Mining with CEX.IO or why do I not believe skeptics

[kickbit]

I was interested in the question why do people buy GHS on CEX.IO for such a high price.

And the answer was quite clear:

• They can be sold at any time, at least in theory.
• While owned, GHS make profit in the form of Bitcoins.

But the network difficulty is constantly growing, which means GHS make less profit, while the electricity and maintenance cost percentage should increase as well.

Everyone I know keeps telling me that a long term investment in GHS is plain silly, you can only get some profit on short trades.

At first I agreed with all of these arguments, as I’ve never had any experience with an Exchange, but one day, something possessed me to buy 6.5 BTC worth of GHS.

And here is what came out of it:
At first I decided to try to play on short rate fluctuations: I bought a small portion of GHS and put them for sale for a price a little bit higher than I bought, and etc.

A couple times I even managed to make some profit.
Here is a screenshot of my trading history:





At first, there were no signs of trouble.
But as you can see, I made all the transactions on the 25-26th of November, at the time when the prices were at the all-time high.
A couple of hours after my purchase the price for 1 gigahash began to crumble.





My first thought was: “Oh s%^$t! I will never use another exchange in my life!"

The price for 1 Bitcoin at that time was about $900 per BTC and it swiftly moved to $1000.

You can imagine, I spent $6000 on something unclear and I watched my investments depreciate rapidly.

If you look at the Bitcoin charts you can tell that the timing for my investment couldn’t be worse.

But eventually I was able to calm myself and just stared at the charts.

I also kept myself busy making a calculator, which allows users to predict the exact maximum profitability of a GHS, calculate profitability per day, per month, taking into account network difficulty increase and other various factors.

I put it on the net: http://mining-profit.com/

So, using my super awesome calculator I have counted that my 79 GHS’ profitability is 0.0553 BTC per day. And if I wait for two weeks, I will get about 0.7742 BTC in income. This means that if after two weeks the price for 1 GHS will be equal to 0.072 BTC, then I can sell my GHS and break even. If I decide to hold on to my GHS for 1 month - I can sell them for 0.65 and break even. Hence, all I need to do is sell GHS for a price higher than the ROI price and get profit while I’m mining.

Considering the fact that I was afraid to lose somewhere around 1.5 BTC, which is roughly 23% of my investment, the prospect of me breaking even gave me a warm satisfying feeling.

I decided to keep trading and mining to make some profit out of this situation!

I decided to wait until the prices rise again, but they were fluctuating up and down, so eventually  I was tired of waiting and sold them all, when I understood that am no longer at loss, but even made small profit.

My trading resulted into a profit of 0.26 BTC, which was equal to $250 at the exchange rate at that time on bitstamp, or nearly 5% of the investment.

Here's a screenshot of my recent trades:





6.73 BTC it is not a huge amount, as many would expect, but it is a decent reward for a beginner like me, I also gained great experience.

And considering that initially I could barely hope for a minor loss of my investment, at the end of trading - I made profit, which is very nice.

So coming out of my personal experience I can say that even people without any experience or perfect understanding of how the bitcoin mining/trading works I’ve managed to make profit from the CEX.IO exchange.

PS. If you enjoyed my story, and you want to try out mining and trading yourself - be sure to sign up with CEX.IO with my referral link: https://cex.io/r/0/kickbit/0/. It'd be greatly appreciated.

 

[DrG]

Prior to the dot com bubble anybody could have thrown darts at a WSJ paper and hit a winning stock.  BTCe Trollbox should indicate there is minimal skill and mostly luck in trading cryptos.

Consider yourself lucky.  For every winner in CEX there are 2 loosers.

[kickbit]

You know, I don't think I'm lucky.
The main idea of my article was - I'm NOT lucky 

However, I didn't lost any BTC and even made some profit with cex.

[DrG]

You know, I don't think I'm lucky.
The main idea of my article was - I'm NOT lucky 

However, I didn't lost any BTC and even made some profit with cex.

Well if it is not luck, then it is skill.  It has to be one or the other.  Inherently the only people who can make money from CEX are those who bought when it was dirt cheap.  With the next dif bump it should be well under 0.04 in price to be market priced compared to straight hardware.

Again I can fault people for having fun.  If you're having fun like thinking it's a trading game good for you.  If your sole goal is to make money then buying BTC or making a BTC business makes more sense.  Even mining doesn't makes sense without cheap power and cheap miners.

[Dexter770221]

You posted your referral link 3 times. It's obvious that you just want people to mine for you, just becuse you wrote some short story of your adventure...

[philipma1957]

To the op you have completely missed the best  points of cex.io


  You need to own at least .00000001 ghs to have an account.  So go to cex.io open a small account for .1gh  or about .007 btc or about 5-6 dollars usd.

  guess what this allows you to do  it allows you to use your in house miners on their mining site.


https://www.ghash.io/   this is a private site and you can not be on the site unless you own some hash


at cex.io

 https://www.cex.io/   this is a direct link no referral …

disclosure  the referral link  for me is in my signature.And right now I have 3 referrals hashing I get about 2.2gh free hash from the ones that joined with my referral

trading is flat out gambling  and while you made money at it there is a shitload of risk.   BUT mining on the private site is great.

 why ?  here is why:
1) they are huge what does that do?  it lowers 'bad' luck.  or variance .  
2) low fees
3)  you earn BTC NMC IXC + DVC
4)  you can convert your NMC to BTC for 0 that is correct 0 fees.

So let us say you buy .1gh from cex.io  the cost is .0068999btc     about 6 or 7 usd.  now you are in the 'club'  you fire up your in home gear.

let us say 2 am cubes or 60gh  the 60 gh earns you .033 btc a day and about .044 nmc a day.   along with some IXC and some DVC.   so every day buy about .5gh using your earning.

 in 6 days you have about 3gh added to your hashing. convert to btc and cash it out. or let it grow.

 after 6 days you no longer have 60 + .1= 60.1gh of hash you have 60 + 3.1 or 63.1 gh of hash.  if you let it build up your risk is higher  but you returns would be higher.


edit if you cash out every 6 days or so you earn better then any other mining pool . and lower risk of busting out if cex.io folds.
 remember any mining pool can fold and steal your btc they are holding for you.

  these ideas are true and real no bs.   if anyone has a large amount of hash power  in house they should consider what I am typing.  while I do completely

agree with the op the cex.io is 'good'  

my reasons are safer and more certain then his are.  

BTC mining has risk due to pricing that no pool or club and fully make it safe for you  on any day you can wake up and see btc drop 90%

but cex.io  allows you to use https://www.ghash.io/  with your in home mining gear and that is really good.

[kickbit]

You posted your referral link 3 times. It's obvious that you just want people to mine for you, just becuse you wrote some short story of your adventure...

Okay, I removed them. It doesn't matter. This article is not about referral links.

[Macno]

I found your story intersting, as I also think about investing there. If I hadn`t already made an account, I would have klicked your referral link, just because I think it is ok to reward information.

[Colin Miner]

Okay, I removed them. It doesn't matter. This article is not about referral links.

Don't be bullied by those that are jealous of your post. Keep your referral links, maybe say they are referral links, but you do deserve to keep them for your interesting post.

Thank you for taking the time to write it, I enjoyed reading it.


(I am already doing what philipma1957 suggests with ghash.io, but also trade for fun on cex.io, otherwise I would have used your referral link)

[TechByPC]

Agreed. People claiming that it is easier to make a loss are jealous of your ability to make a profit while they can't. I appreciate your story as well as it mirrors some of my early experiences with it, although with much less capital. Don't let people bully you about referral links either. That mentality is more like: "I wish people would click mine instead of yours."

I'm running a parallel experiment with 4 block erupters all measured at the same speed running on 4 different pools. One of them is cex.io/ghash.io, and even with the recent small reduction in the price of GHS, it is still in 2nd place. Before someone jumps in and tries to point out that luck is more likely the reason it is in 2nd place instead of 4th, believe me I am aware of that possibility. I am not drawing any conclusions until this has been running for at least a month except to point out that cex.io is not a money sink and there are people making profit there all the time. Even ones who aren't making on the backs of people who make emotional trades rather than calculated ones.

[klondike_bar]

the 100TH mine (now around 520TH) offers 1GH per share at about 60% the price of CEX.io, can be sold at any time (smaller orderbook though), and equipment is constantly being added.

you are investing in a mine operation rather than a single GH. CEX.io sucks for mining, only profits anyone can/will make is from buy low/sell high, not the actual mining income

[dopey]

Great breakdown thanks for this. I wonder if they will allow the mining of additional alt currencies too in the near future?

[zauker]

you can convert your NMC to BTC for 0 that is correct 0 fees.

@philipma1957 I'm a cex.io customer. How can I do that, please?

[iPaulito]

So basically if you buy lets say 10 GH from their website you are renting their mining equipment and you are getting same amount of BTC like you would if you bought 10 GH asic and mine for yourself minus fees?? So if you manage to sell your GHS at the same price you bought you have rented those hashes for free. In real life you would not be able to sell your $10K USD asic right away for $10K USD

[gigacoiner]

Which mine is this?  The one offering 1GH per share at 60% of CEX.io?

the 100TH mine (now around 520TH) offers 1GH per share at about 60% the price of CEX.io, can be sold at any time (smaller orderbook though), and equipment is constantly being added.

[Ultimist]

So basically if you buy lets say 10 GH from their website you are renting their mining equipment and you are getting same amount of BTC like you would if you bought 10 GH asic and mine for yourself minus fees?? So if you manage to sell your GHS at the same price you bought you have rented those hashes for free. In real life you would not be able to sell your $10K USD asic right away for $10K USD

But in real life $10K would buy you a heck of a lot more than 10 GHS.

[Morblias]

Which mine is this?  The one offering 1GH per share at 60% of CEX.io?

the 100TH mine (now around 520TH) offers 1GH per share at about 60% the price of CEX.io, can be sold at any time (smaller orderbook though), and equipment is constantly being added.

The bitfury mine. It's over 500TH right now.

Buy shares here for 0.0395 BTC per GH: https://picostocks.com/stocks/view/19

This is the forum post of the mine: https://bitcointalk.org/index.php?topic=140366.0

[iPaulito]

So basically if you buy lets say 10 GH from their website you are renting their mining equipment and you are getting same amount of BTC like you would if you bought 10 GH asic and mine for yourself minus fees?? So if you manage to sell your GHS at the same price you bought you have rented those hashes for free. In real life you would not be able to sell your $10K USD asic right away for $10K USD

But in real life $10K would buy you a heck of a lot more than 10 GHS.

Now I see the problem, Currently you can buy 600 GHs from butterfly labs for $4680 and you have to pay electricity cost. Same 600 GHs will cost around $8500 through cex.io - not a great deal, but I can imagine when next batch of asic miners will be shipped and GHS/BTC will fall that for few months this could be profitable

[Macno]

The thread history does not sound all that reassuring about picostocks:

https://bitcointalk.org/index.php?topic=133147.0;all

I`m no techie and I`m not greedy, I`d just like to mine a little bit, just for the fun of it and maybe a small ROI, but this seems almost impossible right now.
Cex.io is at least well done, I understand everything and they do not seem to have lost investor money so far?

[fattypig]

So basically if you buy lets say 10 GH from their website you are renting their mining equipment and you are getting same amount of BTC like you would if you bought 10 GH asic and mine for yourself minus fees?? So if you manage to sell your GHS at the same price you bought you have rented those hashes for free. In real life you would not be able to sell your $10K USD asic right away for $10K USD

But in real life $10K would buy you a heck of a lot more than 10 GHS.

Now I see the problem, Currently you can buy 600 GHs from butterfly labs for $4680 and you have to pay electricity cost. Same 600 GHs will cost around $8500 through cex.io - not a great deal, but I can imagine when next batch of asic miners will be shipped and GHS/BTC will fall that for few months this could be profitable

You still have to pay electricity buying hash from cex.io. It is already priced in