Advice for new users regarding CLOUD MINING

[l3sny]

@DrG you're probably right.
I have never thought along this lines as during beta we are focused rather on functionality and marketing plus a number of other technical issues. After all most of the cloud hashing undertakings are anonymous not transparent at all.
Just to address a few points you have raised...
In beta the silver coins will remain in my drawer as I am the man behind it. I do not think there will be any situation I would need to use them as I believe hashing will be profitable long enough to cover the costs and bring profits to the users. Once we implement the full version I have two options: I am happy to escrow them or I would still keep them and store them in place like merrionvaults.ie Personally I would prefer to escrow them to a trusted person from the bitcoin community and I know such person but never discussed it. Escrow would require also distribution of the coins to those users who would be able to collect at least 1TH/s as per our T&C. This would require further arrangements etc. Actually there is only one person I would trust in this respect but I am not going to disclose his name at this moment.

Once we sort out the fiat payments we will be selling only for fiat and only thorough third parties, be they exchanges or businesses or any other company  who would be interested in buying from us GH/s in blocks and re-selling them to the public. We do not intend to be selling long term on the platform as we do at the moment. At that stage the whole busines will be transferred to our company registered here in Dublin. If someone is interested in details I am happy to provide registered name and copies of the certificates, which date back a few weeks. In this respect full transparency no problem.

It all actually depends on two factors: how long would it take to implement fiat payments into beta and how successful beta version would be. As I have stated before we have our mining operations located in Poland and in China. Polish DC is not going to be developed too much any further (apart from the KnC Neptics in the pipeline) as the equipment and hosting prices in China are basically unbeatable and we believe things are going to be that way for long if not forever. I am expecting the photos with our logo from the Chinese DC shortly thanks to courtesy of our counterparts there.

And to be honest with you I am happy with the situation as it is now because I am sure that at the end of the day we will be as transparent and reliable as it should be. I will not be struggling now trying to convince everyone who I am whether I have any miners (some photose in the main kryptologica thread) and whether there is any silver in my posession or escrowed.  I am happy that the people can judge by themselves.

In the mean time I will keep calm and continue mining and promoting kryptologika

[timotheus]

I'm thinking about investing into cloud mining but i don't know where... 

Can someone explain to me why the ranking on these two sites is so different?
http://www.cloudminingreviews.com/   
http://cryptoverse.org/cloud_mining/   

On cloudminingreviews 808 mining is on rank 6 and at cryptoverse 808 mining is on rank 26 (the last one).
Should i trust any of them?
PBmining is rank 1 on cryptoverse but only rank 8 on cloudminingreviews !?

[kakmo]

Thanks alot for this, was going to but now im turned off hahaa i dunno animore..

[DrG]

@DrG you're probably right.
I have never thought along this lines as during beta we are focused rather on functionality and marketing plus a number of other technical issues. After all most of the cloud hashing undertakings are anonymous not transparent at all.
Just to address a few points you have raised...
In beta the silver coins will remain in my drawer as I am the man behind it. I do not think there will be any situation I would need to use them as I believe hashing will be profitable long enough to cover the costs and bring profits to the users. Once we implement the full version I have two options: I am happy to escrow them or I would still keep them and store them in place like merrionvaults.ie Personally I would prefer to escrow them to a trusted person from the bitcoin community and I know such person but never discussed it. Escrow would require also distribution of the coins to those users who would be able to collect at least 1TH/s as per our T&C. This would require further arrangements etc. Actually there is only one person I would trust in this respect but I am not going to disclose his name at this moment.

Once we sort out the fiat payments we will be selling only for fiat and only thorough third parties, be they exchanges or businesses or any other company  who would be interested in buying from us GH/s in blocks and re-selling them to the public. We do not intend to be selling long term on the platform as we do at the moment. At that stage the whole busines will be transferred to our company registered here in Dublin. If someone is interested in details I am happy to provide registered name and copies of the certificates, which date back a few weeks. In this respect full transparency no problem.

It all actually depends on two factors: how long would it take to implement fiat payments into beta and how successful beta version would be. As I have stated before we have our mining operations located in Poland and in China. Polish DC is not going to be developed too much any further (apart from the KnC Neptics in the pipeline) as the equipment and hosting prices in China are basically unbeatable and we believe things are going to be that way for long if not forever. I am expecting the photos with our logo from the Chinese DC shortly thanks to courtesy of our counterparts there.

And to be honest with you I am happy with the situation as it is now because I am sure that at the end of the day we will be as transparent and reliable as it should be. I will not be struggling now trying to convince everyone who I am whether I have any miners (some photose in the main kryptologica thread) and whether there is any silver in my posession or escrowed.  I am happy that the people can judge by themselves.

In the mean time I will keep calm and continue mining and promoting kryptologika

Thank you for your candor.  It is always helpful for a business to see things from the customer's perspective.  Think of a 15 year old who would have to work 3 months mowing lawns to earn 1 BTC.  Why would they be willing to give out their money to somebody who's face they don't know, whose name they don't name.  If you can instill confidence in the customer by proving your are a legitimate operation then they may consider using your business.

Be careful in who you choose as escrow.  If your escrow runs away with money that was supposed to be for the protection of your customers you are still legally liable.  Most customers should not fault you other than bad judgement, but that won't stop he mob mentality people develop.

If a cloud mining business is honest in what they provide and they follow-through with what they promise it should be celebrated as an upstanding business even if it may not be profitable for the customers. 

[DrG]

I'm thinking about investing into cloud mining but i don't know where... 

Can someone explain to me why the ranking on these two sites is so different?
http://www.cloudminingreviews.com/   
http://cryptoverse.org/cloud_mining/   

On cloudminingreviews 808 mining is on rank 6 and at cryptoverse 808 mining is on rank 26 (the last one).
Should i trust any of them?
PBmining is rank 1 on cryptoverse but only rank 8 on cloudminingreviews !?

I went to both sites.  The reviews from cloudminingreviews all seem to be from May.  1/2 the users reviewing 808 mining have latin names - so either they got a bunch of friends to spam reviews or the site is catering to South American customers.

For PBmining to be rank 1 it needed people to click thumbs up or thumbs down.   If the owner of PBmining has access to 40 IPs he could have done all the positive ratings himself.  The ratings are meaningless.

Look at my 2nd post in this very thread - people paid by these mining sites will come to this board and post spam promoting their sites without disclosing that they work for the website.  Why would you trust a user with 4 posts who makes 3 posts promoting a cloud mining site?

[ALToids]

I'm thinking about investing into cloud mining but i don't know where... 

Can someone explain to me why the ranking on these two sites is so different?
http://www.cloudminingreviews.com/   
http://cryptoverse.org/cloud_mining/   

On cloudminingreviews 808 mining is on rank 6 and at cryptoverse 808 mining is on rank 26 (the last one).
Should i trust any of them?
PBmining is rank 1 on cryptoverse but only rank 8 on cloudminingreviews !?

Look at the reviews on those sites.  They're like 5 words reviews like "nice interface.  I like site".  Those sites are meaningless.

More appropriate reviews would be from other miners that have positive or negative experiences who post it here on Bitcointalk.

[Grownwithbtc]

Thanks for the advice, power for mining is costlier than profit earned unless you have nice configurations.

Nice thread, well done.

[l3sny]

Thank you for your candor.  It is always helpful for a business to see things from the customer's perspective.  Think of a 15 year old who would have to work 3 months mowing lawns to earn 1 BTC.  Why would they be willing to give out their money to somebody who's face they don't know, whose name they don't name.  If you can instill confidence in the customer by proving your are a legitimate operation then they may consider using your business.

Be careful in who you choose as escrow.  If your escrow runs away with money that was supposed to be for the protection of your customers you are still legally liable.  Most customers should not fault you other than bad judgement, but that won't stop he mob mentality people develop.

If a cloud mining business is honest in what they provide and they follow-through with what they promise it should be celebrated as an upstanding business even if it may not be profitable for the customers.

The more I think of the escrow of physical silver the more complicated it seems to be. There is no problem when you escrow bitcoin as you release them with a few clicks. When it comes to redemption of silver you need to take into account the costs of labor and distribution to the users. It is therefore subject to further discussion about the technical aspect of it to be as cost effective as possible. I will try to sort it as soon as possible.

[l3sny]

External escrow is basically not possible if it was to involve the distribution. Technically probably I can escrow the coins, pay for it and once the shares will be redempted I will need the silver to be sent back to me to handle it. This is an alternative to the merrionvaults.ie here locally and it has its advantages. But how can I explain I used a private person as an escrow if I had an option to keep them safe in the vault? This issue can be raised by any shareholder at any time and to be honest I do not have a good answer to that. Apart from an argument that an escrow with a respected bitcointalk member would gain more attention on the forum.

I think I would rather stick to the original plan and keep it in the merrionvaults.ie. Escrow of BTC is understandable and easy in an anonymous world. Escow of silver is not that handy and is not justified when the customers are dealing with identifable person or a company.

[nicehash]

DrG, you should add NiceHash

NiceHash.com

• No contracts, bidding system
• Simple way to create orders instantly
• Ability to cancel any order at any time without loosing any funds
• Mine different algorithm coins (SHA256, Scrypt, Scrypt-N, X11, etc.) with massive hash rates

NiceHash.com

[jonnybravo0311]

I have no affiliation with NiceHash (or WestHash); however, I can confirm they actually DO mine.  I know this because I ended up with about 70TH/s on my p2pool node from them.  No idea how they even found my node since I don't promote it (but I do leave port 9332 forwarded so I can look at my stats from the road), but suddenly I had a new miner on my node with a pretty significant hash rate.  When I looked at the traffic, I saw the IP address and it was owned by NiceHash.

Anyway, that's just my 2 bits on NiceHash.  I've checked out their site, and it's pretty interesting.  Basically if you own hardware, you configure it to point to their pool.  You also put out orders for people to use your mining power.  If somebody buys hash rate, and NiceHash decides to use your hardware to satisfy that order, suddenly your miners are running on their pool.  If nobody is using your hash rate, the pool appears "dead" to your miners, so they go to their fallback.

Honestly, it's about the most interesting "cloud" mining solution I've seen yet.  It's distributed because it relies on your hardware, and it actually mines on real pools.  I haven't checked out their pricing or fees, so I can't comment on it.

[cloverme]

It will not work for you if you take it as an investment. But if you buy them, keep them a while and sell them for the same or higher prices you will make a very good profit. Please note that the price on CEX is a market price. There are people willing to pay 0.0038 per GH/s. And there are thousads of them. At kryptologika the market prices are much lower, the maintenance costs are also lower and we add silver price protection for the GH/s.
Perhaps you could make an extra mile, visit our site and compare CEX prices and kryptologika prices and comment here?

What's the value in backing a virtual commodity that you create on your own with another commodity? I guess I don't understand the principal of how having silver ensures anything when the virtual commodity is always decreasing in value over time because of difficulty?  So 1gh today is worth whatever you say it is (1/10 oz or whatever) and in six months 1gh would be worth 1/20th, etc.  Unless customers could withdrawl in silver, what's the value?  

Not trying to attack, just trying to understand.

[l3sny]

It will not work for you if you take it as an investment. But if you buy them, keep them a while and sell them for the same or higher prices you will make a very good profit. Please note that the price on CEX is a market price. There are people willing to pay 0.0038 per GH/s. And there are thousads of them. At kryptologika the market prices are much lower, the maintenance costs are also lower and we add silver price protection for the GH/s.
Perhaps you could make an extra mile, visit our site and compare CEX prices and kryptologika prices and comment here?

What's the value in backing a virtual commodity that you create on your own with another commodity? I guess I don't understand the principal of how having silver ensures anything when the virtual commodity is always decreasing in value over time because of difficulty?  So 1gh today is worth whatever you say it is (1/10 oz or whatever) and in six months 1gh would be worth 1/20th, etc.  Unless customers could withdrawl in silver, what's the value?  

Not trying to attack, just trying to understand.

It is possible that at some stage 1GH/s would not be able to hash enough BTC to cover the costs of mining. We are not sure what hardware will be available on the market say in 6 months or a year and if it will be practical for us to buy it. With the difficulty rising as mad only the rise of the price of bitcoin can balance the costs vs profit. As you know the old miners like Avalons or Jalpenos are usless today. So if we reach the point when we would not be able to reduce the costs further (or because of sudden bitcoin price crash) we will have no other option but to redempt the shares and distribute the silver by posting the physical coins and/or settling in BTC to the users that would possess less than 1TH/s. We cannot predict when this would happen. Of course as any other undertaking of this kind we will be reinvesting money into newer hardware reducing the costs and building up our hashing buffer.

On the other hand however perhaps at some stage the price of silver will be rising on its own or along with the price of bitcoin, who knows. It will make our GH/s even more attractive. We have much better prices than on CEX, much lower maintenance costs and our GH/s is silver protected. I see is no reason why the market price would remain so low for long apart from the fact that very few people know about kryptologika so the turnover is so low. We just leave them as they are for the market to decide.

Does it make sense?

[Daniel007]

I notice that  you have mention about many sites for cloud mining but you haven't mention about Genesis-mining. I think Genesis-mining is providing the best offer of cloud mining. Here is the official thread: https://bitcointalk.org/index.php?topic=602022.new#new

[DrG]

I notice that  you have mention about many sites for cloud mining but you haven't mention about Genesis-mining. I think Genesis-mining is providing the best offer of cloud mining. Here is the official thread: https://bitcointalk.org/index.php?topic=602022.new#new

It was not my intent when making this thread to discuss the various cloud mining sites - there's tons of blogs for that.  I wanted to point out inherent risks specific only to cloud mining when compared to mining with physical hardware.  I happened to list Cex, Lunamina and PB since they were sig spamming and lunamine just ran off with 2000BTC

Genesis mining in particular seemed to have a lot of shill postings in July.  I saw one user running around with 40 posts and 34 of them were promoting genesis-mining and yet he/she never stated they were working for the company.  They may not have been paid by genesis-mining but the posts just seemed wrong, especially how the poster chimmed in topics where the OP wanted to know about hardware specifically.

Until these companies start releasing basic information like their incorporation state and their officers I wouldn't trust any of them.

[DrG]

Gavin Anderson, one of the lead BTC developers, recently warned about some cloud mining companies:
http://cointelegraph.com/news/112329/gavin-andresens-fractional-reserve-mining-cloud-miners-respond

[jimlite]

There are a lot of theories about Zen cloud hashlets and if or what they are mining.
The theory that makes the most sense is that they are leasing or renting out the
hash, which brings in more than a normal multipool. That is my guess at what is
going on. And I have bought some hashlets, see my sig for discounts. Right now it
seems like $15.99/mh with the guaranteed best pool is the way to go.

[bmoscato]

Great post, thanks for the time and effort that you put into it doc.

[ninjaboon]

There are a lot of theories about Zen cloud hashlets and if or what they are mining.
The theory that makes the most sense is that they are leasing or renting out the
hash, which brings in more than a normal multipool. That is my guess at what is
going on. And I have bought some hashlets, see my sig for discounts. Right now it
seems like $15.99/mh with the guaranteed best pool is the way to go.

any idea why they doubled the price for the Zen cloud hashlets ?

[finlof]

IMO cloud hashing is a lot like buying a miner on ebay.  overpriced and will never ROI.  almost always better to buy bitcoin outright.