I cant understand cex.io investors

[miners78]

I don't think anyone goes on CEX and buys a load of GHs just like that.

Most of the users probably buy a small amount, and then use the BTC made from it in a few days to buy more and more. If you buy and sell the GHs at the right times like you would for BTC itself, then it could be very profitable.

[odolvlobo]

Or think about it this way: It is a medium to high risk investment that pays 23% interest monthly. (at 0.07/GH and today's difficulty). Slightly better if you reinvest (compound) that interest by buying additional GHS on a regular basis with your interest. Obviously the "interest" will continue declining as difficulty increases which is why over a long period of time the average returns are going to be worse because the cost/GHS will continue to decrease in line with the "interest".
Don't think of it as buying mining power but rather from the investment/returns perspective and it makes a lot more sense.
I've seen posts where people say the GHS price should be 0.03. If someone was offering you an investment that made better than 10%/week and was backed, at least somewhat, by a company rather than some guy with a hammer that would break kneecaps of debtors if they didn't pay that would be pretty popular, hence the current cost.

This is how I think of it.  Instead of coins sitting in a wallet, coins at CEX are generating a slight income.  And if you want to trade periodically, you can make some profits that way too.

You are not getting 23% monthly. Your return drops significantly every 12 (or less) days.

You write as if you expect to get all of your initial investment back, but you won't. The price of 1 GH/s drops faster(on average) than the amount you receive as income. The price has dropped 25% in the last month, so even your exaggerated 23% was not enough to break even.

There is simply no way to make a profit at the current price. Since you lose money every time you buy cex.io, you are compounding your losses when you reinvest.

The price should be around 0.03 BTC because that is the total amount of income you will receive from 1 GH/s. Why pay 0.07 when you are only going to get back 0.03?

You can potentially make profits by trading, but trading is going to lose money on average because the price is dropping. For every trader that makes money there will at least one trader that loses money.

I urge the two of you to make a serious effort to determine the total income you will receive from 1 GH/s and then justify paying the current price for that income.

[DrG]

Or think about it this way: It is a medium to high risk investment that pays 23% interest monthly. (at 0.07/GH and today's difficulty). Slightly better if you reinvest (compound) that interest by buying additional GHS on a regular basis with your interest. Obviously the "interest" will continue declining as difficulty increases which is why over a long period of time the average returns are going to be worse because the cost/GHS will continue to decrease in line with the "interest".
Don't think of it as buying mining power but rather from the investment/returns perspective and it makes a lot more sense.
I've seen posts where people say the GHS price should be 0.03. If someone was offering you an investment that made better than 10%/week and was backed, at least somewhat, by a company rather than some guy with a hammer that would break kneecaps of debtors if they didn't pay that would be pretty popular, hence the current cost.

This is how I think of it.  Instead of coins sitting in a wallet, coins at CEX are generating a slight income.  And if you want to trade periodically, you can make some profits that way too.

You are not getting 23% monthly. Your return drops significantly every 12 (or less) days.

You write as if you expect to get all of your initial investment back, but you don't. The price of 1 GH/s drops faster(on average) than the amount you receive as income. The price has dropped 25% in the last month, so even your exaggerated 23% is not enough to break even.

There is simply no way to make a profit at the current price. Since you lose money every time you buy cex.io, you are compounding your losses when you reinvest.

The price should be around 0.03 BTC because that is the total amount of income you will receive from 1 GH/s. Why pay 0.07 when you are only going to get back 0.03?

You can potentially make profits by trading, but trading is going to lose money on average because the price is dropping. For every trader that makes money there will at least one trader that loses money.

I urge the two of you to make a serious effort to determine the total income you will receive from 1 GH/s and then justify paying the current price for that income.

Sshhhh.  Quiet.  You'll let the cat out of the bag.

[svetbg]

I don't think anyone goes on CEX and buys a load of GHs just like that.

Most of the users probably buy a small amount, and then use the BTC made from it in a few days to buy more and more. If you buy and sell the GHs at the right times like you would for BTC itself, then it could be very profitable.

+1

You can make profit using CEX even if you only speculate

[NorbyTheGeek]

You are not getting 23% monthly. Your return drops significantly every 12 (or less) days.

You write as if you expect to get all of your initial investment back, but you won't. The price of 1 GH/s drops faster(on average) than the amount you receive as income. The price has dropped 25% in the last month, so even your exaggerated 23% was not enough to break even.

There is simply no way to make a profit at the current price. Since you lose money every time you buy cex.io, you are compounding your losses when you reinvest.

The price should be around 0.03 BTC because that is the total amount of income you will receive from 1 GH/s. Why pay 0.07 when you are only going to get back 0.03?

You can potentially make profits by trading, but trading is going to lose money on average because the price is dropping. For every trader that makes money there will at least one trader that loses money.

I urge the two of you to make a serious effort to determine the total income you will receive from 1 GH/s and then justify paying the current price for that income.

I do get what you're saying, but I don't think it works out exactly that way.  The GH price has been on a downtrend lately, but the last couple of days has been heading upward slowly, and at the moment is higher than what I've paid for most of my GH.  If I were to sell my holdings now, I'd be in profit. 

I appreciate if you think of CEX as mining, it is way overpriced and there's never going to be a positive return on investment.  And that's how most mining is nowadays.  But if you just treat CEX as another commodity (buy low, sell high) you can still make a profit.  The extra mining income is just gravy.

At current prices, I'm up 70% in the last month or so in my CEX holdings.

[fs2k155]

Maybe you nay-sayers are right and I haven't turned a profit at cex.io and it is all a big scam, but my wallet tells me otherwise. I don't have a single bitcent there at the moment, but my total withdrawals exceed my total inputs, and by better margins than I described previously, so I'm happy. I'm really sorry for you if you lost money by panic selling during a drop or buying on hype during a high point. That doesn't mean that everyone makes poor decisions or that the service or price is in any way flawed. I profited through the last few difficulty adjustments from you and others who did the same.

[aznatama]

You guys are mostly looking at it wrong.

Look at it this way on cex.io...
GH = shares of stock
mining output = dividends

Buy low, make dividends, sell high.

BTC goes down, BTC/GH goes up
Difficulty jumps, BTC/GH goes down

You buy/sell the GH like stock shares, so it's not really $60~80/gh or whatever the cost is.  You can sell the GH at any time.

[fs2k155]

Who has implied "I have made money trading, therefore most people will make money trading"? I looked back through the thread and couldn't see anyone. From what I can tell there are a few categories of people here:

1. People that believe money can be made or lost by careful or not so careful trading / botting.
2. People that believe easy money can be made by mining; they don't read or participate on these forums, but they do pump money into the system.
3. People that have a vested interest in seeing the market on cex.io fluctuate wildly in order to profit from it and are thus trying to spread FUD/hype about it.
4. People that wish they had enough to invest, or made some poor choices leading to big losses and just want others to share in their misery.

I would say most people fall into category 1 but the most vocal people fall into 3.

If cex.io wanted this to be a mining operation they wouldn't have implemented a no-fee commodity trading platform. Without an external auditor of their platform I'm sure they are making plenty on the rises and falls themselves. If there's anything negative to be said about them, that's it right there. Everything else is just crying (4).

You are right that the value of a GHS will approach 0 over time, but it will never reach absolute 0 unless the value of a bitcoin and all other SHA256 coin is also 0. It is just as easy to make money in a declining market by playing the short term rises and falls. The value of a share of GHS on Cex is much different than the value of the GHS warming my basement in both positive and negative ways. It is smart to understand those differences before investing, but isn't required. The market says 0.074 right now, so that's what it is. Find someone who cares nothing for profit and is willing to sell their cex.io GHS to you at 0.03 on the belief that's all they should be worth and I'm sure we'll find people willing to buy all they are selling at that price.

[odolvlobo]

You provide your personal experience of success as a counter to my "nay-saying" without also noting that your success is unusual. You have to at least agree with me that the typical/average cex.io investor will lose money. Otherwise, you are promoting unrealistic expectations.

The only reason that 1 GH/s sells for 0.07 BTC is ignorance. My goal is to eradicate this ignorance, and these claims of making a profit aren't helping.

[fs2k155]

Ok, but why do you want the price to be lower. I don't consider myself to be some kind of trading genius by any stretch. Nor did I babysit it for hours on end for small trades. It was an interesting hobby for a little while, but for the moment I am out.

It would probably be in my interest to buy and hold right now, which means I would love the price you suggest. There are more people interested in making profit on the volatility so the price is higher. I am, instead, diversifying into several group buys which are a much better long-term dean even than .03, although they unfortunately don't start right away.

I think in the end our goals are the same. We are both saying that the price is too high for mining. The difference is that I'm saying to use it for what it is: A commodity trading platform with no transaction fees where the commodity or it's real value is mostly irrelevant except that there is a dividend. You are saying to stop buying until the price reaches a level that mining is a viable investment. I don't think cex.io is a mining platform, and I don't think it ever will be. The price will always be inflated at times because of the hype/panic cycle. My suggestion is to use your knowledge of those cycles to profit, because with the amount of traffic the site gets, the day will never come when it is priced right for mining.

[FrictionlessCoin]

You guys are mostly looking at it wrong.

Look at it this way on cex.io...
GH = shares of stock
mining output = dividends

Buy low, make dividends, sell high.

BTC goes down, BTC/GH goes up
Difficulty jumps, BTC/GH goes down

You buy/sell the GH like stock shares, so it's not really $60~80/gh or whatever the cost is.  You can sell the GH at any time.

Yes, it's a kind of strange play,  it's a short term "short" against BTC,  unfortunately it is a long term bet against difficulty going up.

Very tough trade.  But in terms of USD profitability one may come out ahead. 

[ljudotina]

Most of users there are small players buying few GHS. IF you play it good (watching for diff change and all that) you can earn alot of BTC/GHS. It sure isnt for long term mining like bu and forget.

[cczarek123]

They're only selling for more in fiat.  I guarantee they're worth less BTC now.  Would have been better to buy BTC

[newguy05]

cex.io investors is same as those that buy expensive miners in the market now... they don't understand difficulty...

false, it's not that they dont understand difficulty, it's the greater fool theory,

cex.io started as a legit hashrate exchange that were priced competitively(cheaper) vs the miners you could physically buy at the time, without the setup/upkeep headaches.  

Now it's a ponzi scheme, the guys owning the shares thinking they can always sell the shares at little loss to the next fools and meanwhile they can mine some btc.  The fools buying those shares at 3-4x above market think the same - that there will always be some greater fool who will buy their shares down the road at llittle loss, the stable flat price further enforces this false belief.

Hence the whole thing is a house of cards propped up by all the market participants all thinking they wont be the ones holding the bag after the price gap up from $200 to $1000. However there will be a tipping point once the difficulty reaches so high the average account total GHs becomes too little, then the dump will begin -  someone will be left holding the bag that's for sure.

I got out once the cex.io goes above 2x the hardware price.

[philipma1957]

You provide your personal experience of success as a counter to my "nay-saying" without also noting that your success is unusual. You have to at least agree with me that the typical/average cex.io investor will lose money. Otherwise, you are promoting unrealistic expectations.

The only reason that 1 GH/s sells for 0.07 BTC is ignorance. My goal is to eradicate this ignorance, and these claims of making a profit aren't helping.

duh buy .1 gh  and point 500gh at the miner from your in home mining.   then grow the .1gh .   you must own some gh from them to do this.


  all my in home mining  points to their pool.  

 I am up to 10gh of their hash.  I have 2gh in referral.  the service of exchanging your nmc to btc for free is worth a lot of money.


 anyone with a big rig that is not using cex.io  please do click on my referral below and do your self a favor make more money mining with them then any other pool.

I can show you what a knc will save using them as their miner.. and if you have a knc and do not point  your mining to them you are wasting money.

   a 550gh knc miner earns .3btc a day   or about 4gh from them.   point a knc at them for 5 days.  change your nmc to btc every day. and then buy  the 4gh with the btc and maybe .5gh with the nmc…  every day for 5 days.  you will have grown your .1 gh buy in  to 22 gh .. then sell it. then pull the btc out.  rinse and repeat day after day for 5 days then pull the btc out.

 more money more money.  if you understand what I wrote your would reverse your statement as it is the ignorant one.    due to 'the only reason' part of your statement
    
 my reason is a  reason and makes your statement incorrect.

 To be fair to you  anyone that buys 20 gh from them as their one and only btc investment is not that bright.

But I want you to realize my method is really good and will almost certainly make you money from cex.io

[NorbyTheGeek]

duh buy .1 gh  and point 500gh at the miner from your in home mining.   then grow the .1gh .   you must own some gh from them to do this.

  all my in home mining  points to their pool.  

 I am up to 10gh of their hash.  I have 2gh in referral.  the service of exchanging your nmc to btc for free is worth a lot of money.

This is what I've been doing, but on a much smaller scale.  I have 21 GH of hardware at home pointed at their pool.  I also invested about .75 BTC in their GH.  In less than a month that has grown to 25 GH and at current CEX prices I've more than doubled my BTC.

If they ever get IxCoin and DevCoin trading going that'll be another bonus.

[philipma1957]

duh buy .1 gh  and point 500gh at the miner from your in home mining.   then grow the .1gh .   you must own some gh from them to do this.

  all my in home mining  points to their pool.  

 I am up to 10gh of their hash.  I have 2gh in referral.  the service of exchanging your nmc to btc for free is worth a lot of money.

This is what I've been doing, but on a much smaller scale.  I have 21 GH of hardware at home pointed at their pool.  I also invested about .75 BTC in their GH.  In less than a month that has grown to 25 GH and at current CEX prices I've more than doubled my BTC.

If they ever get IxCoin and DevCoin trading going that'll be another bonus.

yep  by far the best of all btc mining pools.   It would be nice if someone read this post and joined with my referral link.. A nice big rig I would get some free hash power.  they would save a lot in fees. win win

And if you just want to join without helping me at 0 cost to you…  use

https://www.cex.io/


although I prefer   you click my signature link.

[philipma1957]

I read these anti cex.io  threads and can't help but to think they are started by owners of other pools.



http://blockchain.info/pools   you look at the chart cex.io is a  huge pool  it has the lowest fees.  plus  it allows free exchange of the nmc coins you earn.

A big rig like a knc miner earns .5 nmc a day.   If you are running 2 knc miners in house cex.io  will make you thousands in extra money in a year.


The key is when you build the extra gh from your miners with your nmc  + btc earned  do that 2 times a day. 

 Then  convert the gh to btc and pull it out  1 time every 5 days or so.   this will make a lot of money for you.  more then other pools.

 and what did it cost  as little as buying .1gh of hash  or about .0073btc to start.

[DrG]

I read these anti cex.io  threads and can't help but to think they are started by owners of other pools.

Or perhaps maybe we're protecting out thousands of BTC by not concentrating all the mining power into a single pool 

Chasing pennies while dropping dollars...

[TechByPC]

Maybe the right response is a competing commodity market / pool rather than FUD about this "guarantee" of losses.

I'm not sure if we are in imminent danger of a 51% attack, however if there is a message we need to get out it isn't this drumbeat that it's a terrible service with no chance or an extremely low chance of making profit, since there is evidence that's false. The message should be that everyone with private hashpower pointed at the pool should be ready to pull it out quickly if it ever appears that we are in imminent danger of 51%. Selling GHS won't change the pool's power, but all this private power pointed at it is probably making some difference.

Of course the conspiracy theorist in me wonders how likely it is that the only hashpower they control is what is actually on GHash.IO. I tend to think they are not mining 100% of their capacity there in order to not spook the community. It wouldn't be in their best interest to destroy the currency, but then again a short term play where the value crashes temporarily may be in some people's interest.