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Author Topic: BITCOIN CLOUD MINING IS A SCAM (noob word!)  (Read 6501 times)
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June 28, 2014, 01:48:26 PM
 #61

When a miner solves a block,
they get the block reward + all fees from
the transactions in that block.

If they don't solve the block, they get nothing.

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June 28, 2014, 02:02:03 PM
 #62

When a miner solves a block,
they get the block reward + all fees from
the transactions in that block.

If they don't solve the block, they get nothing.


I see, thank you  Smiley

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June 28, 2014, 02:13:25 PM
 #63

no block rewards, but they will get transaction fees (third time I'm saying this).
Pay attention much?

Sorry but they get transaction fees on Bitcoins they mined, if I'm not wrong again.
Why would they want to keep mining when no more Bitcoins are extracted?

Yes you are wrong again Smiley

There is a difference between block rewards and transaction fees.

https://en.bitcoin.it/wiki/Transaction_fees

No, I don't think I am so stupid, sorry  Smiley
Transaction fee = miner gets it on any transaction people do.
Block reward = when new Bitcoins are discovered.

You didn't understand my question.
I put it another way: transaction fees are given to miners based on the bitcoins they mined or by solely the fact that they are mining?

The sum of all transaction fees from all transactions contained within a block are distributed among miners according to the number of shares they submit relative to the rest of the network.

Transaction fees are given to miners based on their proportional share of network hashing power, not according to the number of bitcoins mined.   If it were based on the number of bitcoins mined then miners would never even receive the transaction fees after the block subsidy reaches zero.

And with regards to the necessity of mining for the continuation of Bitcoin, if you stopped mining indefinitely then there would be no more confirmed transactions...ever.  "Manipulating" transactions is pointless if you don't have any more confirmed blocks in the future.

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June 28, 2014, 05:01:09 PM
 #64

Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.

So what if you reinvested the payouts on a weekly basis?

Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?

That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.

Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).

Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment  Cheesy

I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?

I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.

But eventually, you could cash in these shares for BTC.

I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.

So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get riBTCh

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June 28, 2014, 05:58:58 PM
 #65

Mh so tell me, what will happen when all the Bitcoin will be mined?
Why are you eager to find a fatal flaw that is not there?
You won't live to see that day anyways, so you shouldn't worry about it. Also, you can find this information by doing some research.


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June 28, 2014, 06:19:50 PM
 #66

Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.

So what if you reinvested the payouts on a weekly basis?

Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?

That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.

Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).

Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment  Cheesy

I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?

I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.

But eventually, you could cash in these shares for BTC.

I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.

So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get riBTCh

But watch: if you cash back your BTC, somebody else is losing.
So, while you CAN do something by TRADING, you can't do anything by mining.
It's just another asset you are trading, but in general that asset value is nothing.
The only real winner is the cloud mining service.

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June 28, 2014, 06:42:53 PM
 #67

In theory the rate of difficulty increases will slow down as the rate of efficiency of miners (in terms of W/GHs) starts to plateau.

Although there is not a difficulty limit in the Bitcoin protocol there is a theoretical limit as to how high difficulty can rise to. The difficulty will likely not rise to above a rate at which electricity costs would exceed the expected value of the bitcoins mined.

This spot for rent.
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June 28, 2014, 09:04:13 PM
 #68

. you are presumptuous to say the least.

I might suggest that, if you are the kind of person that expects others to act in your best interest, then Bitcoin may not yet be ready for you.

Or to SouthPark it...

'You're gonna have a baaad time"

You didn't understand the sense of this thread.
And I explained it really clearly.
Think of it.

Yeah, I thought of [sic] it. You jumped into a deal before thinking it through. Now you seem to be looking to others that you think should have saved you from yourself.

You need to take responsibility for your own actions in Bitcoin. Ain't nobody else gonna do it for you. It's the Wild West out here - you need to act with appropriate forethought and trepidation, lest you get taken advantage of.

caveat emptor before tempus fugit

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June 28, 2014, 11:04:50 PM
 #69

im doing a test right now..

i hav my own rig mining and i have bought some cloudhash aswell.. (matching hash amounts)

24 hour results

cloudhash amount i can withdraw is 20% lower then my own rigs rewards

if i can remember to come back to this topic ill keep it updated

(but of course you have to account for electric fee that the cloudhash charges, so im not too shocked)

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June 28, 2014, 11:07:06 PM
 #70

. you are presumptuous to say the least.

I might suggest that, if you are the kind of person that expects others to act in your best interest, then Bitcoin may not yet be ready for you.

Or to SouthPark it...

'You're gonna have a baaad time"

You didn't understand the sense of this thread.
And I explained it really clearly.
Think of it.

Yeah, I thought of [sic] it. You jumped into a deal before thinking it through. Now you seem to be looking to others that you think should have saved you from yourself.

You need to take responsibility for your own actions in Bitcoin. Ain't nobody else gonna do it for you. It's the Wild West out here - you need to act with appropriate forethought and trepidation, lest you get taken advantage of.

caveat emptor before tempus fugit

Thank you, I've already stated that I'm noob and in a subsequent post that I've been idiot.
But you look idiot too, at this point.
Because you know, I'm not the only one who put some money in PBMiner, there are other people who have put much more than me, and probably some more are thinking to put money in it.
That's why I wrote this thread.
Maybe you can catch it now.

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June 28, 2014, 11:08:16 PM
 #71

im doing a test right now..

i hav my own rig mining and i have bought some cloudhash aswell.. (matching hash amounts)

24 hour results

cloudhash amount i can withdraw is 20% lower then my own rigs rewards

if i can remember to come back to this topic ill keep it updated

(but of course you have to account for electric fee that the cloudhash charges, so im not too shocked)

Ye, and you have to subtract electricity in your own "income" from mining as well... and see if it really pays back... unless you are stealing electricity Cheesy

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June 29, 2014, 04:48:32 PM
 #72

Cex.io the company behind Ghash.io offers cloud mining.
Do not buy this. You will end up mining in the Ghash pool which is nearing 51% hash rate of the total network.
Which, in simple language, gives certain people the ability to perform a mass fraud (double spending) in bitcoin.
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June 30, 2014, 04:07:04 PM
 #73

Cex.io the company behind Ghash.io offers cloud mining.
Do not buy this. You will end up mining in the Ghash pool which is nearing 51% hash rate of the total network.
Which, in simple language, gives certain people the ability to perform a mass fraud (double spending) in bitcoin.

Check before you post. They're at 35% at the moment.  source: https://blockchain.info/pools
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July 01, 2014, 03:09:58 AM
 #74

In theory the rate of difficulty increases will slow down as the rate of efficiency of miners (in terms of W/GHs) starts to plateau.

Although there is not a difficulty limit in the Bitcoin protocol there is a theoretical limit as to how high difficulty can rise to. The difficulty will likely not rise to above a rate at which electricity costs would exceed the expected value of the bitcoins mined.

That's not going to happen as fast as it should/maybe ever because people keep doing preorders and cloud mining. People running cloud mining operations don't' really care about the price/profitability because they make money by getting someone else to pay for it. Preorders enable companies to make miners that they would never be able to sell off the shelf, and cause miners to use/plug in unprofitable miners in an attempt to make some money instead of losing it all.

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July 01, 2014, 03:50:38 AM
 #75

In theory the rate of difficulty increases will slow down as the rate of efficiency of miners (in terms of W/GHs) starts to plateau.

Although there is not a difficulty limit in the Bitcoin protocol there is a theoretical limit as to how high difficulty can rise to. The difficulty will likely not rise to above a rate at which electricity costs would exceed the expected value of the bitcoins mined.

That's not going to happen as fast as it should/maybe ever because people keep doing preorders and cloud mining. People running cloud mining operations don't' really care about the price/profitability because they make money by getting someone else to pay for it. Preorders enable companies to make miners that they would never be able to sell off the shelf, and cause miners to use/plug in unprofitable miners in an attempt to make some money instead of losing it all.
If a miner were to receive a miner that uses more electricity then it produces bitcoin they would likely not use it for very long as they would just be loosing more money by running it.

CEX charges it's users what is essentially the actual cost of electric and maintenance for their GHs so when the electric cost exceeds the mining revenue they will essentially turn off their GHs. I am not sure about other cloud mining services, but I imagine they have similar terms (it would be possible that customers essentially prepaid for electricity)

This spot for rent.
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July 01, 2014, 03:50:50 AM
 #76

Well thats why the lend the gh to you Smiley

Try cex.io at least you can sell your ghz any time its much more expensive tho
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July 01, 2014, 04:53:26 AM
 #77

I would recommend Scrypt.cc, it is much more profitable since it mine other coins and converts it to BTC. You can sell your KHS at anytime if you need some money fast, or you could buy and sell KHS as a form of income.

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July 07, 2014, 05:32:56 PM
 #78

Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.

So what if you reinvested the payouts on a weekly basis?

Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?

That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.

Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).

Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment  Cheesy

I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?

I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.

But eventually, you could cash in these shares for BTC.

I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.

So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get riBTCh

But watch: if you cash back your BTC, somebody else is losing.
So, while you CAN do something by TRADING, you can't do anything by mining.
It's just another asset you are trading, but in general that asset value is nothing.
The only real winner is the cloud mining service.

That makes no sense. The assets that you've accrued are directly related to mining. Without the mining dividends being reinvested, you have no value beyond the principal.

So while cloud mining may not be great, your premise is flawed.

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July 07, 2014, 05:53:52 PM
 #79

Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.

So what if you reinvested the payouts on a weekly basis?

Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?

That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.

Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).

Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment  Cheesy

I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?

I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.

But eventually, you could cash in these shares for BTC.

I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.

So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get riBTCh

But watch: if you cash back your BTC, somebody else is losing.
So, while you CAN do something by TRADING, you can't do anything by mining.
It's just another asset you are trading, but in general that asset value is nothing.
The only real winner is the cloud mining service.

That makes no sense. The assets that you've accrued are directly related to mining. Without the mining dividends being reinvested, you have no value beyond the principal.

So while cloud mining may not be great, your premise is flawed.

Let's say you pay 100 $ for 100 GHs for 5 years.
In the first year you recover 90 $ with those 100 GHs, and at the end of the 5 years you get up to... uh, well, 95 $, because after the first year the mining income becomes so small it's nearly nothing, thanks to the steady increase of difficulty of the mining process.

Let's say that after the first year you reinvest those 90 $ and buy 90 GHs (it doesn't matter if you do that month by month or week by week, the mechanism is PERFECTLY THE SAME).
After 5 years you still didn't get those 90 $ back. You will be at 86 $ or something. This because, again, mining difficulty increases and you don't reach what you invested.

And let's say that after the second year you reinvest that income of 86$ into 86 GHs.
At the end of the first year of this last investment you get back 80$, STILL LESS THAN THOSE 86$ YOU INVESTED. And after 5 years you will again get less than what you invested.

The result is: you will always have more and more GHs and never get back more BTC than what you invested.
It doesn't matter if you reinvest the BTC you earn from mining or you invest more BTC thanks to grandma paycheck for your birthday: they are BTC, and the GHs you buy with them does not give you back more BTC than what you put in.
But you are actually investing in GHs to get back more BTC than what you invest, right?

Now, I put here a couple examples, then that's all.
You can now buy 1 GHs on CEX.IO for 0.0068 BTC.
This is what you get back after one year (LOL): https://tradeblock.com/mining/a/6c9fc98920
CEX.IO has artificially pumped prices imho, and the only successful people in there are successful because they trade. But even then, there are commissions when you buy GHs or sell for BTC...

PBMining is much better: you can buy 1 GHs for 0.003 BTC at the moment.
This is what you get back after one year: https://tradeblock.com/mining/a/609bf460dc
0.01 BTC. Well, at least you are in active by a measure (if difficulty doesn't get another strange jump).

At this point the only thing you can dispute is the difficulty increase I have put in there.
But look, I didn't invent it, there is DATA about it, and the trend is not changing.
It has been an average of 18% on each step of 12 days in the past and this last step jumped to 25%.
DATA.
Now, you can HOPE the increase in difficulty will be less and everybody will get more BTC, but... that's just... hope.
Statistical data suggest otherwise.

Now, you can either understand this or you can't.
I warned you the way is possible to me to do so, I can't imagine a better way to explain what goes on, and I can't fight (and I don't want) people that WANT to believe something.
It's not even my right, or my duty.
I just talk about this because I feel I do good to people and, in last analysis, to Bitcoin.
I hope this can help you.

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July 07, 2014, 10:11:27 PM
 #80

Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.

So what if you reinvested the payouts on a weekly basis?

Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?

That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.

Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).

Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment  Cheesy

I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?

I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.

But eventually, you could cash in these shares for BTC.

I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.

So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get riBTCh

But watch: if you cash back your BTC, somebody else is losing.
So, while you CAN do something by TRADING, you can't do anything by mining.
It's just another asset you are trading, but in general that asset value is nothing.
The only real winner is the cloud mining service.

That makes no sense. The assets that you've accrued are directly related to mining. Without the mining dividends being reinvested, you have no value beyond the principal.

So while cloud mining may not be great, your premise is flawed.
It is not about how much hashpower that you purchase, it is about the price of your hashpower in terms of GHs (or THs)

This spot for rent.
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