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Author Topic: BITCOIN CLOUD MINING IS A SCAM (noob word!)  (Read 6535 times)
GODLIKE
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June 27, 2014, 02:58:57 PM
 #1

So, I knew about Bitcoin since 2011, but I didn't catch the train on time.
I'm back now, bought some, but recently I decided to try to mine and see if it's worth it.
Now, damn me and when I use my brain after my hands.

So, here you have the noob words: BITCOIN CLOUD MINING IS A SCAM.
It was worth it in the past.
It's no more worth it now.

I will be GLAD if you can prove me wrong, because I've actually spent a little money on it (I'm no rich at all) and I'll be really happyto get something out of it, or at least get back to the starting point.

So, why I say that mining is a scam?
Because of course cost is not worth the mining.
EVER.

The facts.
I bought 100 GHs from PBMining.
I want to be clear here that PBMining is NOT the problem: they have the best pay off for what I know at least.
The problem is the increasing difficulty of mining that can't be paid back, no matter what, now.
Maybe if you have free electricity and you can wait 10 years, then yes, you will make it back.
I also want to be clear that I trust in cryptocurrencies as the future of payment, and in Bitcoin especially, I'm not against it at all.
Back to the GHs offer on the market.

100 GHs on PBMining cost me 0.36 BTC.
I am checking real time how much these 100 GHs are giving me back every hour.
I only have data from yesterday because that's when I bought those MHs.
Anyway, it seems that I get something like 0.000150 - 0.000170 BTC each hour.
Now, 0.000150 an hour, brings to 0.0036 a day.
And 0.0036 a day brings to 0.0432 every 12 days.
With 100 GHs.
But that's NOW.

In a couple of days or so, the difficulty will rise again.
From what I can see here, difficulty grows by around 15% every 12 days.
I round these 12 days to 2 weeks for convenience in the following scheme (but keep in mind things are happening at 1/7 of the speed faster).
In the following spreadsheet you have the first 12 days of income and what happens in the following 47 chunks (approximately 2 years)
It begins with 0.0432, and then the following chunks of 12 days, each one sliced down to 85% value than the chunk before. That's the missing 15% for the increased difficulty.



Now, you can easily see that you will never get back what you put into mining, unless the extraction difficulty, for unknown reasons, changes and reverts back to lower values... but even then, if this doesn't happen SOON, you won't ever see your investment back.

But I am no math genius, I am no money expert, and no professor, so please, I ask you PLEASE, IF YOU CAN, PROVE ME WRONG.
It's not REALLY a drama for me, as I've "only" lost around 150 Euro into this, I'm just pissed, but for many, many people this will result in a REAL drama.

This behaviour is DAMAGING Bitcoin.
These bubbles WILL explode, SOON.

Last, but not least (or not?): this thread goes against my interest, if I am right, because PBMining (and then all the others) will explode soon, and I'll not even get back what I put in mining if I didn't open it.
Stupid me if I'm right and I didn't check all this before, and stupid me if I'm wrong, anyway it's a lose/lose situation, it seems.
Anyway, if you think this thread saved your ass or some of your savings, tipping me would be a really good action: 1ANzn7yFf1Fip2t4usLiMKxyWJEcwzMiWz
Thanks in advance for reading and to who will explain me that I'm wrong and why.



Edit: just seen there's a MINING section, sorry for posting in the wrong place...
If you think it fits better in there, just move it, but maybe it's better to give this thread best visibility (unless I'm completely wrong on my assumptions).

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June 27, 2014, 03:09:59 PM
 #2

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.

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June 27, 2014, 03:17:38 PM
 #3

with 100gh/s y can wipe your arse. fact is mining can be as hobby or as work which brings profit.

one s1 would bring you 200gh/s for 0.4btc

this can turn in to profit if you know how to do it.
not only mining with gear but later ressel.  or mine different coin like ppc and hold in to that.

you want get rich quick? invest $$$$ and just harvest profit. once gear is obsolete sell it and exchange for new.

There are people here with tens of th/s of power and they don't complaint or branding mining a scam.



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June 27, 2014, 03:19:28 PM
 #4

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.
The real problem here is he claims the entirety of bitcoin mining is a scam. If anything, it's cloud mining that may be able to take that title.

Cloud mining is overpriced and lots of other things, but it's not the fault of the protocol when you decide to use them.

People buy their own miners and mine that way, instead of cloud mining. As such, mining YOURSELF is not a scam, but using CLOUD MINING very well can be.

The OP still needs to learn the differences, although I will admit I'm still learning too.














 

 

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GODLIKE
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June 27, 2014, 03:22:33 PM
 #5

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.

What do you mean by that?
Can you spend LESS than 0.36 BTC for 100 GHs/s?
Or to better put it: can you spend less than 0.36 BTC to earn more than 0.000150 BTC a hour?

Watch, before finding PBMining I bought some GHs on CEX.IO, that offers it at TWICE the price.
Not only that: their mining also sucks off money for electricity consumption.
In short: I immediately sold that stuff and got back my BTC after finding that PBMining is half their prices (users determined...).


Can you give me some directives to where to find better price for GHs/s or you just talking?

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fryarminer
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June 27, 2014, 03:23:34 PM
 #6

I wouldn't call it a scam. We have dug ourselves into the trenches of our greed.

There's a teamwork exercise where all participants have to hold a long light rod, and each person has to have a finger on it, but the rod is not allowed to go higher - they have to keep it in the same position. The exercise is extremely difficult because with each person trying to have their finger touch the rod, the rod shoots up and up.

This is what is happening with mining. Because each person wants a little bit, (and some people want more), the difficulty just goes up and up and up. And it's not going to stop.

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June 27, 2014, 03:26:05 PM
 #7

use math ... https://bitcoinwisdom.com/bitcoin/difficulty



100GH/s ... it's useless now (since february 2014).

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June 27, 2014, 03:26:23 PM
 #8

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.

What do you mean by that?
Can you spend LESS than 0.36 BTC for 100 GHs/s?
Or to better put it: can you spend less than 0.36 BTC to earn more than 0.000150 BTC a hour?

Watch, before finding PBMining I bought some GHs on CEX.IO, that offers it at TWICE the price.
Not only that: their mining also sucks off money for electricity consumption.
In short: I immediately sold that stuff and got back my BTC after finding that PBMining is half their prices (users determined...).


Can you give me some directives to where to find better price for GHs/s or you just talking?

eBay. Buying GH for bitcoin will never pay off. But buying GH for dollars will, when the price of BTC goes up.

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June 27, 2014, 03:28:34 PM
 #9

It's obvious actually, you're the noob here.
Anything that you invest in and don't ROI is a scam. Oh yeah, I'm loving this logic.


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June 27, 2014, 03:32:19 PM
 #10

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.

What do you mean by that?
Can you spend LESS than 0.36 BTC for 100 GHs/s?
Or to better put it: can you spend less than 0.36 BTC to earn more than 0.000150 BTC a hour?

Watch, before finding PBMining I bought some GHs on CEX.IO, that offers it at TWICE the price.
Not only that: their mining also sucks off money for electricity consumption.
In short: I immediately sold that stuff and got back my BTC after finding that PBMining is half their prices (users determined...).


Can you give me some directives to where to find better price for GHs/s or you just talking?

First, if you buy hash power with BTC, make sure you rebuy the BTC so you can track profits in fiat.

Second, cloud hashing contracts are ludicrously expensive, but not a scam as you have plenty of info to make a reasonable decision to buy or not buy.

Third, you can get *much* more cost-efficient miners that are in stock and ready to deliver that will obliterate your 0.36 BTC/100gh price point.

Fourth, I purchased two Antminers less than two months ago and they've already paid for themselves.  A <2 month ROI is insanely awesome.

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June 27, 2014, 03:35:09 PM
 #11

First, if you buy hash power with BTC, make sure you rebuy the BTC so you can track profits in fiat.

Second, cloud hashing contracts are ludicrously expensive, but not a scam as you have plenty of info to make a reasonable decision to buy or not buy.

Third, you can get *much* more cost-efficient miners that are in stock and ready to deliver that will obliterate your 0.36 BTC/100gh price point.

Fourth, I purchased two Antminers less than two months ago and they've already paid for themselves.  A <2 month ROI is insanely awesome.
You're right. If he buys the 100 GH using USD, and earns 0.28 btc in 2 years he will profit.
Those 0.28 BTC might be worth a lot more in the future.


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June 27, 2014, 03:37:40 PM
 #12

How about you move somewhere where MHs are more affordable instead of claiming that bitcoin mining is a scam.
The real problem here is he claims the entirety of bitcoin mining is a scam. If anything, it's cloud mining that may be able to take that title.

Cloud mining is overpriced and lots of other things, but it's not the fault of the protocol when you decide to use them.

People buy their own miners and mine that way, instead of cloud mining. As such, mining YOURSELF is not a scam, but using CLOUD MINING very well can be.

The OP still needs to learn the differences, although I will admit I'm still learning too.

This is much possible.
We can go on saying that cloud mining is a scam, I'm still OK with that.
Still, I think it's quite important, when I see how many people are putting money in it, what do you think?

About mining hardware, I made a quick search: http://www.amazon.com/Bitmain-Antminer-S1-Blade-Bitcoin/dp/B00HL4MEG6

Data:
  • 180 GH/s. Warranty-voiding overclock to 200GH/s possible.
  • Consumes 360w of 12v power. Expect 400W if overclocked.
  • Power Supply is not included. Requires 2 6-Pin PCIe power connectors.

Now, I spent around 150 Euro for 100 GHs, this piece of hardware costs 210 Euro and gives you 200GHs.
If with 100 GHs I was earning 0.000150 per hour, I guess this will earn 0.000300 per hour?
Probably more, as there are no fees for the cloud support, but I can't know how much more.
Anyway, let's say it cuts off 0.000400 BTC per hour, ok? I think I'm large with that.
0.000400 * 24h = 0.0096 BTC
0.0096 * 12d = 0.1152 BTC
I put this number in my spreadsheet (thanks Google!) and the result after 1 year is: 0.752461 BTC, that, converted to euro is 320.
You get a return of around 50%.

So, ok, I'm an idiot for trusting cloud hashing. Yahoooooo! Cheesy

Mhhh... oh but also put electricity cost in that count... don't know how much is that for running that hardware for ONE YEAR.

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June 27, 2014, 03:50:07 PM
 #13


We can go on saying that cloud mining is a scam, I'm still OK with that.
Still, I think it's quite important, when I see how many people are putting money in it, what do you think?


Yes.  Cloud mining is an obvious scam.

If the cloud mining "company" can turn a profit running their miners, then why would they share that profit with you?  They can just keep it all for themselves.  The only reason for reselling mining "profits" is to sell them for more than they are worth, allowing the cloud mining company to increase their profits at your expense.

As for pool mining with your own hardware, it is a VERY competitive business.  You need access to the best hardware as soon as it is released by the manufacturer, and you need access to cheaper electricity than your competitors.  If you are buying used mining hardware, then you are almost certainly buying hardware that the original owner has already determined is no longer profitable to run.

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June 27, 2014, 03:53:21 PM
 #14


We can go on saying that cloud mining is a scam, I'm still OK with that.
Still, I think it's quite important, when I see how many people are putting money in it, what do you think?


Yes.  Cloud mining is an obvious scam.

If the cloud mining "company" can turn a profit running their miners, then why would they share that profit with you?  They can just keep it all for themselves.  The only reason for reselling mining "profits" is to sell them for more than they are worth, allowing the cloud mining company to increase their profits at your expense.

Mhhh I don't know if I'm totally in with this.
I think cloud mining COULD be honest.
You can ask people money to buy mining hardware that is more performant in example, and share the mining with them.
You can set up a 400000$ mining factory by building a software/hardware infrastructure thanks to people funding you, thing that you can't obviously do alone... unless you have 400000$ of course.

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June 27, 2014, 04:07:34 PM
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scams, scams everywhere...

Keep your BTC and just wait for the value to increase. No need to lose money.
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June 27, 2014, 04:22:13 PM
 #16


scams, scams everywhere...

Keep your BTC and just wait for the value to increase. No need to lose money.


I agree.

I was greedy, I paid for it Cheesy

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June 27, 2014, 05:08:39 PM
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Another thing to consider is *where* you get your cloud mining GH/S from...

I know its popular to hate on ghash right now, but let's take a look at cex.io, the GH/S trading side of the pool.

Right now, the current sell order is at 0.00747497 BTC per GHS.

CEX charges 0.2% per trade

So let's say you bought 100 GHS from CEX, that would run you 0.748991994 BTC including the trade fee.

In order to get out with only what you put in you would need to generate 0.00149499 BTC and still sell at 0.00747497 BTC per GHS. If you are able to sell for higher than that (which in defiance of all logic and difficulty has lately been very, very possible) then you could actually profit just on the trading alone.... but we're here to talk mining, not trading.

Based on the last few blocks I've gotten, 100ghs is likely to net you about 0.00000552 per block on ghash.io and yesterday we got 56 blocks, which puts you at making 0.00030912 BTC gross.  CEX also charges maintainance fees that can run around 35% to cover power and repairs.  Factoring that in, you'll be pulling in a net daily income of 0.00020093 at present difficulty.

According to Zeroblock, the next difficulty adjustment will happen in 1.8 days as of the time of posting.  So that means 0.00036167 before the next increase.

I claim no expertise on predicting difficulty increase(Though I've heard using a ouija board or voodoo has had good success) , but let's use 20%  every 10 days since this makes the math a bit easier and I think is pretty close.


For days 0-1.8 you've so far made 0.00036167 the remainder of that last day you could expect to pull in a net of 0.00003214

For the next 9.8 days 0.00000441 per block, 0.00024696 per day (gross) and 0.000160524 per day net. Total of 0.00157314 for that difficulty and 0.0019348 grand total between now and the end of the next difficulty.

For the next 2 difficulties, which would be just about a months worth of time the numbers work as follows:

0.00000353 per block, 0.0019768 gross, 0.00128492 Net, 0.00321972 total

0.00000282 per block, 0.0015792 gross, 0.00102648 Net, 0.0042462 total


So at that point you could sell off the 100GHS you have for as low as 0.00744737  (including the .2% sale fee) and still at least get your money back.  If you sell it for what you paid then even after the first 10 days you would turn some profit. (a tiny, honestly not really worth your time profit... but a profit none the less. )  

Obviously there are a lot of factors here that would impact the calculations one way or the other... anything from an increase/decrease in the number of blocks that ghash pulls on a given day to the difficulty increase being better or worse than anticipated. Ultimately, 100ghs isn't going to make you any real money and it should be treated like a hobby more than anything, but you can easily get *some* return as long as you can sell off that hashing power.  It's the fixed multi year contract that screwed you as there isn't a viable exit strategy other than to lick your wounds and learn not to do it again next time.


TLDR: Liquidity is what makes it possible to profit. Which is why you should restate it as "contract based cloud mining is a scam"
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June 27, 2014, 05:13:41 PM
 #18

Bitcoin cloud mining isn't a scam, it's just a rip off, I actually believe maths wise that these cloud mining companies are renting out the Bitcoin mining contracts etc. at a premium then using the money they make to mine the shit out of altcoins and sell them at an even bigger profit because they seem to be extremely determined to not add other coins to their services. We've slowly gotten the occasional Litecoin cloud mining outfits around but only after the difficulty has gone up further.

If you want to hunt for worthwhile deals I recommend https://www.betarigs.com/ which is much more P2P than these companies who rent out other peoples mining gear.
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June 27, 2014, 05:15:26 PM
 #19

Another thin...

...tate it as "contract based cloud mining is a scam"

Interesting post, thank you  Smiley

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June 27, 2014, 05:25:24 PM
 #20

Bitcoin cloud mining isn't a scam, it's just a rip off, I actually believe maths wise that these cloud mining companies are renting out the Bitcoin mining contracts etc. at a premium then using the money they make to mine the shit out of altcoins and sell them at an even bigger profit because they seem to be extremely determined to not add other coins to their services. We've slowly gotten the occasional Litecoin cloud mining outfits around but only after the difficulty has gone up further.

If you want to hunt for worthwhile deals I recommend https://www.betarigs.com/ which is much more P2P than these companies who rent out other peoples mining gear.

Mhhhh sorry but are you kidding me?

Looks to me that site is full of overoveroverpriced stuff... for rent.

After all, if that stuff was still worth it, why aren't they using it?

I mean, if they can mine, why rent it?
Just mine... and earn your BTC.

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