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Author Topic: Minergate cloud contracts have raised my suspicion  (Read 302 times)
newplato
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December 03, 2017, 01:52:16 PM
 #1

Hello all.

In the course of the last month I purchased five small BTC contracts in minergate and two in XMR.  After observing inconsistencies in my profits I started investigating a bit deeper and I came to the conclusion that minergate's practices are at least suspicious.

Here is a table of my contracts

On 11 Nov 2017  I bought 275 GH/s I paid 0.00588500  BTC with average profit   0.00001617 BTC/day  or 5.88 satoshi/GH
On 14 Nov 2017  I bought   60 GH/s I paid 0.00134760  BTC with average profit   0.00000369 BTC/day  or 6.15 satoshi/GH
On 18 Nov 2017  I bought   60 GH/s I paid 0.00110520  BTC with average profit   0.00000302 BTC/day  or 5.03 satoshi/GH
On 26 Nov 2017  I bought 140 GH/s I paid 0.00233660  BTC with average profit   0.00000642 BTC/day  or 4.59 satoshi/GH
On   2 Dec 2017  I bought   80 GH/s I paid 0.00117360  BTC with average profit   0.00000322 BTC/day  or 4.03 satoshi/GH

As we can see from the above table the profit per GH is pretty inconsistent and can differ by up to 53%.  I find it hard to believe that this is due to factors like luck of the pool.  Minergate claims that collaborates with hashing24 and that they offer real mining contracts.

The suspicious part here is that for all five contracts the amount of BTC paid divided by the average BTC gained per day is the same and exactly 365 days.  This means that the profit you get is fixed by the amount of BTC you paid and not by the amount of hashing power you purchased.  Assuming constant difficulty, ROI is fixed to one year at the time of purchase.

From minergate's part there is no information to be found regarding these practices.  I have raised a support ticket asking for clarifications, although from past experience with them I have little hope I will get any answer at all.

Let's also mention that my two XMR contracts follow exactly the same pattern, ROI in one year assuming no change in difficulty.

Conclusions     In minergate you don't get paid proportionally to the hashing power you buy, but rather your profit if fixed by the amount of BTC spent.  These practices are at least suspicious and instead of mining it feels like you lend money to them.  Since the difficulty of BTC changes it remains to be seen whether you ever get your investment back.

Open questions   Since my contracts are relatively new I would like to know what happens when the mining difficulty changes.  Any of you with older contracts can share your experience and tell us how profit changes with time? What is your ROI time?  By ROI time I mean the time you need to get your satoshi back, not the time to get your dollars back.  This is a common misconception I encountered in minergate chat, which misconception is supported by the fact that minergate claims ROI in 120 days and they only save your daily profit in dollars instead of BTC.

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ahmaddanyal06
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December 03, 2017, 07:05:52 PM
 #2

This means that the Minergate profit calculator is complete BS?

According to the calculator, if I purchase 24 Terahashes of mining power, I should make approximately $400 per week or $1600 per month.

24 Terahashes cost about $3500 right now.

This means that the ROI should be 2.2 months, however according to your data it is 1 year.

I personally would not invest in a company that lies to their customers.

https://minergate.com/calculator/cryptonote
newplato
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December 03, 2017, 07:24:51 PM
 #3

Hello ahmaddanyal06 and thank you for being my first comment.

Minergate has two profitability calculators for BTC, one for pool mining and another one for cloud mining.

I calculated that 24 TH/s give you profit $410 per week in pool mining and $70 per week in cloud mining.  This is because for cloud mining you have to pay the maintenance fee, but even that does not explain the factor of 6 in difference.  So, I suspect they keep a lot of your profit for themselves.  As a matter of comparison, currently the profit is twice the maintenance.  So, in ideal conditions, with 24 TH/s you should have made $270 per week, but they only pay you $70.

Another important point is that ROI is one year, but given the difficulty does not change.  For comparison, I mention that in one year the difficulty of BTC went up by an order of magnitude, around ten times.

I think the suspicion here is that your profit does not depend on your H/s, but on how many BTC you paid for the contract.  What I'm afraid is that they will keep reducing the profit every day, so that in the end ROI will be very difficult to reach.

I have raised my concerns to minergate, I will update if and when they reply, although from past experience, they might never do so.

Let me know if you want to discuss anything further.

Best regards.
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December 03, 2017, 07:28:51 PM
 #4

Yes, please do update me when you get a response. For now, I think I will either build a cyptonight mining rig or invest in hashflare.

Thanks for your data, it really helped me.
socks435
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December 03, 2017, 08:29:14 PM
 #5

Honestly i do not trust their service because there are lots of people already complain about their service that is why their mining contract is really not profitable and most of the cloud mining are scam so just invest that you can afford to lose..
But i suggest to no invest because i heard that there are lots of people who scam with cloud mining ..


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ahmaddanyal06
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December 03, 2017, 08:34:20 PM
 #6

Might as well just buy hardware and do yourself, right?
alani123
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December 03, 2017, 08:36:58 PM
 #7

It's been said over and over again, but I think that it's worth too keep pointing it out. Cloud mining is not an investment by any means. The provider could by all means be directly lying to the user, selling a service that is entirely virtual. Recycling some money under the premise that users will never turn out profit. This is what happens all the time, it's 100% safe for the provider while the users takes on a huge risk. Just look into buying mining equipment. It will give you a lesser risk and a greater potential return on your money.














 

 

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pixie85
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December 03, 2017, 09:35:02 PM
 #8

It's been said over and over again, but I think that it's worth too keep pointing it out. Cloud mining is not an investment by any means. The provider could by all means be directly lying to the user, selling a service that is entirely virtual. Recycling some money under the premise that users will never turn out profit. This is what happens all the time, it's 100% safe for the provider while the users takes on a huge risk. Just look into buying mining equipment. It will give you a lesser risk and a greater potential return on your money.

You are right. I really can't understand why they are still buying contracts when it has proven to be unprofitable time and time again.


Please guys stop making threads like: tell me about cloud mining, or what is cloud mining. I've read so many threads with people asking for help because their cloud mining tickets are being unanswered or they got scammed.
You have at least one on the same page where you've posted your thread. Are you blind or just ignorant?
https://bitcointalk.org/index.php?topic=2259139.0

newplato
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December 03, 2017, 10:25:49 PM
 #9

Please guys stop making threads like: tell me about cloud mining, or what is cloud mining. I've read so many threads with people asking for help because their cloud mining tickets are being unanswered or they got scammed.
You have at least one on the same page where you've posted your thread. Are you blind or just ignorant?

Dear pixie85,

thank you for your comment.  First off please refrain from calling people names so quickly or posting generic comments.

I have spent quite some non trivial time on researching a particular aspect of a particular company and I'm offering to the community my results, because I find them interesting.  Please, spend some time and carefully read my post.  After spending time in minergate's chat I realized that people there are not aware of this particular aspect of their contracts and I hope my post will shed some light.

The central topic of my post is not to call somebody or something a scam, or ask for help about unanswered tickets, but rather mathematically show a very interesting phenomenon in minergate's contracts, which I haven't seen discussed somewhere else.  I would be glad to hear back from you if you have anything interesting to comment.

Best regards.
ahmaddanyal06
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December 03, 2017, 10:45:01 PM
 #10

It's been said over and over again, but I think that it's worth too keep pointing it out. Cloud mining is not an investment by any means. The provider could by all means be directly lying to the user, selling a service that is entirely virtual. Recycling some money under the premise that users will never turn out profit. This is what happens all the time, it's 100% safe for the provider while the users takes on a huge risk. Just look into buying mining equipment. It will give you a lesser risk and a greater potential return on your money.

You are right. I really can't understand why they are still buying contracts when it has proven to be unprofitable time and time again.


Please guys stop making threads like: tell me about cloud mining, or what is cloud mining. I've read so many threads with people asking for help because their cloud mining tickets are being unanswered or they got scammed.
You have at least one on the same page where you've posted your thread. Are you blind or just ignorant?
https://bitcointalk.org/index.php?topic=2259139.0



But, Genesis Mining and Hashing24 cloud mining is legit...
patnor101
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December 04, 2017, 06:40:40 AM
 #11

Minergate contracts are very bad indeed. I have test purchased some and I was really stunned by payout rate. I thought that profit will be split like 50/50 and I was in a peace with that but it is rather 80/20.
I got 3406Gh/s for which payout was $1.52 daily.

I said was as I cant check exact numbers as as of now minergate cloud contracts are gone and there is quite a bit of panic in their troll box. It is full of people who cant see their contracts. They literally disappeared from users accounts. 
Also withdrawals are failing so even if you do have something there nobody can get their money out.
Popcorn time.
alani123
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December 04, 2017, 07:01:19 AM
 #12

It's been said over and over again, but I think that it's worth too keep pointing it out. Cloud mining is not an investment by any means. The provider could by all means be directly lying to the user, selling a service that is entirely virtual. Recycling some money under the premise that users will never turn out profit. This is what happens all the time, it's 100% safe for the provider while the users takes on a huge risk. Just look into buying mining equipment. It will give you a lesser risk and a greater potential return on your money.

You are right. I really can't understand why they are still buying contracts when it has proven to be unprofitable time and time again.


Please guys stop making threads like: tell me about cloud mining, or what is cloud mining. I've read so many threads with people asking for help because their cloud mining tickets are being unanswered or they got scammed.
You have at least one on the same page where you've posted your thread. Are you blind or just ignorant?
https://bitcointalk.org/index.php?topic=2259139.0


But, Genesis Mining and Hashing24 cloud mining is legit...
No such thing as legitimacy when it comes to cloud mining. It is all a sham and people should stay away from such  "investments".














 

 

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crazyivan
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December 04, 2017, 07:43:40 AM
 #13

It's been said over and over again, but I think that it's worth too keep pointing it out. Cloud mining is not an investment by any means. The provider could by all means be directly lying to the user, selling a service that is entirely virtual. Recycling some money under the premise that users will never turn out profit. This is what happens all the time, it's 100% safe for the provider while the users takes on a huge risk. Just look into buying mining equipment. It will give you a lesser risk and a greater potential return on your money.

You are right. I really can't understand why they are still buying contracts when it has proven to be unprofitable time and time again.


Please guys stop making threads like: tell me about cloud mining, or what is cloud mining. I've read so many threads with people asking for help because their cloud mining tickets are being unanswered or they got scammed.
You have at least one on the same page where you've posted your thread. Are you blind or just ignorant?
https://bitcointalk.org/index.php?topic=2259139.0


But, Genesis Mining and Hashing24 cloud mining is legit...
No such thing as legitimacy when it comes to cloud mining. It is all a sham and people should stay away from such  "investments".




+1 to this one. All you do with cloud mining is to give them money so they can grow their farms even further. Plus have chosen one of the most suspicious ones cloud mining options. Really sorry for this, but you will not find any logic in these payouts which will lead you towards returning your investment and making some money.

pixie85
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December 08, 2017, 09:47:50 PM
 #14


Dear pixie85,

thank you for your comment.  First off please refrain from calling people names so quickly or posting generic comments.

A generic comment? I'm just fed up with reading about this or that a cloud mining company has done wrong when their whole business plan is based on people having no idea what mining is, not understanding simple math, and being too lazy and too greedy to read about cloud mining. They prefer to put their money in and wait for the mining operator to drown them in profits.

I have spent quite some non trivial time on researching a particular aspect of a particular company and I'm offering to the community my results, because I find them interesting.  Please, spend some time and carefully read my post.  After spending time in minergate's chat I realized that people there are not aware of this particular aspect of their contracts and I hope my post will shed some light.

The central topic of my post is not to call somebody or something a scam, or ask for help about unanswered tickets, but rather mathematically show a very interesting phenomenon in minergate's contracts, which I haven't seen discussed somewhere else.  I would be glad to hear back from you if you have anything interesting to comment.

Best regards.

It seems you haven't spent enough time researching them to see that they are scamming people. People on their chat aren't aware because they are exactly the type of people that I've described.


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