I have personally thought about this too much. So here are my final thoughts. I am writing this because I am trying to help a few people that will actually take this to heart.
I was almost victim of a scam when I first heard of the magical method of mining digital gold. I found several sites/companies willing to sell me this ability. But the question that loomed was why would a company sell something that is worth more than the price they are asking? After doing some research I was able to figure out they were a scam. They were claiming to use hardware that didn't exist yet and after talking with the manufacturer Butterfly Labs they told me that they had no relationship with the company and that no one had received their cards yet. The scam I am referring to is bitofglory.com you may or may not have run across them in your own searches. In addition to that I was able to track down their bank information and the address linked to their account was a luxury apartment in downtown Dallas, hardly the location where 509 TH(according to their website) would be located. They were conveniently located across the street from an actual data-center but then again they had no business relationship with them either this was just a way for them to try and show credibility, if you actually checked facts there was nothing there.
They were essentially selling futures of bitcoin at a discount at the time(early January, now their prices are not as good). Futures of any asset NEVER sell for a discount always a premium. If you have ever invested in stock options you understand this. So the only way to be certain a mining operation is real is if there is a premium to the yield based off of today's prices.
I went to the Bitcoin Conference in Miami and talked with many manufacturers and REAL suppliers of mining power. Not a single company could provide immediate cloud hash for less than $30-$40 per GH. The only thing you could get at the conference was old mining equipment for $10-$20 per GH. This is what the REAL companies are offering. They have millions of dollars backing them with huge factories trying to churn these cards out as fast as they can and that was the best they could do at the time. How could what seems to be a 1 person company provide more and more mining power whenever they see fit or "sell out" and at prices that are pennies on the dollar compared to everyone else? Simple they can't, no debating this.
Now to Pbmining:
First let me just say that any business that says it is not looking for new customers is the stupidest statement ever made in the history of mankind(they have said this repeatedly). Prove this ridiculous statement PBmining by shutting down your website and only allowing existing members to buy more GH. Oh, you are not going to do that, yeah that's what I thought.
There are 3 scenarios here on why they would not want to prove themselves be revealing the source of the coins:
1. They are accepting BTC payments and pay returns similar to what a Miner would pay out from the BTC paid to them not from generated coins. Customers say "yippy its proven and it works!" and re-invest all BTC earned along with much more to make even more BTC! This is what a Ponzi scheme is. Faking returns of an investment with the original funds invested with the certainty that investors will not only re-invest all dividends paid but add even more over time. This scenario is simply proven to be false if PBmining can show that all payments are coming from newly generated coins from block rewards. Go through this 30 something page thread and count all the refusals to requests for this information. Ask yourself why wouldn't they just show that information, its so easy to show if its there. They won't because they can't.
2. They have found someone willing to wholesale them large amounts of hashing at ridiculously low rates and are just reselling that to customers at a profit. They are not willing to show any information about it because they do not want you to figure out the source and undercut them. I want to believe this scenario because as a business owner it is your right to find something at a cheaper price and sell it for more and I truly hope they are not stealing from you guys as well. This is just too unlikely based on the points made above. No one is discounting a product when there is through the roof demand for that product.
3. They are using the coins taken in and investing them in some BTC trading bot or system that yields a higher average return than mining and paying their seed investors out at a mining return and keeping the difference. It helps that they only payout once a week even though coins are generated every ten minutes. If they were a part of the Eligius pool with 29TH they should be getting coins at least once an hour and could payout customers once an hour. By waiting to pay until Sunday they further their return because they can take advantage of the interest compounding for all the trades they can do in the meantime. This is also a scenario why they would not want to share where the coins are coming from so you cannot undercut them and go straight to the source earning a higher return.
I have asked people in previous posts to share their wallet addresses so we can see where the PBmining payouts are coming from and backtrack the coins source. I know they have taken efforts using bit mixing methods to conceal everything, but there is a way to figure it out. Those that have the ability to show what they are doing have the responsibility to the collective to do so IMO.
Hopefully you can see the logic in the above and your response will not be: "I got paid it works" or "There is risk in investing, don't invest if you are scared of losing". Your response as a customer should be that you demand to understand the inner-workings of a company you are investing in.
If after reading this you still believe in what PBmining is telling you then I have swampland in Florida to sell you and I accept BTC
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