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Author Topic: Thinking about doing some Cloud Mining? Read this first  (Read 3882 times)
OmarBessa
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September 21, 2014, 11:33:48 PM
 #1

Hello, I wrote this to settle some wannabe cloud miners questions.

http://omarbessa.com/a-cloud-mining-analysis.php

"What should you think before buying Cloud-Mining? You might wonder if it is profitable at all. There are cloud mining haters, and there are cloud mining enthusiasts; you might be wondering in whom to trust, the answer is: none of them!

Trust Math & Science![...]"

I added a polynomial model of bitcoin difficulty and cloud mining returns. Let me know if it was helpful!
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Vortex20000
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September 22, 2014, 12:17:44 AM
 #2

Read.

Decent writeup Smiley

OmarBessa
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September 22, 2014, 12:25:19 AM
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Thanks Vortex20000! That's good to read. Smiley
CliveK
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September 22, 2014, 04:25:58 AM
 #4

Thanks for the article. I was hoping it would at least compare regular mining to cloud mining to assist with making an informed unbiased decision, but instead it was just a math formula comparing apples to nothing.

Your statement "The wisest choice would be not to cloud mine at all," eludes that the positive horizontal asymptote is something unique to cloud mining. Can you demonstrate how regular mining compares? With rising cost of power, or even with just the cost of power, regular mining you actually start to lose money at some point, which isn't something that happens with all cloud mining contracts, not including the initial cost of the mining contract or the cost of the ASIC for simplicity sake.

I am neither pro nor con cloud mining, excluding centralisation concerns. I am currently doing both as an experiment, and appreciate the work you have done, and wouldn't mine adding what you did to my research as I think it adds value, but the conclusion just doesn't make sense without comparing it to something, or at least the statement I mentioned doesn't make sense. Once you compared the two, your conclusion would need to be (based on your view above) that the wisest choice would not to mine at all. Bitcoin uses PoW and mining is essential regardless of how it is done.


OmarBessa
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September 22, 2014, 04:41:41 AM
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Hello CliveK, I haven't got any hard data on bitcoin mining off the cloud. But every mining operation should have a similar math formula, I do not agree that the positive horizontal asymptote is unique to cloud mining as the difficulty rises are exponential for everyone, and electricity costs are more or less a constant.

According to some heavy duty miners—over 100 BTC mined—I've talked with, these returns are about 1/30th of what you could get mining by yourself, all costs included. Perhaps I'm assuming that people have read the previous PBMining article before this one, where I said just that. Thirty times the profit from cloud mining sounds like an excellent investment, but I haven't got any data to back up that claim.

The big problem—and I say that in the previous article too—is that I cannot prove if this company I tested is really mining at all. As far as I know it could be a HYIP.

Based on that:

1) The continuity of the operation does not depend on you.
2) It is hard to enforce your legal rights as owner of the contract.
3) The returns are very likely to be much lower than mining by yourself.
4) It is very easy to manage a mining operation.

I feel it is safe to say that one shouldn't cloud mine at all. Since there's other investments that will pay undoubtedly more, in the same time-frame.

Thanks for your feedback. I'll see about revising the phrasing in the article, and linking the previous one.
SecureExchange
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September 22, 2014, 04:46:29 AM
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nice article.

some interesting points being made there +1
OmarBessa
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September 22, 2014, 04:53:53 AM
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Thanks, SecureExchange, doing the best I can. ^^
cryptomad
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September 22, 2014, 11:41:16 PM
 #8

Thanks for the information much appreciated.

Spend GCN at World of electronics Transfer files at www.gfile.us 10k free per transfer Smiley
OmarBessa
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September 23, 2014, 12:15:58 AM
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Thanks for reading CryptoMad.
djnocide
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September 23, 2014, 12:34:32 AM
 #10

great article
really interesting
OmarBessa
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September 23, 2014, 12:37:55 AM
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Thanks djnocide!
okae
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September 23, 2014, 01:22:18 AM
 #12

thx OmarBessa  i read your article and im with pbmining too, i was asking to myselft teh same as you write in this article and i can stress everything from your article.

ty man, i think ppl should know all those things.
OmarBessa
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September 23, 2014, 01:26:49 AM
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okae, thanks for reading it, yes we're all on the same boat with pb it seems. :\
okae
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September 23, 2014, 01:29:26 AM
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okae, thanks for reading it, yes we're all on the same boat with pb it seems. :\

yes is so bad i know, i really understand your frustation, believe me.... but all we can do is to learn from it and go on... Wink
BitCoinPokerBro
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September 23, 2014, 05:09:13 AM
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very interesting read
OmarBessa
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September 23, 2014, 05:24:25 AM
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Thanks BitCoinPokerBro! Glad to hear that!
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September 23, 2014, 06:52:15 AM
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That was an excellent read
OmarBessa
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September 23, 2014, 02:59:18 PM
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Thanks elgimpo!
cryptomad
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September 23, 2014, 09:47:37 PM
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Thanks for the information buddy Much appreciated

Spend GCN at World of electronics Transfer files at www.gfile.us 10k free per transfer Smiley
cryptost
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September 23, 2014, 10:10:14 PM
 #20

Great info thanks, I'm currently with GAW and LTCGear, havent tried Genesis yet.

I think the only one that will ROI at the mo is LTCGear as they are doing 57% off, GAW might ROI but it will take a while.
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