Thinking about doing some Cloud Mining? Read this first

[OmarBessa]

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!

[1713984450]

1713984450

[Vortex20000]

Read.

Decent writeup

[OmarBessa]

Thanks Vortex20000! That's good to read.

[CliveK]

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]

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]

nice article.

some interesting points being made there +1

[OmarBessa]

Thanks, SecureExchange, doing the best I can. ^^

[cryptomad]

Thanks for the information much appreciated.

[OmarBessa]

Thanks for reading CryptoMad.

[djnocide]

great article
really interesting

[OmarBessa]

Thanks djnocide!

[okae]

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]

okae, thanks for reading it, yes we're all on the same boat with pb it seems. :\

[okae]

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...

[BitCoinPokerBro]

very interesting read

[OmarBessa]

Thanks BitCoinPokerBro! Glad to hear that!

[elgimpo]

That was an excellent read

[OmarBessa]

Thanks elgimpo!

[cryptomad]

Thanks for the information buddy Much appreciated

[cryptost]

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.