Bitcoin but it's not that easy especially in light of so many people being goxed. I'm lucky that I now have access to a Bitcoin ATM that doesn't need all that overkill palm print, scanning government id's, and picture taking. Seriously if our Bitcoin ATM required that, I'd likely mine all Bitcoin. Alternatively there is localBitcoins but check the warnings.
• as for the mike19feb forecast of 50% difficulty increase per month, I sure hope not. I check every day the current % number and though it often jumps high and low, it seems to be settling at 10% the periods I noticed (30% /month) or i could be deceiving myself and haven't been watching close enough or long enough. Mind you I'll know exactly when the ButterflyLabs equipment will be hitting and that may be an ugly 2 months. Overall I'm quite happy with my CH results and all is good if we do get 30% /month difficulty increases. Anyone have a chart of actual period to period and month to month in % ?
• as an optimist i also target BTC/USD at 1/$2000 in the next two months so mining could be better than buying BTC sooner rather than later.

[Mike18feb]

Hi i4btc12,

The last difficulty raise was only a mere 11%. That is much lower then usual. The next raise, within 24 hours, will be 17%. Again not very high. Maybe it means the addition on new batches of hardware have less impact. Might be good news for the hardware manufacturers as that would mean their machines would be profitable a bit longer instaed of two or three months. And good news for CloudHashing as they could raise their prices to prevent profititability for their clients.

You can check the difficulty here: https://bitcoinwisdom.com/bitcoin/difficulty. You see the projected jmp for the next raise, and if you scroll down then you can see the previous jumps. What you see there are 2 to 3 jumps per month (every 10 days...). Check october for example and you see a whopping raise of over 100%. Feb saw a raise of 60%. If you apply the math from history onto the future then my forecast is pretty obvious and CloudHashing is of course aware of those numbers as it's their core business. Yet they refuse to come up with a decent answer. Which I can imagine,
Their mission is:

Our mission is to ensure the mining profitability of our clients for years to come ...

, but the prices they charge in combination with the rise in difficulty show that every contract they sell cost more in BTC then they deliver. That's a big OUCH.

BTC may rise in value, but what's the point when you have bought a contract with 5.2 BTC and you get 2.6 in return?! Maybe 3, if the difficulty increase is going down a bit, but still going up. Effectively it means they take 33% to 50% out of all their customers pockets (and "give" those to the MtGox victims in an attempt to look good and get free publicity so they can make more victims.) Am I too negative?! Perhaps. CloudHashing could make a difference yet they keep their mouth shut when it comes to decent explanations about prices and difficulty, and reassurance that the mission printed on their frontpage is sacred.

I'll keep on posting my actual earnings here month after month to show reality, even if I'm wrong(let's all hope so...). Enough opportunity for them to come up with a decent solution also.


Don't take my words for truth though. One rule applies in the crypto world: do your own thinking and take nothing somebody else says for granted

[i4btc12]

thanks mike18feb,

yep you're right. wow those actual chart % numbers are much worse than I had thought (including the latest 17.9% number). ominous. I'll report back in two months though. I think I'll still be pretty optimistic but we'll see.

[Mike18feb]

No problem. I bought a Platinum contract in January, costs: 5.2 BTC for 420Ghs, available on Feb 15.

Now do the math:
Month 01 : 1.4 BTC (at most! With a few days to go it's 1.25 actually)
Issue, is of course rising difficulty. In general that difficulty halves revenue every month. Apply that to the remainder on the year contract:
Month 02 : 0.7 BTC
Month 03 : 0.4 BTC
Month 04 : 0.2 BTC
Month 05 : 0.1 BTC
Month 06 : 0.05 BTC
Month 07 : 0.0125 BTC
Month 08 : 0.007 BTC
Month 09 : 0.004 BTC
Month 10 : 0.002 BTC
Month 11 : 0.001 BTC
Month 12 : 0.0005 BTC

Total over 12 months : 2.877 BTC
Cloudhashing charges a whopping 10% fee, makes the total 2.58 BTC.

Lets see, I invested 5.2 BTC, I will make only half that.
Actual revenue: -2.6 BTC !!!!

Update with actual earnings:
Month 01 : 1.4 BTC -> actual 1.58 : total 1.58 BTC - (10%fee) -0.16 BTC = actual payout 1.42
Month 02 : 0.7 BTC -> actual 1.22 : total 2.81 BTC - (10%fee) -0.28 BTC = actual payout 2.53
Month 03 : 0.4 BTC
Month 04 : 0.2 BTC
Month 05 : 0.1 BTC
Month 06 : 0.05 BTC
Month 07 : 0.0125 BTC
Month 08 : 0.007 BTC
Month 09 : 0.004 BTC
Month 10 : 0.002 BTC
Month 11 : 0.001 BTC
Month 12 : 0.0005 BTC

Yup, month 2 is quite a bit higher then my pre-assumption. Almost half my earnings back already, making my remarks that CloudHashing halves your investment look kinda foolish, though the end result is still not expected to go over 3BTC, still a good (or bad) 2 BTC loss! Unless I'm mistaking again of course...

But... Any cause for that big difference the past month?! Well, the difficulty increase in March was a record low. Only 11%, where a lot more was expected. And that right in the beginning of my contract, when difficulty is not so high yet that 420Ghs still matters. Second increase in March was 17%, so around expected. Result is that biggest part of March I got a better rate then expected.

Expectation is still headed towards a loss on the contract, which should be impossible considering CloudHashing's mission, as stated on their frontpage:

About

Our mission is to ensure the mining profitability of our clients for years to come while the smaller miners become less competitive and less profitable.

.

[blunthammer]

This blog post I did - http://blunthammer.wordpress.com/2014/03/24/the-math-of-bitcoin-iii/ - lays out the economics of ANY hosting company. The ONLY thing that drives down costs in ANY data center is the cost of power, followed closely by the cost of cooling.

In a nutshell a facility that has $.05 per Kwh of power and a 10% overhead will be cheaper than a facility where there is $.10 per Kwh power and 30% overhead for power to cool the heat the computers make.

To mine cost effectively short or long term the ONLY way to do it is to find a facility that is ULTRA efficient with their cooling (PUE of 1.1 or better) and that has inexpensive power, low taxes (on the gear and power). I have been in the data center business 20 years and this is reality. The other reality is that few data centers can cool rigs without it costing 2X because of the concentration of heat.

If you have questions or need help sourcing the right facilities, I do it for a living.

mark at blunthammer dot com

[Mike18feb]

I've redone the math based on the last weeks/months, expectation is quite a bit more optimistic due to the declining increase of difficulty:

Month 01 : 1.4 : 1.4 BTC -> actual 1.58 : total 1.58 BTC - (10%fee) -0.16 BTC = actual payout 1.42
Month 02 : 0.7  0.7 BTC -> actual 1.22 : total 2.81 BTC - (10%fee) -0.28 BTC = actual payout 2.53
Month 03 : 0.4 : 0.7 BTC
Month 04 : 0.2 : 0.4 BTC
Month 05 : 0.1 : 0.3 BTC
Month 06 : 0.05 : 0.2 BTC
Month 07 : 0.0125 : 0.1 BTC
Month 08 : 0.007 : 0.08 BTC
Month 09 : 0.004 : 0.05 BTC
Month 10 : 0.002 : 0.03 BTC
Month 11 : 0.001 : 0.02 BTC
Month 12 : 0.0005 : 0.01 BTC

Total 4,69 -> much more then my original doom scenario but still a loss.

Not to sure how difficulty is going to impact. Rises above 25% don't seem to happen anymore since the beginning of this year, so it's hard to predict a sensible average. Good news for hardware buyers since it means the equipment they buy is profitable a bit longer. Or is it lower because the Bitcoin value is down quite a bit since last year, and will difficulty pick up more speed once value goes up and those that started mining other coins will return to BTC mining?!

[hexdef]

I don't know how much more I could be disappointed by Cloud Hashing.

I ordered the Silver Contract at USD $999 in mid January of this year, 2014.

My 'payout balance' as of today, near 4 months later is a mere USD $59. So, if things go as they have I could be at about USD $200 after my one year contract has expired.

I set my Reinvestment Percentage to 0.0% soon after purchasing the contract given it's horrific ROI.
I understand the volatility of BTC and the difficulty of mining but there is no future vision or recourse offered by CH to improve investor return.
As well, I question the fairness of distribution and extraordinarily bad mining results. Are the rigs/processes not scaling fast enough or at all?

So far, it seems obvious this will be a short play for the founder, reaping exceptional profit very quickly. Whether or not the facility is well engineered/scale-able, likely matters not as the organization appears to have only short term goals.

Anyone considering buying a CH contract (now, May 2014) should please do their research, especially for anecdotal, reflective posts in forums such as these.
I believe the overwhelming number of negative responses, posts, etc.. will likely deter potential small scale investors.

Please do not invest with Cloud Hashing.

[LostDutchman]

I don't know how much more I could be disappointed by Cloud Hashing.

I ordered the Silver Contract at USD $999 in mid January of this year, 2014.

My 'payout balance' as of today, near 4 months later is a mere USD $59. So, if things go as they have I could be at about USD $200 after my one year contract has expired.

I set my Reinvestment Percentage to 0.0% soon after purchasing the contract given it's horrific ROI.
I understand the volatility of BTC and the difficulty of mining but there is no future vision or recourse offered by CH to improve investor return.
As well, I question the fairness of distribution and extraordinarily bad mining results. Are the rigs/processes not scaling fast enough or at all?

So far, it seems obvious this will be a short play for the founder, reaping exceptional profit very quickly. Whether or not the facility is well engineered/scale-able, likely matters not as the organization appears to have only short term goals.

Anyone considering buying a CH contract (now, May 2014) should please do their research, especially for anecdotal, reflective posts in forums such as these.
I believe the overwhelming number of negative responses, posts, etc.. will likely deter potential small scale investors.

Please do not invest with Cloud Hashing.

Oh, ya think?

"Someone" made it quite clear to the crypto community that Cloudhashing was crooked over a year ago and was ignored.

Have a nice day.

My $.02.

[hexdef]

Well, my contribution to the forum is likely geared more toward the non crypto community. I imagine that I'm not the only one investing as a small time bitcoin hobbyist.

Thank you for your response, hopefully this will contribute to more people doing their homework prior to purchase of a CH contract (which I did not do).
 

[Mike18feb]

I'm amazed not many people seem to complain

Anyway, my update for month 3 of CloudHashing mining:

Starting date Feb 15 with 420Ghs
Month 01 : 1.4 : 1.4 BTC -> actual 1.58 : total 1.58 BTC - (10%fee) -0.16 BTC = actual payout 1.42
Month 02 : 0.7  0.7 BTC -> actual 1.22 : total 2.81 BTC - (10%fee) -0.28 BTC = actual payout 2.53
Month 03 : 0.4 : 0.7 BTC -> actual 0.75 : total 3.56 BTC - (10% fee) -0.36 BTC = actual payout 3.20
Month 04 : 0.2 : 0.4 BTC
Month 05 : 0.1 : 0.3 BTC
Month 06 : 0.05 : 0.2 BTC
Month 07 : 0.0125 : 0.1 BTC
Month 08 : 0.007 : 0.08 BTC
Month 09 : 0.004 : 0.05 BTC
Month 10 : 0.002 : 0.03 BTC
Month 11 : 0.001 : 0.02 BTC
Month 12 : 0.0005 : 0.01 BTC

Total expected, around 4,69
Total investment 5.2 BTC

My new calculation rate seems to be quite accurate, 0.7 expected while in reality it was 0.75
For further months I should probably need to recalculate again. Last difficulty jump was 10% only, a record low, which is way under the average I've used. If such low numbers keep up then my average is too high again. But even with that in mind we're still headed for a loss. I'll keep CloudHashing's mission in view as well since they ensure profitabilty:
 

About

Our mission is to ensure the mining profitability of our clients for years to come while the smaller miners become less competitive and less profitable.

.

[chinchs]

I switched to pbmining, at least you buy the Ghs and you start mining (also the price per Ghs is very low 0,005 / Ghs).

[philipma1957]

my investment was 720 usd in june of 2013.

I was supposed to start mining July 4th.  Started July 31st.  I was given under hash from July 4th to Sept of 2013. Then got a bonus 1.25gh in oct.   right now I have 6.25gh hashing for me.

  when all is said and done I will be lucky to lose 300 usd with them.

 the only way I could get a profit is btc needs to jump to 4k by july of 2014.  I have .0424 in current earnings . by july of 2014 that will be about .05  at 4k a coin   .05 would be 200usd  oh that is still short  as I have cashed in 360 usd  .  so even at 4k a coin I would lose .  well it is only money.

[shawshankinmate37927]

my investment was 720 usd in june of 2013.

I was supposed to start mining July 4th.  Started July 31st.  I was given under hash from July 4th to Sept of 2013. Then got a bonus 1.25gh in oct.   right now I have 6.25gh hashing for me.

  when all is said and done I will be lucky to lose 300 usd with them.

 the only way I could get a profit is btc needs to jump to 4k by july of 2014.  I have .0424 in current earnings . by july of 2014 that will be about .05  at 4k a coin   .05 would be 200usd  oh that is still short  as I have cashed in 360 usd  .  so even at 4k a coin I would lose .  well it is only money.

In June of 2013 the exchange rate was about 100 USD/BTC.  That means CloudHashing has converted your 7.2 BTC investment into .0424 BTC--a loss of about 7.1576 BTC or a little over $4000 at the current exchange rate of 570 USD/BTC.

Hopefully others will stop and think twice before buying one of these contracts and will consider just buying the BTC.

[philipma1957]

Updated stats




my grand total for my july contract is 737 usd in  .  I cash when I get the coins.

So my
 nov 14
Nov 26
Dec 15
Jan 8   were all cashed at high values

Feb 26 and today June 5 were about 650  aver.

the early cashing  aug 7 to  oct 26 were at low values. 200 usd or less.


Aug  07 2013---- 0.10600 ---------------   $10.26                        
Aug 21 2013---- 0.17220-----------------   $19.20
Sept 4  2013---- 0.21109----------------    $25.74
Sept 18 2013--- 0.29672-----------------    $37.77
Oct   2 2013---- 0.26425-----------------   $29.79
Oct 26 2013---- 0.11149-----------------    $20.55
Nov 14 2013--- 0.10087-----------------     $41.68
Nov 26 2013--- 0.06246-----------------    $57.85
Dec 15 2013--- 0.05045-----------------     $42.84
Jan   8  2014---0.06125-----------------     $50.23  total of $335.91 usd returned so far.
Feb 26 2014--- 0.05100---------------------$29.55  total of $365.46


June 5 2014 ---0.04403---------------------$29.12  total of $ 394.12 return back on 737



How do I rate them a little better. BUT still a fail

They underpaid from JULY 4 the promised start date up until sept 1. This cost more then 2 btc.

 They gave me 1.25gh free hash to make up for that loss and frankly it does not and will not make up for that.
 
They promised me  my 1 year 5.0 gh contract For July would be extended to Sept 2014 since full hash started in sept 2013.
 It still reads it ends July 2014.


 They promised me a refund Back in July and or August they never gave it.

So while they continue to pay out btc and have not folded they have more to go.


 BUT paying out btc has to count for something - I must say that I am grateful they have continued to pay.




This was not the worst investment ever  just not a good one. 
 



 First part of contract dies in july and it should not since full hashing started in sept. 

   tag on second contract ends in oct.
My advice stands do not invest with them as they do not honor their word.

[Mike18feb]

That is a rather disappointing experience. Maybe not the worst as you say, but really, if all companies dealing with Bitcoin have the same attitude, or worse as many have, Bitcoin would die.