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Author Topic: Cloud Mining - Where Are The Reputable Operators?  (Read 89 times)
Kruddler
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March 20, 2018, 11:25:34 PM
 #1

A lot of people don't like the idea of cloud mining. My guess this is mostly because all the major operators seem ridiculously dodgy. But, the theory of cloud mining is very solid. It's based on exactly the same principle as cloud computing. I work in the software industry and I do not want to be maintaining servers. So, we lease computers from Microsoft Azure. It's expensive, and we could definitely get the computing power cheaper if we just built our own servers and put them in a safe location. But, this is not practical for many reasons. This is even more so the case with mining. ASIC computers are extremely noisy, hot, and chew threw electricity. So, it only makes sense that these computers be placed in server farms where electricity is cheap and hopefully sustainable.

The question comes in: if mining is profitable, then why don't the cloud mining services just build farms and collect the profit for themselves? The answer to this is very simple. Mining is not necessarily profitable. It can actually run at a loss. As mining difficulty goes up, the profitability goes down. Therefore, mining is in some sense gambling. Leasing out ASIC computers is necessarily profitable so long as the owners of the business properly calculate all their expenses and charge a price which is high enough to make a profit. So, as a business venture, at least hypothetically, cloud mining is absolutely on par with services like Microsoft Azure and so on. Theoretically speaking, when you buy cloud mining, you're not paying for Bitcoin, you are paying for the expenses that it takes to run the server farms: power, land, staff, air conditioning, security, and so on. It's a no brainer that this makes sense as a business model.

And yet, what we mostly see in the cloud mining space is dodgyness. Reviews of cloud mining operations like Hashflare and so on are littered with people complaining about issues, hidden fees, and what's worse is that there's no way to confirm the financials on any of these companies. Where are these businesses being run? Under what regulation are they run? Do they have any insurance to back their businesses?

Bitcoin.com has recently opened this service. It's far too early for me to tell if this is legit or not, but it's the only service that even looks remotely legit at this point. What makes me think it is legit is that it has a minimum starting amount of around $500 USD, and their own calculator, as of right now estimates that at current rates you will make an approximate loss of 45.76%
https://pool.bitcoin.com/index_en.html

Are there any other cloud mining ventures around where we can validate things like company location, company financials, are running under a recognized regulatory body and so on?

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March 20, 2018, 11:29:37 PM
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 #2

The only cloudmining operation I remotely trust is Hashnest, and even they have major issues regarding site maintenance and withdrawals and deposits every now and then. They used to be bustling with activity and the site hardly had any hiccups when I began using them back in 2015, but things have slid downhill since. Last miner released on Hashnest was the L3, haven't heard any news about future releases onto the Hashnest market since then. Considering Bitmain is one of the big players (if not the biggest), there's a very slim chance they'd try to run off with my money (why risk your reputation for something like this?), and for that reason I trust them. They're owned by Bitmain, so everything about em should be tied to Bitmain.

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March 20, 2018, 11:32:14 PM
 #3

Is their any way to validate their business? Are they running under regulation in a country that enforces the regulation?
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March 20, 2018, 11:34:36 PM
 #4

Is their any way to validate their business? Are they running under regulation in a country that enforces the regulation?
Their validation and trust pretty much comes solely from the fact that Bitmain themselves run them, and the fact that they've allowed users to redeem hashrate for actual machines once they became unprofitable (which I have yet to see any cloudmining operation do), among several other things. To be completely honest I don't know what regulation they run under and if China (or whatever country should be responsible for them if there even is one) enforces them. Being tied to Bitmain should be enough to make them reputable compared to operations like Genesis or Hashflare.

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March 21, 2018, 01:30:21 AM
 #5

There isn't a lot of regulations for most of the world about cloud mining, so even if a company is incorporated within a country it doesn't mean that it is actually regulated by anyone or audited by anyone for their financials and miner reserves.

You usually have to trust that they are actually mining, and take their word. But research can certainly help as well.

If the company behind the cloud mining venture actually has a pool or manufactures mining equipment themselves, then there is a higher likelihood of it being a legitimate cloud mining site. But even then that won't guarantee profits, most of the time it is going to be resulting in a loss due to the maintenance fees.

The thing with cloud mining is that you try to make a profit, and companies charge you maintenance fees and have the right to terminate your contract as soon as it hits 0 profitability. You do not get any principal back at that point. That's different from cloud hosting where the main aim isn't to be an investment.

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March 21, 2018, 07:51:50 AM
 #6

Anytime I see someone ask about cloud mining I tell them to turn and run. It is essentially a Ponzi scheme used to increase their own hardware.

When I was brand new to crypto I was mining at bitcoin.com pool, and followed a lot of questions on their forum regarding the cloud mining contracts. What I picked up on was that you really only made money on any of the contracts if the price of BTC rose while you were on contract, or you held the coins mined until the price rose. So most of the time you were better off buying coins and holding them as you would not have to cover the daily fee. In the world of cloud mining I guess you could say this is reputable, as they haven't just run off with anyone's money.

Many people got burned because there is usually a clause that allows them to terminate the contract if it becomes unprofitable( looks like it is there to help the customer) but if you in reality want to mine through the good and the bad you should be able to mine at a loss until you decide to end the contract. During September to December they were constantly out of contract availability because they couldn't get enough hardware, this is because every dollar given to them just helped them expand their operation.

In the end I always ask people why would they give you the profits they could keep for themselves?

So like with any good scheme, some people make money and then a lot of people lose, or get lucky because the price of BTC rose and they did come out ahead just not as far as they would have been with their own coins.

All of what I said doesn't even include the many blatant scams that pop up.


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March 21, 2018, 08:06:24 AM
 #7

The principle might be "solid" but none of these companies, not even the one you say you trust the most, can show you any proper documentation that proves how solid their business model is. All you get from them is some kind of simple calculator for profits, but they don't even dare to show you a financial record for their past years of operation, or even their average profits made for each customer.

So no, I don't think they really know what they are doing (except make good money for themselves).

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March 21, 2018, 11:51:02 AM
 #8

There are none and thats business of ponzi schemes so you will never hit any of the legit cloud miners these days. With the decrease in the prices of the bitcoin and increased in the difficulty level it has become even more worst than we could think to mine it over the cloud servers. I mean they have to take out their commissions, electricity bills, maintain bills and off course withdraw fees too. These things get so much that our contract can never cover these all and we never hit the ROI point in lifetime. Thats the calculator which talks about it before you can predict that and thus depending on that math I dont think that there will be any legit service in the future also.


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March 21, 2018, 12:13:58 PM
 #9

A lot of people don't like the idea of cloud mining. My guess this is mostly because all the major operators seem ridiculously dodgy. But, the theory of cloud mining is very solid. It's based on exactly the same principle as cloud computing. I work in the software industry and I do not want to be maintaining servers. So, we lease computers from Microsoft Azure. It's expensive, and we could definitely get the computing power cheaper if we just built our own servers and put them in a safe location. But, this is not practical for many reasons. This is even more so the case with mining. ASIC computers are extremely noisy, hot, and chew threw electricity. So, it only makes sense that these computers be placed in server farms where electricity is cheap and hopefully sustainable.
Maybe you should know the basic principle of bitcoins,mining isn't profitable in the long run,especially if your competitors are running farms thrice the size of your set-up.Where are these miners hosted ? In a low cost electricity region ? Are they actually present or just money is taken for other investment purposes ?
IMHO,I don't consider any cloud mining operation real if I don't get to see their mining location personally through either visits or photographs.

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Mister1k
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March 21, 2018, 01:05:29 PM
 #10

Electricity becomes shit recent days in my location as well. Some of the people invested on contracts and get the earning easily without big efforts. However I am not sure how we can find the best cloud mining platform except genesis and hashflare.

About this project I did not find the bad reviews on the badnews site. Hopefully this would be reputed one but I am still not sure about it.

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March 21, 2018, 01:08:29 PM
 #11

There are none and thats business of ponzi schemes so you will never hit any of the legit cloud miners these days. With the decrease in the prices of the bitcoin and increased in the difficulty level it has become even more worst than we could think to mine it over the cloud servers. I mean they have to take out their commissions, electricity bills, maintain bills and off course withdraw fees too. These things get so much that our contract can never cover these all and we never hit the ROI point in lifetime. Thats the calculator which talks about it before you can predict that and thus depending on that math I dont think that there will be any legit service in the future also.
I do not understand why there are still many people who trust cloud mining. Whereas cloud mining is clearly a ponzi scheme that is already known by many people that it is very detrimental. Cloud mining only performs mathematical calculations only and without anything real. Almost all cloud mining always ends with a scam, so if there are still people who are mired with cloud mining then I recommend to stop immediately. lest we experience a much higher loss, believing that we can start from scratch by choosing a much better thing. Never try anything vain !!! .

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stomachgrowls
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March 21, 2018, 06:06:44 PM
 #12

Electricity becomes shit recent days in my location as well. Some of the people invested on contracts and get the earning easily without big efforts. However I am not sure how we can find the best cloud mining platform except genesis and hashflare.

About this project I did not find the bad reviews on the badnews site. Hopefully this would be reputed one but I am still not sure about it.
Genesis and Hashflare doesnt have any issues? Then better think off again if you do tried to read up then you will able to see their own problems but still they are operation since they can able to solve out those problems.I can say they are reputable since they are operational for how many years but it wont really be a valid reason for me to invest into cloud mining.


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richardsNY
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March 21, 2018, 07:12:28 PM
 #13

I do not understand why there are still many people who trust cloud mining. Whereas cloud mining is clearly a ponzi scheme that is already known by many people that it is very detrimental.

The main point of importance in this matter is that thousands and thousands of people enter the crypto world on a daily basis, which means that cloud mining will always be in demand. For some reason everyone wants to get involved in mining, but that in most cases isn't viable because of the cost involved to buy hardware, etc. In order to avoid that, they go for cloud mining. It just requires one investment, and they start "mining" directly. In their eyes they are making money, but that's not true -- you only earn money after you reached the break-even point. As soon as you reinvest your payouts, you have to start from scratch again. It's something people don't realize.

Cloud mining only performs mathematical calculations only and without anything real.

Cloud mining isn't doing anything. Your contracts only reflecting a certain percentage of their total hash power, and obviously, that's assuming they are actually mining. If they aren't mining at all, you are being trolled big time.
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March 22, 2018, 09:55:23 PM
 #14

A lot of people don't like the idea of cloud mining. My guess this is mostly because all the major operators seem ridiculously dodgy. But, the theory of cloud mining is very solid. It's based on exactly the same principle as cloud computing. I work in the software industry and I do not want to be maintaining servers. So, we lease computers from Microsoft Azure. It's expensive, and we could definitely get the computing power cheaper if we just built our own servers and put them in a safe location. But, this is not practical for many reasons. This is even more so the case with mining. ASIC computers are extremely noisy, hot, and chew threw electricity. So, it only makes sense that these computers be placed in server farms where electricity is cheap and hopefully sustainable.

In the case of a server, yes, it can be remotely placed from wherever your operations are headquartered, but in the case of bitcoin miners, you really need to think hard for it since this would be your money-making machine, and if you are being overwhelmed by the amount of work needed to get your operations going without a hitch, then maybe bitcoin mining isn't just for you to take your profits on.

The question comes in: if mining is profitable, then why don't the cloud mining services just build farms and collect the profit for themselves? The answer to this is very simple. Mining is not necessarily profitable. It can actually run at a loss. As mining difficulty goes up, the profitability goes down. Therefore, mining is in some sense gambling. Leasing out ASIC computers is necessarily profitable so long as the owners of the business properly calculate all their expenses and charge a price which is high enough to make a profit. So, as a business venture, at least hypothetically, cloud mining is absolutely on par with services like Microsoft Azure and so on. Theoretically speaking, when you buy cloud mining, you're not paying for Bitcoin, you are paying for the expenses that it takes to run the server farms: power, land, staff, air conditioning, security, and so on. It's a no brainer that this makes sense as a business model.

You've pretty much contradicted yourself in the first paragraph lol. Cloud mining is a great business model if there'd be loads of users wanting to overpay for a service that doesn't guarantee them money in return. This is great for the mining operators however for its peers and users, it isn't economical and they're just giving money away. That's why we've distanced ourselves from cloud mining since we only pay these operators so they can expand their operations but the reward for us is nil.

And yet, what we mostly see in the cloud mining space is dodgyness. Reviews of cloud mining operations like Hashflare and so on are littered with people complaining about issues, hidden fees, and what's worse is that there's no way to confirm the financials on any of these companies. Where are these businesses being run? Under what regulation are they run? Do they have any insurance to back their businesses?

Because the machines and staffs are non-existent; most of these cloud mining services are ponzi schemes riding the hysteria of bitcoin to generate them money. Imagine being locked-up in a contract with 'hashing power' which you cannot sell if you want to and will give you pennies in return, for a year, less the mining costs and maintenance fees. You're being robbed at in the light of day yet you are willing to give your money to your robbers.

Are there any other cloud mining ventures around where we can validate things like company location, company financials, are running under a recognized regulatory body and so on?

None.

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March 24, 2018, 04:59:46 PM
 #15

Completely shit to see the sudden emergence of the cloud mining sites question. If newbies want to learn the about the cloud mining. Please go to mining section and read the pinned message shared by the mprep moderator.
He clearly states that you are in the looking for ponzi scheme(cloud mining). Hope all the thread has been shared and created in this section.
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