Cloud Mining with Re-Invest - Killer Investment?

[michaelz23]

Hi guys,

I am at Hashflare (200T for 30k) and am thinking about the re-invest. If I just take the BC, I will end up with around 8 of them after 1 Year after fees - worth, let's say 56k (BC at 7k when I sell - just for the math). When I reinvest daily, My Excel tells me that I can make up to 500k. Let's half that just to be sure. But also 132k seems like a really good gain, even when I have to wait a little longer to realise it. Am I missing something? Did anyone do a calculation for this inclusive the expected rise in difficulty?

My assumptions:
Each invest creates a new 1 year contract for the new amount
100% reinvestment over 1 year then 1 year or profit taking
BC profit per TH = 0,0001 BC
Bitcoin Price Average = 7,000 USD
Price per TH: 150 USD

Here the sheet: https://docs.google.com/spreadsheets/d/179tfdknHROHfa1z7Cd6-o4dMcOgv4u7yGYFdOw2ZHAA/edit?usp=sharing

I also found this calculator: https://docs.google.com/spreadsheets/d/1ni4W6YkJdt8W9Hrn_S4qwFkQNeMNfdlmE8zjo70rgcI/edit#gid=685808914

I would love to get your opinions. Or even better, someone who can do a better calculation or has experience with this topic. I think, this could be a great investment.

Thanks
Mike

[buwaytress]

Not sure how you managed to miss the hundreds of threads created here about cloud mining and how it's a borderline scam (though more people would just say it's an outright con). Since I'm in the mood:

You have a couple of assumptions with your calculations, with serious consequences:

1. The amount of BTC you "mine" will decrease almost exponentially, given Bitcoin's trend of increasing difficulty (what about the dips due to Bitcoin Cash, you say? Well take a look at the charts, the difficulty still climbs, in fact, spiking after the dips). Your contracts, as specified in the FAQ (not that I needed to confirm it), are subject to "maintenance and electricity fees". Unlike your earnings, these are static and will probably increase. You can try researching just how many times and how often cloud mining companies adjust their fees. Things always get more expensive, you know, as cloud mining is such a costly business with those armies of rigs that keep breaking down.

2. Because of assumption #1, your contract will not live to see its end. At some point before the 365 days are over, your "mining income" will actually be less than the daily fees deducted. At this point, your contract automatically expires.

A combination of 1 and 2 means that in a best-case scenario, you will probably only recoup your investment after many months, with very little profit to show, if any. If you're fortunate enough to have this happen, you'll also have a high number of inputs in your Bitcoin wallet, making your coins very expensive to spend. You'll get frustrated to see your profits diminish further with fees.

The more likely outcome: your contract expires, and you've earned less than you paid for, as hundreds of cloud mining customers have taken to the Internet to rant about.

[michaelz23]

Hi mate and thanks for the answer... I did not find anything meaningful about re-investment and good information seem to go under when people complaining that their 100 GH contract went haywire - which they paid a prime price for.

I am mining to hold, so I am all about the discounted price. If I don't have that, no point in mining. I can tax deduct mining contracts through my company which decreases the initial investment risk a bit, that's why I thought it would eb a good idea. And I just bought 150 T on Genesis. Bummer

Is there a good difficulaty adjustment setting for the BC calculators - some proven numbers? I get so many opinions but it is so hard to find facts.

I am new in the crypto world. And so far loving it. The blockchain is so sexy (I am a geek), so I sort of got a little overexcited.

Well, if the BC hits the 100k, those mistakes will be small enough J

Thanks again
Mike

[buwaytress]

Hi mate and thanks for the answer... I did not find anything meaningful about re-investment and good information seem to go under when people complaining that their 100 GH contract went haywire - which they paid a prime price for.

I am mining to hold, so I am all about the discounted price. If I don't have that, no point in mining. I can tax deduct mining contracts through my company which decreases the initial investment risk a bit, that's why I thought it would eb a good idea. And I just bought 150 T on Genesis. Bummer

Is there a good difficulaty adjustment setting for the BC calculators - some proven numbers? I get so many opinions but it is so hard to find facts.

I am new in the crypto world. And so far loving it. The blockchain is so sexy (I am a geek), so I sort of got a little overexcited.

Well, if the BC hits the 100k, those mistakes will be small enough J

Thanks again
Mike

Well, I can only wish you well. If it's any comfort, the ones who do come away with profits tend to be the bigger clients with significant packages - I would say you definitely fall into this category!

I'm not into recommending cloud mining projects, but there are some similar projects that work on the concept of cloud mining, except that you purchase electricity redemptions, instead of fixed hash power which is the traditional model of cloudmining. Two of these are Gigawatts and Hydrominer (you can check out their pages). They are both operational from next year and appear to be a bit more transparent than Genesis/Hashflare, at least in terms of hardware.

Don't know of any calculators that have good adjustment settings, but hydrominer above seems to have in their whitepaper historical data from some cloudmining competitors, I believe hashflare is one. Those are as close to facts as I've seen, if you can trust the data.

As a matter of curiosity, I do have a test account at eobot, where I've reinvested every daily faucet earning into hash power. It's not worked out to what I estimated myself, thanks to Bitcoin's price increase and difficulty, but months of reinvestment certainly seems to have cut full ROI time significantly.

Oh, and welcome to the world of crypto! I consider myself new too, despite being in it for over a year.

[michaelz23]

Thanks. I got my eye on Hydrominer and will probably drive down and visit them. A lot os happening in the mining world, now a new chip seems to be coming out. Maybe this market is really just to volatile to invest too much into it.

I am really pumped on the Altcoin trading, though. Last question: I am trying to get into the community and connect with people to discuss investment strategies and so forth. I am not giving too much about the youtube channels, do you know a good place to start making such contacts?

[Maveth13]

I don't know why people still put trust cloud mining, especially on hashflare. I don't remember when but they had an issue where they changed their lifetime contracts to 1 year contracts including those existing/bought contracts, WITHOUT any notice to their customers. Besides, their rates are low and fees are ridiculously high.

[michaelz23]

That contract thing was shady but I signed up for 1 year, so I had open eyes. I don't think that lifetime will give much more profit due to difficulty rising. But the rates seem OK, they are pretty much the lowest on the market, or do you know any better way of cloud mining? BTW: So far (in the first 2 weeks), the payouts have been really good...

[buwaytress]

Thanks. I got my eye on Hydrominer and will probably drive down and visit them. A lot os happening in the mining world, now a new chip seems to be coming out. Maybe this market is really just to volatile to invest too much into it.

I am really pumped on the Altcoin trading, though. Last question: I am trying to get into the community and connect with people to discuss investment strategies and so forth. I am not giving too much about the youtube channels, do you know a good place to start making such contacts?

A lot has happened in the mining world, yes, but probably not any more or less than it has been for the past five years or so! In fact, I think the introduction of ASICs was the last really big thing to happen, so new chips are to be expected regularly. Miners themselves will tell you that it's hard enough to keep profitable on their own rigs, so you can imagine more so if you're on cloud mining contracts with lower profit margins.

This year cloud miners will say they made profits - but this has really been down to the price of Bitcoin which is >700% higher than it was less than a year ago. If you had simply bought Bitcoin with half your money and used the other half to buy a 1-yr hashflare contract a year ago... Now imagine if the price went down instead...

Still, good luck with your journey, don't forget to hit me up in PM if you actually do visit Hydro (I'm curious).

To your last question... can't say I've found TOO many useful places to learn, but you should of course spend time in this section:
https://bitcointalk.org/index.php?board=8.0

Goes without saying, don't follow anything blindly.