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Author Topic: cex.io experiences  (Read 1715 times)
thekitchen
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January 28, 2014, 11:17:16 AM
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I've seen a lot of discussion about this exchange and cloud mining service, and wanted to share my analysis, plus hear about the experiences of others.

By my calculations, if you want to purchase GHS for the purpose of mining, you can't do anything but lose money at a price of more than ~ .012/BTC , and by May 2015 your revenue essentially drops to zero. This calculation is based on the current exchange rate of BTC/USD, and an average difficulty rise of 25% - probably a bit generous.

At the current exchange rate of .038/BTC, you lose 65% of your investment by the time your GHS becomes worthless due to difficulty going up - and again, I think an average of 25% is low, given the new chips that are coming on the market.

My strategy is to put in orders for what I think is a fair price for GHS, and in the meantime simply park my BTC there. Has anyone had success using this site for actual trading? Logically the worth of GHS can only go down over time, unless we see a large spike in the BTC/USD exchange rate.

Curious to hear others' thoughts on this. Are those who are using the site banking on a spike in the value of BTC vs fiat currencies, or are you using it for trading?

I've had excellent returns in the past purchasing long-term contracts for hashing power, but I made sure beforehand that they would be profitable over the course of the contract.


Full disclosure - if you're interested in trying it out, I figured I might as well post my referral link here; stupid not to really.

http://cex.io/informer/0112358/8844a9c05f54d1be4a5a21f044c904a9/
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January 28, 2014, 12:00:23 PM
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I am interested finding out more.

Frost000
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January 28, 2014, 04:20:19 PM
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I've been on cex.io since early December and though I have enjoyed the experience, it hasn't been as profitable as I'd like it to have been.

Before anyone asks: Yes, I've made a decent amount of BTC trading on the site, considering my initial investment. If I were to cash out all of my GH/s and BTC from the site, I'd be in profit by a fun margin.

Would I suggest the site? Only if you know how to trade efficiently or if you have some BTC to "gamble" and want to learn.
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January 28, 2014, 04:26:01 PM
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Well My experience was good. Their service is flawless but the only way to  earn from what they offer you is to buy low sell high. Otherwise it would take more than a year to break even with mining. Plus their new TOS seems suspicious. I got away from them with about  20% of my investment as profit just after they announced the new TOS.

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January 28, 2014, 04:38:59 PM
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Well My experience was good. Their service is flawless but the only way to  earn from what they offer you is to buy low sell high. Otherwise it would take more than a year to break even with mining. Plus their new TOS seems suspicious. I got away from them with about  20% of my investment as profit just after they announced the new TOS.

Yeah, I'm curious about how their new TOS implementation might affect the market. I've been considering pulling out before it hits.
thekitchen
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January 29, 2014, 10:35:19 AM
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Open question: what are your concerns regarding the upcoming change in the TOS?

I'm working on some calculations involving the historical change in difficulty, taking into account anticipated increases in hashrate due to new equipment coming onto the market... I know Hashfast will be delivering probably a considerable number of orders in March, for example. They're not even taking orders right now... Then looking at past impacts of difficulty increases on the GHS/BTC exchange rate, I figure I can put together some useful models... if I manage to put these models together, I'll share them on this post.
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January 29, 2014, 10:52:58 AM
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Please inform me how you loose BTC if you follow this stratigy.

I've been mining now for 2 weeks in scrypt based coins, exchanged them for BTC and put that BTC to work for me in CEX. I took it out as the BTC market was falling a few days ago and cashed out to fiat for a while, which I'm currently in however once the BTC market starts to level out a bit more, I figured I'd dump back in there as it's not like I "bought BTC" to pay for the GHS over there. I see it as a (although not a very good amount) savings account that gets a trickle intrest rate on your holdings and as long as the BTC / GHS ratio doesn't implode like it did last week when BTC took a dive, then you should be OK or am I totally missing some point that will cost me in the future?

And by knowing how to trade effectively, how exactly are you talking? I mean it seems that the CEX.io trading platform is all bots just posting .1 - 2 ghs lots up there and trading that back and fourth. Isn't there some sort of transaction fee for trading on there too, I don't get how that is at all profitable as a large dump / run is pretty rare compared to the charts I see on their website.

Any information would be helpful.

Thanks.
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January 29, 2014, 01:31:18 PM
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It's definitely not just bots trading, but there are indeed bots. Cex.io does not charge any transaction fees for every trade you make. They receive a nice commission every time a block is found.

In terms of profitability, if the price of GH/s on Cex.io stays the same over time while you unload your profits there to purchase GH/s, technically you're not losing any "money" and you'll be making a tiny profit from the mining (it really depends on how much GH/s we're talking about).

But if during your time the price goes from 0.04/GHs to 0.03/GHs, it'll eat away at your profits if you want to withdraw. Just like you said. It *is* a gamble and if you're comfortable with it, keep at it!

By trading effectively, it can be easier (not easy) to expect imminent dips/crashes and large increases. That's where the trading profit lies.
Nova!
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January 29, 2014, 03:25:51 PM
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It's definitely not just bots trading, but there are indeed bots. Cex.io does not charge any transaction fees for every trade you make. They receive a nice commission every time a block is found.

In terms of profitability, if the price of GH/s on Cex.io stays the same over time while you unload your profits there to purchase GH/s, technically you're not losing any "money" and you'll be making a tiny profit from the mining (it really depends on how much GH/s we're talking about).

But if during your time the price goes from 0.04/GHs to 0.03/GHs, it'll eat away at your profits if you want to withdraw. Just like you said. It *is* a gamble and if you're comfortable with it, keep at it!

By trading effectively, it can be easier (not easy) to expect imminent dips/crashes and large increases. That's where the trading profit lies.

Yep there are bots.  In fact my own personal bot made a mistake during an arbitrage calculation and single handedly caused a runaway drop in prices.
I had less than 5GHS when it started and ended up with 10GHS by the time everything was finished, but it drove the damned price down something fierce in the process.

That tells me that MOST of the volume is bot driven since the bots were reacting to my bot doing something completely unexpected (offering to take a massive loss on one side).  Most of the bots seemed to be trading on this signal and continued pushing the price down probably because y'all are runnin the same software, which caused a panic.

Here is an explanation of what was going on my end.

After careful analysis I noticed that that there was a periodic profit opportunity in GHS->BTC->NMC->GHS that would flip around to GHS->NMC->BTC->GHS about every 20 minutes or so.
I whipped up a bot in node.js to watch those lines and trade with them as the opportunities opened up.

Unfortunately, the BTC/NMC rate was flipped in my bot's "it's time to trade!" calculations.  Thus it sold my GHS to BTC at a massive loss and offered to buy GHS with NMC at a significant premium above the going rate.

All the other bots started reacting and drove the price down.  I killed my bot after about an hour or so and went about flipping everything back into GHS.  The push down in price allowed me to double my GHS, but my bot would have left me bankrupt had I let it keep going.  I just got fortunate because the blood shed continued well past my bot's own actions and my bot had left me with BTC & NMC purely by accident of placing crazy trades.

So guys, here's a tip.  If you have a bot doing your trading on CEX.io, look at your thresholds and have it consider the whole order book along with depth, not just the "last" ticker (ticker is screwy anyways).  Otherwise when I get around to rewriting this thing it's going to wipe you out.

For those of you not botting it.  The price of GHS is only going to drop.  It's value as source of revenue drops at a rate of whatever the difficulty level increase for BTC is.  However it's price seems to be dropping even faster than difficulty increases, which means if you buy you're losing BTC faster than you're earning it back.

You can still make money, but you need to look at a timeframe of no more than 24hrs at a time.  Look at the 24 hr range and buy/sell as close to the peaks and valleys as you can manage.  There are no fees so you can take advantage of even miniscule changes in price without eating it in trading fees.

Buy low, sell high and make sure you buy more GHS with about 50% of the BTC that is generated by your GHS as it comes in.  Flush the rest to fiat on a regular basis and buy back into BTC when the BTC/USD rate drops, sell it when it breaks out of it's 24hr peak.  When you do your daily sale of GHS to BTC flush 50% of your profits (always sell at either a profit or near the 24hr high), flush 50% to fiat and hold the rest until the price comes back down near, at or below the 24hr low.

There is a lot of money to be made, you just have to be smart about it.  Your simple algo bots will bankrupt you if they are selling based on the ticker instead of the market depth.

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5thStreetResearch
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January 29, 2014, 06:43:10 PM
 #10

Well My experience was good. Their service is flawless but the only way to  earn from what they offer you is to buy low sell high. Otherwise it would take more than a year to break even with mining. Plus their new TOS seems suspicious. I got away from them with about  20% of my investment as profit just after they announced the new TOS.

no matter what you are trading isnt the only way to make money "buy low and sell high"?

boumalo
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January 29, 2014, 07:18:09 PM
 #11

I've seen a lot of discussion about this exchange and cloud mining service, and wanted to share my analysis, plus hear about the experiences of others.

By my calculations, if you want to purchase GHS for the purpose of mining, you can't do anything but lose money at a price of more than ~ .012/BTC , and by May 2015 your revenue essentially drops to zero. This calculation is based on the current exchange rate of BTC/USD, and an average difficulty rise of 25% - probably a bit generous.

At the current exchange rate of .038/BTC, you lose 65% of your investment by the time your GHS becomes worthless due to difficulty going up - and again, I think an average of 25% is low, given the new chips that are coming on the market.

My strategy is to put in orders for what I think is a fair price for GHS, and in the meantime simply park my BTC there. Has anyone had success using this site for actual trading? Logically the worth of GHS can only go down over time, unless we see a large spike in the BTC/USD exchange rate.

Curious to hear others' thoughts on this. Are those who are using the site banking on a spike in the value of BTC vs fiat currencies, or are you using it for trading?

I've had excellent returns in the past purchasing long-term contracts for hashing power, but I made sure beforehand that they would be profitable over the course of the contract.


Full disclosure - if you're interested in trying it out, I figured I might as well post my referral link here; stupid not to really.

http://cex.io/informer/0112358/8844a9c05f54d1be4a5a21f044c904a9/


When the price will reach your buying limits, it will probably be very expensive to buy GHs for that price

Cex.io asks to deposit BTC and sell GHs in BTC so the price of the BTC in fiat doesn't matter that much since the return is in BTC, it matters only psychologically and because of the maintenance costs that are in fiat

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