Mining Contracts

[briehost]

Hey everyone,

With the advent of ASICMiner selling shares, I have been seeing a lot of Mining Contracts lately. I remember seeing them before but it seems to have become a lot bigger with ASICMiner on the scene. I have seen cex.io ads here on BitcoinTalk, which is selling contracts through ghash.io. I have even have found mining contracts for sale on ebay.

I have spoken with some people on the matter and a lot are interested in the idea of getting a constant payout over a period of time without needing to maintain machines, but I wonder if this is the only reason people are interested in such deals. It certainly seems like avoiding the headache of having to maintain machines yourself is a big plus, but why not just buy into Bitcoin?

I would like to get a feel for the hash brokering economy so I would like to ask you all the following

Are you interested in mining contracts? Why?
Have you used any services such as cex.io? Are you happy?
Have you seen any scrypt mining contracts offered?
Do you think there's an interest in mining contracts? Why?
Who do you think is the main consumer of such products?

These are just questions to start the discussion, I am very interested in seeing what everyone thinks!

[crudpuppy]

I looked at them when starting more because I could get XXXGhs going for much less startup.  After a while of research and reading into their hidden fees and the "reinvestment fees" and doing some math just doesn't make much sense to me.

[briehost]

I looked at them when starting more because I could get XXXGhs going for much less startup.  After a while of research and reading into their hidden fees and the "reinvestment fees" and doing some math just doesn't make much sense to me.

Hidden fees and reinvestment fees? I haven't found these. Do go on!

[crudpuppy]

For example:
https://www.cloudhashing.com/contracts/
See the revenue reinvestment?  that is a portion of your money they use to build their infrastructure.
for full details on that and other "management fee" that their contract page wont mention:
https://www.cloudhashing.com/terms-conditions

"(a) We collect 10% of the Product as a management fee for operation of the Pool and associated activities (including hosting and power costs)
(b) We collect 30% of the Product (the “Reinvestment Product”) which is then reinvested into additional or replacement Bitcoin Mining Hardware at our sole discretion and in accordance with Clause 2.6.
(c) We collect the remaining Product which is then allocated proportionally to our Contract Holders according to their Capacity."

So you get (mined -10%)-30% = a lot less then it looks like on their contract pages :-)

[klondike_bar]

I looked at them when starting more because I could get XXXGhs going for much less startup.  After a while of research and reading into their hidden fees and the "reinvestment fees" and doing some math just doesn't make much sense to me.

Hidden fees and reinvestment fees? I haven't found these. Do go on!

cex.io is the cleanest ive seen, and right now has no fees other then electrical use. however, the price/GH is a bit high. 1GH is expected to produce 0.13-0.2 BTC in the forseeable future, and current price is around 0.24BTC

that said, this is an excellent way of pinning down a good market value for ASIC devices

[briehost]

I haven't really looked at these guys, but even just 30% is ludicrous!

"It is cheaper to generate bitcoins this way than to buy them directly on an exchange."

That's a pretty bold statement.

[MerchantMiner]

Hey everyone,

With the advent of ASICMiner selling shares, I have been seeing a lot of Mining Contracts lately. I remember seeing them before but it seems to have become a lot bigger with ASICMiner on the scene. I have seen cex.io ads here on BitcoinTalk, which is selling contracts through ghash.io. I have even have found mining contracts for sale on ebay.

I have spoken with some people on the matter and a lot are interested in the idea of getting a constant payout over a period of time without needing to maintain machines, but I wonder if this is the only reason people are interested in such deals. It certainly seems like avoiding the headache of having to maintain machines yourself is a big plus, but why not just buy into Bitcoin?

I would like to get a feel for the hash brokering economy so I would like to ask you all the following

Are you interested in mining contracts? Why?
Have you used any services such as cex.io? Are you happy?
Have you seen any scrypt mining contracts offered?
Do you think there's an interest in mining contracts? Why?
Who do you think is the main consumer of such products?

These are just questions to start the discussion, I am very interested in seeing what everyone thinks!

MAIN PROBLEM, if your paying attention to the news today you will see that silkroad has been shut down and the owner arrested, you will also notice the price of bitcoin has dropped . this is the problem with contracts ,
If you purchase a 1 year contract at XAmount of G/hash or T/hash for a certain price you will expect to earn certain amounts of Bitcoin , all good a ROI you want , but if you pay £1000 for the contract and the price of bitcoins fall as its doing RIGHT NOW then you could end up with bitcoins worth alot less than the amount you paid for the contract.

I would rather invest in the equipment myself that i own control and is in my possession, that way i can continue to mine after the contract has finished ,

This is one of the reasons i wont spend alot of money on these contracts IMO

[crudpuppy]

Just checked out cex.io it is very different from the typical contracts I've seen like the one I linked.  seems interesting but as said its a little pricey I joined will be watching that market :-)

[briehost]

MAIN PROBLEM, if your paying attention to the news today you will see that silkroad has been shut down and the owner arrested, you will also notice the price of bitcoin has dropped . this is the problem with contracts ,
If you purchase a 1 year contract at XAmount of G/hash or T/hash for a certain price you will expect to earn certain amounts of Bitcoin , all good a ROI you want , but if you pay £1000 for the contract and the price of bitcoins fall as its doing RIGHT NOW then you could end up with bitcoins worth alot less than the amount you paid for the contract.

I would rather invest in the equipment myself that i own control and is in my possession, that way i can continue to mine after the contract has finished ,

This is one of the reasons i wont spend alot of money on these contracts IMO

Just saw this. Pretty crazy. Do you think difficulty will be going down accordingly? Yes I do think that having your own equipment is still the best way to go. But there are some places which boast very cheap power and there are definitely economies of scale when mining.

[briehost]

cex.io is just bitcoin mining contracts, right?

[btdir]

who else is selling shares?

[semaster]

who else is selling shares?

look at http://bit-miner.com for shares

[crudpuppy]

cex.io is basically trading in ghs rather then a set price for Xghs for X long like what I'm use to calling "mining contracts"

Personally I like this method  didn't like contracts in part due to the fees.   

[Davyd05]

Are there any numbers. or estimates on how much gh/s could be added via the reinvestment fees @cloudhash. I suppose it could be a marketing ploy but I thought it might benefit the buyer in the sense of at least somewhat of a small scale gain in gh/s to help perhaps break even sooner by not suffering from what I've read a continued speedy growth in % of difficulty as of late.

[odolvlobo]

For example:
https://www.cloudhashing.com/contracts/
See the revenue reinvestment?  that is a portion of your money they use to build their infrastructure.
for full details on that and other "management fee" that their contract page wont mention:
https://www.cloudhashing.com/terms-conditions

"(a) We collect 10% of the Product as a management fee for operation of the Pool and associated activities (including hosting and power costs)
(b) We collect 30% of the Product (the “Reinvestment Product”) which is then reinvested into additional or replacement Bitcoin Mining Hardware at our sole discretion and in accordance with Clause 2.6.
(c) We collect the remaining Product which is then allocated proportionally to our Contract Holders according to their Capacity."

So you get (mined -10%)-30% = a lot less then it looks like on their contract pages :-)

This is a rip-off. Don't forget that they also collect 100% of your initial payment.

[JWU42]

I have seen a "shareholders" option in the ghash.io settings.  It seems you can set up multiple names/BTC addresses with a % output.  Not sure if the output is based on a worker or total?!?

That is kinda cool 

[MerchantMiner]

For example:
https://www.cloudhashing.com/contracts/
See the revenue reinvestment?  that is a portion of your money they use to build their infrastructure.
for full details on that and other "management fee" that their contract page wont mention:
https://www.cloudhashing.com/terms-conditions

"(a) We collect 10% of the Product as a management fee for operation of the Pool and associated activities (including hosting and power costs)
(b) We collect 30% of the Product (the “Reinvestment Product”) which is then reinvested into additional or replacement Bitcoin Mining Hardware at our sole discretion and in accordance with Clause 2.6.
(c) We collect the remaining Product which is then allocated proportionally to our Contract Holders according to their Capacity."

So you get (mined -10%)-30% = a lot less then it looks like on their contract pages :-)

This is a rip-off. Don't forget that they also collect 100% of your initial payment.

cloudhashing is one to avoid they want you to pay for there kit so when they have enough they will shut down the Public Front fuck you all off and then mine for them selfs , BEWARE of Mining Contracts ive seen a few scams out there already

[crudpuppy]

I have seen a "shareholders" option in the ghash.io settings.  It seems you can set up multiple names/BTC addresses with a % output.  Not sure if the output is based on a worker or total?!?

That is kinda cool 

Its not real beneficial without an api though.

[JWU42]

I have seen a "shareholders" option in the ghash.io settings.  It seems you can set up multiple names/BTC addresses with a % output.  Not sure if the output is based on a worker or total?!?

That is kinda cool 

Its not real beneficial without an api though.

Beneficial for whom?  The shareholders?

[crudpuppy]

Nah,  I meant to do any sort of system around it.  The only way in given system to "resell" their hashing would be manual for you and blind for the shareholders as there is no way they could see their hashing nor anyway to at all automate your purchasing or assignments.

The least that would be needed to resell would be a way to expose hashing information to shareholders.  Who would want to own hashin they can't even see production from  just an occasional bitcoin payout.