Cloud Mining/Renting Gh/s to mine Altcoins

[JohnnyPierce]

I have an account at Cex.io and I currently have 2 Gh/s rented on their site, there is however a big dissapointement with Cex, is that they don't allow you to actually use your rented Gh/s to mine Altcoins of your own choosing.

I also tried the DigitalOcean method, but the hashrate is just to small, not to mention that it is virtually impossible to create multiple accounts and they have a limit on how many machines one can have.

I'm looking for the best of both worlds, a service that allows me to rent Gh/s, but that allows me to configure exactly how and where I want to use my Gh/s, is there anything like this?

[krampus]

Which altcoins were you hoping to hash? Generally speaking, most altcoins aren't compatible with the hardware that cex.io [allegedly] has.

[JohnnyPierce]

Which altcoins were you hoping to hash? Generally speaking, most altcoins aren't compatible with the hardware that cex.io [allegedly] has.

Litecoin, Doge, Fedoracoin (TIPS), Quark, etc.

Also, in principle any machine can mine any coin, even if it does so at unoptimized speeds, correct?

[krampus]

Which altcoins were you hoping to hash? Generally speaking, most altcoins aren't compatible with the hardware that cex.io [allegedly] has.

Litecoin, Doge, Fedoracoin (TIPS), Quark, etc.

Also, in principle any machine can mine any coin, even if it does so at unoptimized speeds, correct?

Nope.

Mining hardware meant for Bitcoin (and a few other coins -- more on that later) uses highly-optimized SHA-256 ASICs. That hardware isn't capable of doing anything else. In the olden days, one could mine Bitcoin with an ordinary CPU, and then with a GPU. Those days are gone. To be productive at mining Bitcoin these days, you must use ASIC-based hardware, or you'll be burning more electricity (a LOT more) than you'll be earning.

There are a few other altcoins that can be mined with SHA-256 hardware -- Peercoin and Namecoin come to mind -- but the vast majority of altcoins use Scrypt to compute the block hashes. Scrypt mining can still be done with GPU, and in fact isn't well suited to ASIC design.

So there's a sharp division between SHA-256 and Scrypt-based coins in terms of the hardware they need. The hardware at cex.io (if it really exists -- I'm kind of starting to doubt that they really have hardware) is SHA-256 based. It can't be used to mine anything except SHA-256-based coins.

[JohnnyPierce]

Which altcoins were you hoping to hash? Generally speaking, most altcoins aren't compatible with the hardware that cex.io [allegedly] has.

Litecoin, Doge, Fedoracoin (TIPS), Quark, etc.

Also, in principle any machine can mine any coin, even if it does so at unoptimized speeds, correct?

Nope.

Mining hardware meant for Bitcoin (and a few other coins -- more on that later) uses highly-optimized SHA-256 ASICs. That hardware isn't capable of doing anything else. In the olden days, one could mine Bitcoin with an ordinary CPU, and then with a GPU. Those days are gone. To be productive at mining Bitcoin these days, you must use ASIC-based hardware, or you'll be burning more electricity (a LOT more) than you'll be earning.

There are a few other altcoins that can be mined with SHA-256 hardware -- Peercoin and Namecoin come to mind -- but the vast majority of altcoins use Scrypt to compute the block hashes. Scrypt mining can still be done with GPU, and in fact isn't well suited to ASIC design.

So there's a sharp division between SHA-256 and Scrypt-based coins in terms of the hardware they need. The hardware at cex.io (if it really exists -- I'm kind of starting to doubt that they really have hardware) is SHA-256 based. It can't be used to mine anything except SHA-256-based coins.

So the question comes to mind, is there any service or method (faster than digitalocean) that allows me to rent hash power to mine scrypt based coins?

[krampus]

So the question comes to mind, is there any service or method (faster than digitalocean) that allows me to rent hash power to mine scrypt based coins?

Generally speaking, renting hash power is a scam. I'm sure a bunch of people will appear out of thin air to tell me I'm totally wrong and that they're making money at cex.io, but those people are largely retarded incapable of basic math or otherwise understanding the difference between "mining" and "day trading".

If you owned some mining hardware (of any variety) that was capable of returning X coins per day, would you rent it out for less than X coins per day? Why? You'd be losing money.

On the other side of the fence, if someone wanted to rent some hash power, and that hardware was capable of returning X coins per day, would they pay more than X coins per day? Why? They'd be losing money.

IMHO, there aren't any scenarios where the arrangement of renting hash power is mutually beneficial to both parties. Either the buyer or the seller will get screwed. Given that one party holds the hardware and the other party does not, guess which one is more likely to get screwed!

[JohnnyPierce]

So the question comes to mind, is there any service or method (faster than digitalocean) that allows me to rent hash power to mine scrypt based coins?

Generally speaking, renting hash power is a scam. I'm sure a bunch of people will appear out of thin air to tell me I'm totally wrong and that they're making money at cex.io, but those people are largely retarded incapable of basic math or otherwise understanding the difference between "mining" and "day trading".

If you owned some mining hardware (of any variety) that was capable of returning X coins per day, would you rent it out for less than X coins per day? Why? You'd be losing money.

On the other side of the fence, if someone wanted to rent some hash power, and that hardware was capable of returning X coins per day, would they pay more than X coins per day? Why? They'd be losing money.

IMHO, there aren't any scenarios where the arrangement of renting hash power is mutually beneficial to both parties. Either the buyer or the seller will get screwed.

I understand your argument, but when it comes to CEX.io for example, we never lose any money, considering that we can, at any point withdraw our initial investnment, so I don't see how the user who rents their services would be in effect losing any money.

Perhaps I'm missing something, but isn't my assumption correct? (Obviously I'm looking from the perspective of the user, not the company, but I would assume that they have some method of reinvesting our Bitcoins to make them profit while we're hashing using their hardware)

[krampus]

I understand your argument, but when it comes to CEX.io for example, we never lose any money, considering that we can, at any point withdraw our initial investnment, so I don't see how the user who rents their services would be in effect losing any money.

Perhaps I'm missing something, but isn't my assumption correct?

You're confusing day trading with mining. Yes, you can sell back your GHs at cex.io. You might even make a profit doing so. But this is a textbook example of the "greater fool" scenario. The price of a GHs at cex.io goes up and down on a day to day basis, but the overall trend is down. And there's an especially sharp drop a few days before every Bitcoin difficulty increase. Thus, the longer you hold those GHs at cex.io, the less they'll be worth. So you buy overpriced GHs at cex.io that will never, ever return 100% of your initial investment in mining returns, and you're hoping that you'll be able to find a greater fool to buy those GHs later on, when they are clearly worth less because of the increased Bitcoin difficulty.

Some individuals might profit from this scheme (buying low and selling high) but since the overall trend in GHs prices is steadily downward, most people will in fact lose. If you could execute short sales at cex.io, you could win from that arrangement. But I hold it as self-evident that day trading shares that have a steady downward trend with no way to execute short sales is the greatest foolishness of all.

[JohnnyPierce]

I get it, reformulating my initial question then, given that CEX services appear to be a scam, is there any method similar to the digitalocean method where you can get a higher hashrate for a lower buck?

[krampus]

I get it, reformulating my initial question then, given that CEX services appear to be a scam, is there any method similar to the digitalocean method where you can get a higher hashrate for a lower buck?

I'll leave that question for others. I have no experience scrypt mining.

[JohnnyPierce]

Thanks for your insight nevertheless!

[dottom]

So the question comes to mind, is there any service or method (faster than digitalocean) that allows me to rent hash power to mine scrypt based coins?

IMHO, there aren't any scenarios where the arrangement of renting hash power is mutually beneficial to both parties. Either the buyer or the seller will get screwed. Given that one party holds the hardware and the other party does not, guess which one is more likely to get screwed!

Yes, there are scenarios where it is win-win.

1. A buyer wants to invest in coins but has a hard time going through the hoops at Coinbase and other purchasing outlets.  Many have had buy orders automatically blocked by Coinbase's automatic algorithm, or may not want to wait 4 days for bank account transfer, or may not want to pay high fees for instant credit card transfer, or may not want to go through the verification process that takes 1-2 days (depending on how long it takes your credit card online to show you pending charges).  Mining contracts are a different vehicle of translating fiat to coins, though sometimes at a premium.

2. Seller wants cash delivered by different means that BTC withdrawal.  Or seller wants to be paid NOW up front for time-value-of-mining.  I had to pay for service on my car so I could drive to work.  I had maxed out credit cards but was able to quickly sell 30 days of mining for an agreed upon price.  Like a futures market, buyer takes on some risk based on difficulty and BTC value calculation (assume operational risks don't exist to simplify the analysis); and seller accepts guaranteed money NOW.

3. Buyer has coins with a pool or exchange and needs to increase the balance in order to reach the minimum for cash out.  This is usually not a large sum of money but is a common scenario.

4. For large corporate players that buy ASIC gear and rent it out, assuming they have hardware on hand and aren't playing the pre-order scam game, they not only get money up front that they can then re-purpose it.  This was the reason why progressive shares worked before ASIC wait times put all of them out-of-business, or forced the into high risk buy-pre-order-and-pray strategies.

I will leave out the fraud and tax evasion reasons but you do see buyers with these motivations paying "over market value" for mining contracts.

[JohnnyPierce]

Thanks for your insight as well, as you can gather I'm not very in depth when it comes to cryptocurrencies, or even markets in general, however I do have some money to invest in crypto currencies and I would like to know which methods do I have at my disposal that can maximize my profit at a lower risk.

[byt411]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

[JohnnyPierce]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

So how come that in some mining pools, you see people mining some scrypt altcoins like doge or fedora at insane hashrates and all I can achieve with my ATI R9 290X is some 800 Kh/s? How come some miners are mining these coins at multiple Mh/s? (When I purchased my R9 290X I was told it was one of the best cards in the market, granted that I bought it originally for Battlefield 4, but still, I tought it would make a difference in mining altcoins)

Also, my question isn't strictly directed at altcoins, basically I want to make some money with the cryptocurrency market and I would like to know what would be the best place to start, what would be the most profitable investment of my money?

[byt411]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

So how come that in some mining pools, you see people mining some scrypt altcoins like doge or fedora at insane hashrates and all I can achieve with my ATI R9 290X is some 800 Kh/s? How come some miners are mining these coins at multiple Mh/s? (When I purchased my R9 290X I was told it was one of the best cards in the market, granted that I bought it originally for Battlefield 4, but still, I tought it would make a difference in mining altcoins)

Also, my question isn't strictly directed at altcoins, basically I want to make some money with the cryptocurrency market and I would like to know what would be the best place to start, what would be the most profitable investment of my money?

People build huge rigs. GPUs that fill an entire room.

Find it in the "show off mining rig" thread on the forum.

[JohnnyPierce]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

So how come that in some mining pools, you see people mining some scrypt altcoins like doge or fedora at insane hashrates and all I can achieve with my ATI R9 290X is some 800 Kh/s? How come some miners are mining these coins at multiple Mh/s? (When I purchased my R9 290X I was told it was one of the best cards in the market, granted that I bought it originally for Battlefield 4, but still, I tought it would make a difference in mining altcoins)

Also, my question isn't strictly directed at altcoins, basically I want to make some money with the cryptocurrency market and I would like to know what would be the best place to start, what would be the most profitable investment of my money?

People build huge rigs. GPUs that fill an entire room.

Find it in the "show off mining rig" thread on the forum.

I see...

What are my alternatives then, I have some money to invest, but not that much money to purchase multiple rigs and multiple high end cards, what are my options?

[byt411]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

So how come that in some mining pools, you see people mining some scrypt altcoins like doge or fedora at insane hashrates and all I can achieve with my ATI R9 290X is some 800 Kh/s? How come some miners are mining these coins at multiple Mh/s? (When I purchased my R9 290X I was told it was one of the best cards in the market, granted that I bought it originally for Battlefield 4, but still, I tought it would make a difference in mining altcoins)

Also, my question isn't strictly directed at altcoins, basically I want to make some money with the cryptocurrency market and I would like to know what would be the best place to start, what would be the most profitable investment of my money?

People build huge rigs. GPUs that fill an entire room.

Find it in the "show off mining rig" thread on the forum.

I see...

What are my alternatives then, I have some money to invest, but not that much money to purchase multiple rigs and multiple high end cards, what are my options?

Well, I suppose you could buy some bitcoins and wait for it to go up in value.

[JohnnyPierce]

Just so you know, there aren't even any Scrypt ASICS on the market, so all you can find are people renting out rigs for Scrypt in the services section.

So how come that in some mining pools, you see people mining some scrypt altcoins like doge or fedora at insane hashrates and all I can achieve with my ATI R9 290X is some 800 Kh/s? How come some miners are mining these coins at multiple Mh/s? (When I purchased my R9 290X I was told it was one of the best cards in the market, granted that I bought it originally for Battlefield 4, but still, I tought it would make a difference in mining altcoins)

Also, my question isn't strictly directed at altcoins, basically I want to make some money with the cryptocurrency market and I would like to know what would be the best place to start, what would be the most profitable investment of my money?

People build huge rigs. GPUs that fill an entire room.

Find it in the "show off mining rig" thread on the forum.

I see...

What are my alternatives then, I have some money to invest, but not that much money to purchase multiple rigs and multiple high end cards, what are my options?

Well, I suppose you could buy some bitcoins and wait for it to go up in value.

They're hovering at $800 for nearly 2 months, hence why I initially asked about the Altcoins, it seems to me that some new coins have insanely fast capitalizations, I've heard that from the beginning of this year until now, early investors of the Doge coin and Quark coin have made a great deal of money.

I would like to know how can I be on "top" of the altcoin market to notice a rising coin in its early stages.

[Wipeout2097]

OP, one of the issues is that DigitalOcean is crap for the price. You see it advertised on guides because one gets $10 on the referral link. Instead, signup for Amazon EC2 and take a look at spot instance prices around the world.

Forget about scrypt coins on CPUs, though. It's worthless. Memorycoin, protoshares, primecoin and others are ok.

Then, a GPU rig isn't uber-expensive. $200 for MB, CPU and RAM. The PCI-e risers cost $20 each. Then there are 2 interesting cards, R9-270 and R9-280x. Finally, the PSU(s) you need depend on the cards you choose. A good quality 1050W $200 PSU can handle for example 3 R9-270 and 2 280x after the cards being undervolted, but 2 PSUs start to become appealing in this situation and you can go 5 or 6 280x

With well chosen components and a bit of luck, it pays itself in 2 to 3 months, not speaking of some cash you recover when you sell them on the used market