[Not] Good price at CEX.io

[Hashcesar84]

So i was just tapping some numbers in to http://mining.thegenesisblock.com and i might have this wrong but it looks a lot like you need a price of about 0.05 BTC per GH to turn a profit?

Am I missing something?

yes! ghs on cex are the opposite of bitcoin! price will go mathematically down

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[byronbb]

Could a true GHs exchange be developed? Cex.io owns the whole sell side. (lol). A true exchange would have miners able to actually sell into the exchange. Obviously they would have to be held to a contract and would only have funds freed when they had delivered their promise.

[digitalminer407]

Could a true GHs exchange be developed? Cex.io owns the whole sell side. (lol). A true exchange would have miners able to actually sell into the exchange. Obviously they would have to be held to a contract and would only have funds freed when they had delivered their promise.

That is a very interesting concept! 

[Scriptiee]

While it mazy be an interesting concept, it is not practical. Why would someone mine bitcoins for someone else instead of just keeping the bitcoins for themselves? A better idea is bitcoin futures.

Because they would get more bang for the GHS renting rather than using themselves?

I know cex is quite expensive but if you think about it, it is the cheapest GHS that you can buy that will mine for you straight away and it gives you a chance to actively trade it to try to make more porfit

Just my observation, still green to all this stuff.

[lerelerele]

Wonder why nobody is using the cex.io calculator

Assumptions
100 GHs
1800 diff start (tomorrow)
2% diff increase/day

                 Diff                   Profit Profit cumulated
Jan-14    1800    895    0.84    0.81    0.81
Feb-14    3150    1566    0.48    0.45    1.27
Mar-14    5513    2740    0.28    0.25    1.51
Apr-14    9647    4796    0.16    0.13    1.64
May-14    16882    8392    0.09    0.06    1.70
Jun-14    29544    14686    0.05    0.02    1.72
Jul-14    51701    25701    0.03    0.00    1.72
Aug-14    90477    44977    0.02    -0.01    1.71
Sep-14    158335    78710    0.01    -0.02    1.69
Oct-14    277086    137742    0.01    -0.02    1.67
Nov-14    484901    241049    0.00    -0.03    1.65
Dec-14    848577    421836    0.00    -0.03    1.62

Tells you 1 GHs is max 0.017 btc and the price of 1 Ghs will be 0 btc in Jul 2014.

Assumption

In Jul 2014 the cost of maintenance will be the same: I think youre wrong
You cant sell from now to jul 2014: I think you are wrong too

[xandriel]

Wonder why nobody is using the cex.io calculator

Assumptions
100 GHs
1800 diff start (tomorrow)
2% diff increase/day

                 Diff                   Profit Profit cumulated
Jan-14    1800    895    0.84    0.81    0.81
Feb-14    3150    1566    0.48    0.45    1.27
Mar-14    5513    2740    0.28    0.25    1.51
Apr-14    9647    4796    0.16    0.13    1.64
May-14    16882    8392    0.09    0.06    1.70
Jun-14    29544    14686    0.05    0.02    1.72
Jul-14    51701    25701    0.03    0.00    1.72
Aug-14    90477    44977    0.02    -0.01    1.71
Sep-14    158335    78710    0.01    -0.02    1.69
Oct-14    277086    137742    0.01    -0.02    1.67
Nov-14    484901    241049    0.00    -0.03    1.65
Dec-14    848577    421836    0.00    -0.03    1.62

Tells you 1 GHs is max 0.017 btc and the price of 1 Ghs will be 0 btc in Jul 2014.

Going by this calculation even the next gen miners will be useless by July 2014, and they only start to sell from April. Not much hope for anyone thinking of buying an X1 from Black Arrow for example.
If you try 1TH/s you get a similar profit forecast.
If this is true, then almost everyone will stop mining in the next 6 months. Let's just see if that happens.

As for Cex.io and not being able to make a profit....I am making one, although very slowly.

[xandriel]

While it mazy be an interesting concept, it is not practical. Why would someone mine bitcoins for someone else instead of just keeping the bitcoins for themselves? A better idea is bitcoin futures.

Because they would get more bang for the GHS renting rather than using themselves?

That doesn't make sense. Suppose my miner can mine 1 BTC per month. I would rent it out for 1.1 BTC per month. Why rent it for less? On the other hand, why would someone pay 1.1 BTC per month to mine 1 BTC per month?

You wouldn't rent it for that price. You would rent it for less than 1 BTC, say 0.5 BTC.
Now let's say you spent 3 BTC buying the hardware, and running costs for 6 months. You break even on your purchase. You have the hardware, and someone else is making money for you...in exchange you split half the profit with them.

[digitalminer407]

I sold everything from my CEX account because after about a month I figured out that is really wasn't worth it and I was actually losing money.  I did find another service with bitcominers.com for cloud mining and they had some really reasonable rates.  I am giving them a try......I should be mining with them in a couple days. 

In the mean time.........I hopefully will have my own mining machine running here soon.  Cloud mining was the best alternative to get me started without having equipment.  Bitcominers seemed to be one of the only companies that seems reputable and legit that I have found to do cloud hashing.

Anyways......hope that helps!  Happy Mining!!$$

Ken

[FalconFly]

I sold everything from my CEX account because after about a month I figured out that is really wasn't worth it and I was actually losing money.  I did find another service with bitcominers.com for cloud mining and they had some really reasonable rates.  I am giving them a try......I should be mining with them in a couple days.  

In the mean time.........I hopefully will have my own mining machine running here soon.  Cloud mining was the best alternative to get me started without having equipment.  Bitcominers seemed to be one of the only companies that seems reputable and legit that I have found to do cloud hashing.

Anyways......hope that helps!  Happy Mining!!$$

Ken

Hm, I've read several postings in this Forum that state they are a scam... So beware.

[krampus]

In exchange for what? What is the renter doing for you? Why would you make a deal where you mine 1 BTC per month and give half of it to someone else?

And that right there is why renting GHs is an intractable problem. Nobody* would pay more per month than each GH can mine, and nobody who owned the hardware would rent it out for less than they could mine with it themselves. Fundamentally, there isn't a way to make the transaction equitable for both parties.



* Clearly, people are still buying GHs at cex.io, despite this fundamental and insurmountable flaw. One can only conclude (assuming all parties are driven by profit alone) that one party to the transaction is being unilaterally screwed by the other. You can decide for yourselves which is which.

[byronbb]

In exchange for what? What is the renter doing for you? Why would you make a deal where you mine 1 BTC per month and give half of it to someone else?

And that right there is why renting GHs is an intractable problem. Nobody* would pay more per month than each GH can mine, and nobody who owned the hardware would rent it out for less than they could mine with it themselves. Fundamentally, there isn't a way to make the transaction equitable for both parties.



* Clearly, people are still buying GHs at cex.io, despite this fundamental and insurmountable flaw. One can only conclude that (assuming all parties are driven by profit alone) that one party to the transaction is being unilaterally screwed by the other. You can decide for yourselves which is which.

Obviously cex.io is ridiculous. However you make assumptions in the second part as if  the parties involved can see the future. A miner selling GH to a real market would be hedging his outlay against a horrible rise in difficulty. He sacrifices potential profit to guarantee a return he can live with. There are other ways to hedge  with futures and options, but the market is illiquid and reliant on 3rd parties.
If a buyer lived somewhere where electricity rates were ludacris, buying GH would be his only option to mine. Maybe he lacks the technical skills to operate a miner. Or he cannot acquire and build a miner in a time-frame quick enough to satisfy his predictions of coming difficulty increases. There are lots of incentives for buyers and sellers of GH to arrive at a fair price for both.

[krampus]

However you make assumptions in the second part as if  the parties involved can see the future. A miner selling GH to a real market would be hedging his outlay against a horrible rise in difficulty. He sacrifices potential profit to guarantee a return he can live with. There are other ways to hedge  with futures and options, but the market is illiquid and reliant on 3rd parties.

Agreed, though this particular factor is largely predictable (at least in the short term).

If a buyer lived somewhere where electricity rates were ludacris, buying GH would be his only option to mine.

That might in fact be the case, but (again, assuming profit were the sole motivation) this doesn't change the equitability of the transaction. It's still lopsided, no matter how much electricity costs for the renter.

Maybe he lacks the technical skills to operate a miner.

Again, this doesn't change the equitability. A loss is still a loss.

Or he cannot acquire and build a miner in a time-frame quick enough to satisfy his predictions of coming difficulty increases.

Nope. Still doesn't change the equitability. If I give you 1BTC and get back 0.5BTC, it's still a loss.

There are lots of incentives for buyers and sellers of GH to arrive at a fair price for both.

That's just it -- there aren't. Fundamentally, if everything being exchanged is fungible, the only equitable solution is a 1:1 exchange, at which point it becomes pointless. If I pay you five oranges in exchange for three identical oranges, I've been screwed. If I pay you six oranges in exchange for 10 identical oranges, you've been screwed.

If the fee and the goods are of the same thing, any transaction between them is essentially pointless.

[byronbb]

However you make assumptions in the second part as if  the parties involved can see the future. A miner selling GH to a real market would be hedging his outlay against a horrible rise in difficulty. He sacrifices potential profit to guarantee a return he can live with. There are other ways to hedge  with futures and options, but the market is illiquid and reliant on 3rd parties.

Agreed, though this particular factor is largely predictable (at least in the short term).

If a buyer lived somewhere where electricity rates were ludacris, buying GH would be his only option to mine.

That might in fact be the case, but (again, assuming profit were the sole motivation) this doesn't change the equitability of the transaction. It's still lopsided, no matter how much electricity costs for the renter.

Maybe he lacks the technical skills to operate a miner.

Again, this doesn't change the equitability. A loss is still a loss.

Or he cannot acquire and build a miner in a time-frame quick enough to satisfy his predictions of coming difficulty increases.

Nope. Still doesn't change the equitability. If I give you 1BTC and get back 0.5BTC, it's still a loss.

There are lots of incentives for buyers and sellers of GH to arrive at a fair price for both.

That's just it -- there aren't. Fundamentally, if everything being exchanged is fungible, the only equitable solution is a 1:1 exchange, at which point it becomes pointless. If I pay you five oranges in exchange for three identical oranges, I've been screwed. If I pay you six oranges in exchange for 10 identical oranges, you've been screwed.

If the fee and the goods are of the same thing, any transaction between them is essentially pointless.

You should sell me some GHs for 0.001btc and then laugh at how dumb I am then.

[krampus]

You should sell me some GHs for 0.001btc and then laugh at how dumb I am then.

At that price and the current difficulty, I'd be on the losing end of that deal. So what's my incentive for doing so?

[byronbb]

You should sell me some GHs for 0.001btc and then laugh at how dumb I am then.

At that price and the current difficulty, I'd be on the losing end of that deal. So what's my incentive for doing so?

What price point would be break-even for you?

[krampus]

You should sell me some GHs for 0.001btc and then laugh at how dumb I am then.

At that price and the current difficulty, I'd be on the losing end of that deal. So what's my incentive for doing so?

What price point would be break-even for you?

The exact same price that would be break even for you, plus or minus the price of electricity for me.

[Thom]

Diff goes up, cex ghs price goes down. Not as much as I'd like, but their prices beat the ass off of preorders that take forever / never arrive.

Plus the Ghs at cex being liquid makes them instantly tradeable on the highs and lows, which is harder to do with actual mining hardware. Ain't no other circumstance where you can spend a mining reward on Ghs as soon as you get it, and that time saved = lesser losses.

[xandriel]

It seems that haters will always hate. Even when you tell them you ARE making a profit from cex.io.

Lets try looking at the REAL cost per GH/s. I live in the UK, so it will be in £, but you can convert to $ easily if you want. Here is a quick comparison with hardware that I can actually order for shipment today.
If I buy an Antminer USB, it will cost me approx. £60 for 2GH/s....that is £30 per GH/s.
EDIT: Antminer S1 is about £4800 for 180 GH/s...so about £27 per GH/s.
If I buy 1 GH/s from cex.io it will cost 0.045 BTC, BTC is currently £560....so that is £25 per GH/s.
This is not a conclusive list, there are better deals. This was just the first single miner I found that I could actually get.

So per GH/s cex is cheaper and I get to mine instantly. Hardware will devalue with difficulty increases too.

Once I am done mining with cex, I can easily sell the hardware I leased...hopefully for the same or more than I paid for it. The current price has been roughly stable for the past few weeks.

If I had been lucky enough to get 1st batch on a KNC miner or had the buying power to bulk buy like cex have, I would without doubt get a much better price per GH/s, but I could not.
I could buy in to the current tech, but would certainly not get a return on that investment. Even the next gen is looking poor when predicted.

Could cex make more money buy keeping the hashing power for themselves...certainly. However it would be a lot more difficult to get financial backing for such a business plan. All hardware manufacturers would also earn more by keeping their hardware. If your argument is purely based in the max profit assumptions, then you should not bother buying hardware either.

There is another factor, some of us enjoy being part of bitcoin and mining. We are not here for max profit, just some profit will suffice

[krampus]

Diff goes up, cex ghs price goes down. Not as much as I'd like, but their prices beat the ass off of preorders that take forever / never arrive.

Plus the Ghs at cex being liquid makes them instantly tradeable on the highs and lows, which is harder to do with actual mining hardware. Ain't no other circumstance where you can spend a mining reward on Ghs as soon as you get it, and that time saved = lesser losses.

I agree with everything you wrote. You don't lose as much money with cex.io as you do with mining hardware. My question is why do you choose to lose money?

This.

[FalconFly]

It seems that haters will always hate. Even when you tell them you ARE making a profit from cex.io.

Lets try looking at the REAL cost per GH/s. I live in the UK, so it will be in £, but you can convert to $ easily if you want. Here is a quick comparison with hardware that I can actually order for shipment today.
If I buy an Antminer USB, it will cost me approx. £60 for 2GH/s....that is £30 per GH/s.
EDIT: Antminer S1 is about £4800 for 180 GH/s...so about £27 per GH/s.
If I buy 1 GH/s from cex.io it will cost 0.045 BTC, BTC is currently £560....so that is £25 per GH/s.
This is not a conclusive list, there are better deals. This was just the first single miner I found that I could actually get.

So per GH/s cex is cheaper and I get to mine instantly. Hardware will devalue with difficulty increases too.

Once I am done mining with cex, I can easily sell the hardware I leased...hopefully for the same or more than I paid for it. The current price has been roughly stable for the past few weeks.

If I had been lucky enough to get 1st batch on a KNC miner or had the buying power to bulk buy like cex have, I would without doubt get a much better price per GH/s, but I could not.
I could buy in to the current tech, but would certainly not get a return on that investment. Even the next gen is looking poor when predicted.

Could cex make more money buy keeping the hashing power for themselves...certainly. However it would be a lot more difficult to get financial backing for such a business plan. All hardware manufacturers would also earn more by keeping their hardware. If your argument is purely based in the max profit assumptions, then you should not bother buying hardware either.

There is another factor, some of us enjoy being part of bitcoin and mining. We are not here for max profit, just some profit will suffice

To keep things short :
When you do tell people you ARE making money at cex.io, all you're saying is either :
a) you are lying
or
b) you completely suck at math...
or (unlikely)
c) you are a luck-gifted pro trader, countering your losses by bot-/daytrading, which everyone knows is the only slim chance to actually profit mining w/ rented GHs @ cex.io

If you buy an Antminer USB, you know you won't make profit unless BTC conversion price skyrockets at some time...
If you buy an Antminer S1 180GHs for £4800 today, you'd be seriously retarded. That's not what the device is sold for today.

So by your "logic", cex.io GHs is cheaper than these deals (lol, that's easy) and won't make you a 70-80% loss, but only a ~40-50% loss.
Wow, great deal !
Could cex.io make more money by keeping the hashing power for themselves?.... certainly not. Fools that rent those in large amounts (severely math challenged or paid shills that just claim so) far more than double cex.io profits.
It's okay not got do it for max. profits, but you're advertising a pretty solid, guaranteed loss. That's what the fools are needed for, they got to pay so that others can maximize profit (i.e. cex.io)...

IMHO, the best compromise I could imagine concerning a statement about mining profitability is :
Don't do it, unless you're only in it for the learning experience and accept solid losses doing so (unless you're willing to bet on 10000$+ preorders on highend gear to be profitable in the future).
If you want to have a chance to break even, buy BTC directly instead and hope for conversion price increases in the future!