Not that I'm the smartest person when it comes bitcoin related stuff but can someone please explain how can cloud mining be very profitable to anyone when normal mining isn't profitable either ? Like does this virtualisation decrease the mining difficult or they actually have mining farms spread over 100 acres of area which needs to be rented so they can make profits ?
"Normal" mining is profitable, Joel.
It's also capital intensive.
Getting cloud mining customers to pay upfront for future unspecified repayments (the size of which are controlled by the miner) by selling them hashrate is an attractive way to finance a farm. They deduct for 'maintenance' and/or electricity and, last time I looked, these charges can swallow about half of the gross amount of BTC that the purchased hash power should have mined.
Once the cloudmining contract expires (or the miner decides to expire it because he says his costs aren't being covered) then the hash power reverts to the miner. And then there's the scams....