Cloud Mining Rating System

[eightcylinders]

This is a much better thread and rating system than Puppet's, It's a shame this didn't get more attention

Thank you! I saw puppet's too.  It is a good system if you are just looking at credibility alone.  I was trying to tie in several different issues.  My next update this weekend will add more and update some of the ratings.  I think if I can keep it up folks might notice it more.  Its a lot of work though.  Makes me really appreciate what folks like dogie have to do for their perpetually updated ratings.

[NeonTranceBadger]

You gave KNC 4 times the score of GAW. That alone shows how back-asswards this is.

GAW
Mining Activity- 10, at east. bitmain order confirm, as well as dc pics.
Backing- 5-8ish. Backed by cantor-fitzgerald.
Verified hashrate- same as mining activity, 10
Longevity- 6. Started up in June.
Peer review- 3, to please you. I don't know what to say... find me another company where you can chat with the CEO.
Resale or buyback- 18, only because of 10% market place fee.
Contract- 5? I have no experience with it.
Legally enforceable- 10, you said it.
Relative static ROI- 10. Got mine in less than 3 months.
Payout probs- -10. yeah, it was messed up for a while there.
Cost- -5, sure cost is a bit high
MLM- -10. definitely evident.
total: 52. We'll halve it, and call it 25 on the WAY conservative side. still better than your BS review.

Only Josh has said he has backing from Cantor-Fitzgerald, would need verification from Cantor-Fitzgerald before it becomes true.
True Hashrate has never been verified anywhere and most of those Antminer S4s appear to be being sold on oneminer.com.  
ROI is now in years and since paycoin has no true value right now it can't count towards the ROI.  BTC mined and selling of hashlets on the market should only count towards ROI.

[suchmoon]

You gave KNC 4 times the score of GAW. That alone shows how back-asswards this is.

GAW
Mining Activity- 10, at east. bitmain order confirm, as well as dc pics.
Backing- 5-8ish. Backed by cantor-fitzgerald.
Verified hashrate- same as mining activity, 10
Longevity- 6. Started up in June.
Peer review- 3, to please you. I don't know what to say... find me another company where you can chat with the CEO.
Resale or buyback- 18, only because of 10% market place fee.
Contract- 5? I have no experience with it.
Legally enforceable- 10, you said it.
Relative static ROI- 10. Got mine in less than 3 months.
Payout probs- -10. yeah, it was messed up for a while there.
Cost- -5, sure cost is a bit high
MLM- -10. definitely evident.
total: 52. We'll halve it, and call it 25 on the WAY conservative side. still better than your BS review.

eightcylinders has laid out comprehensive rules on how he calculates the score. For example you can't just use your anecdotal evidence that you got your ROI in "less than 3 months", it has to be calculated the same way for all services.

[suchmoon]

This is a much better thread and rating system than Puppet's, It's a shame this didn't get more attention

Thank you! I saw puppet's too.  It is a good system if you are just looking at credibility alone.  I was trying to tie in several different issues.  My next update this weekend will add more and update some of the ratings.  I think if I can keep it up folks might notice it more.  Its a lot of work though.  Makes me really appreciate what folks like dogie have to do for their perpetually updated ratings.

You might wanna post something at least once a week to bump the thread. I can help you out with some of the services that I use, I think I could find time to re-check 2-3 every week.

[suchmoon]

This is a much better thread and rating system than Puppet's, It's a shame this didn't get more attention

What about chabat mining? They where on an article on CCN not long ago

It would be waste of time to try adding them IMHO. The article on CCN was a paid ad.

[cakir]

Hi I want to add something about Umisoo of Hashnest.
I wanted to try it so I've bought 10 GHs at 13.5 mbtc 2.5 moths ago.

Then they lowered the price so I got 13GHs.

In this 2.5 months it generated 6.5 mbtc (ROI would be ~6 months, quite normal for a cloud mining).

Then they activated the market, so I've sold 13 GHs at the price of ฿0.00095 so I got ฿0.01235 for selling it.

I had 18.5 mbtc that I witdraw. So I've made %37 profit then I quit.

I am glad of this service.

[eightcylinders]

I am always open to discussion ... here are my thoughts:

You gave KNC 4 times the score of GAW. That alone shows how back-asswards this is.

There really isn't any doubt about the legitimacy of KNC's cloud mining.  It is not very profitable (almost sure to lose $$ unless BTC goes up, but that is true of all BTC mining these days), but its legtimacy has been proven - and they make their own miners which is the main reason folks hate them.  They promised never to compete with their customers and then broke that promise.  However, that isn't part of my rating since I am focused on the cloud.

GAW
Mining Activity- 10, at east. bitmain order confirm, as well as dc pics.

The 4-5 Petahash SHA256 order only proves that they will be mining in due course.  It does not prove they actually have mined OR that a 10 Ghs Genesis hashlet actually gives the owner 10 Ghs of cloud mining power; nor is it likely that GAW had this kind of hash power in SHA256 when they started selling the Genesis (based on the dc pictures, it doesn't seem like there was more than 1 petahash and most of those machines weren't even hooked up).  But, in any case, I specifically focused on Prime Hashlets and Zen Hashlets, for which there is zero evidence of actual mining AND where Josh has repeatedly confirmed that payouts on those miners come from non-mining activities like coin ICOs and renting rigs.  This may not bother you, but it is a violation of a fundamental representation - GAW sold the prime and zen hashlets as miners, but they are not really (at least not 100%) and there has been no evidence of actual mining on the scrypt side and much evidence of lack of mining (for example, GAW would represent at least 80% of the entire LTC network if all of the scrypt miners were in fact mining scrypt).
[/quote]

Backing- 5-8ish. Backed by cantor-fitzgerald.

Not exactly.  It is backed by a partner at cantor-fitzgerald.  That still means something I agree but we do not really know how much backing there is since he is a silent partner (Josh's words to me).  I am considering up-ping the rating for this somewhat; would be a lot higher (max) if Cantor Fitzgerald as a firm backed GAW publicly.
 

Verified hashrate- same as mining activity, 10

Not on primes and zens.  Show me evidence if you think I am wrong.  I very much doubt I am as it would mean that GAW controls virtually all scrypt mining.

Longevity- 6. Started up in June.

Since I was in the founder group (but chose not to ask for a founder badge since I did not want to endorse this) I can affirmatively guarantee you are wrong about this.  GAW may have started back (before June actually).  GAW first offered a hosting service (which barely worked) in about July as I recall but it wasn't cloud.  Zenminer was the first foray with cloud hosting, but it was still hosting until late August/September timeframe.

Peer review- 3, to please you. I don't know what to say... find me another company where you can chat with the CEO.

You may not understand what I mean by peer review.  I mean that the site owner subjects their service to generally un-moderated public critique.  This is important because folks here at bitcointalk have LOTS of experience with bad business models, fraud, profitability, etc.  Scams and bad ideas are shot down pretty quickly.  I have made some posts that I thought were smart, only to be educated in a matter of hours.  It hurts, but you learn best that way.  Someone with a really good idea and solid backing should not be afraid to take criticism.  Look at the Hashie threads.  There are plenty of folks calling Hashie a scam.  They respond and live with it.  That makes them more accountable than a company like GAW that literally runs from Bitcointalk to create its own heavily moderated forum complete with banning and downvoting to keep out criticism.  They are getting a lot better over at hashtalk, but it is still pretty Pollyanna-ish.

Resale or buyback- 18, only because of 10% market place fee.

We are pretty close here.  I took out an additional 3 points because the market is not very liquid.  Try selling 100+ mhs of any hashlet, even at a price below the lowest listed price.  It will take a long time - days usually (or it did when did it).

Relative static ROI- 10. Got mine in less than 3 months.

The only way that is true is if you bought at the 16/mhs price and/or converted cheaper zeues miners that GAW was liquidating towards the last month before zencloud, and then sold the hashlets for more.  Right?

My formula for relative static ROI does not account for the ability to sell you miner at a profit; it is purely based on payouts less maintenance fees.  That way, relative static ROIs are comparable and can't be influenced by market manipulation.

Right now, there is no possibility of ROI even with primes.

I could imagine including in the rating system the fact that hashlets can be sold for more than they cost since the prices go up and down; but that is a volatility measure and volatility could be good or bad. 

The rest you seem to agree with me on.

[theboarderdude]

@eightcylinders- First off- thanks for having a level head and not screaming "gaw sucks! Ponzi!"

Props on the rating system, I really like it. However, I feel it doesn't place enough emphasis on profitability, and that's what we're all here for, right? Last time I heard, wasn't cex.io mining negatively?

For KNC- yeah it's definitely legit. They tend to fluff their customers over, so I don't really see cloud mining going much different. JMO.

Mining activity- True on the 'mining in due course'. When I purchased, I interpreted it as I was getting a payout from zenpool, which generated payouts from mining, renting, etc. I really think this category is up for debate based on technicalities. Also, Have you read the latest WSJ [Suspicious link removed]j.com/moneybeat/2014/12/01/bitbeat-under-fire-gaw-miners-ceo-garza-takes-on-his-critics/?KEYWORDS=paycoin) I trust WSJ as a reputable source, so I believe in the 28,000 btc address. With scrypt, can't they be mining other scrypt coins as well?

Backing- I thought is was out of ten, so my rating is 10-16ish? I feel a rating somewhere in there is appropriate.

VH- primes and zens mine(or should be at least) zenpool, which gets it's income from a variety of sources. It's an issue though.

Longevity- I bought in August 23rd, as was under the impression that zencloud had been around for a couple months.

Peer review- Members here are pretty quick to shoot stuff down. For every nay-sayer here, there is another supporter over on hashtalk. I understand why they created it- I mean what company wants the first thing their customers to hear to be "Terrible investment! Ponzi!"

For the market, anything in excess of 50mhs will take a while to sell, simply because the majority of investors aren't throwing hundreds or thousands of dollars at it. I listed a single zen a couple days ago, and it was gone in seconds(literally)

I bought in at 16/mh, so yeah, that's why I've gotten my money back. Regardless of the site, everybody has a slow roi right now.

[suchmoon]

I trust WSJ as a reputable source, so I believe in the 28,000 btc address. With scrypt, can't they be mining other scrypt coins as well?

The 28k address has been debunked in a couple of ways: there is no evidence of newly generated coins arriving at it, and 28k BTC over 2 months would equal 35 PH/s - far too high even compared to GAW's own claims (e.g. warehouse capacity).

All other Scrypt coins are less than 10% of LTC, and the only other big Scrypt coin (DOGE) is merge-mined with LTC.

In other words, there shouldn't be any "belief" in the inherently trustless environment of crypto-currencies. There are cryptographically verifiable methods of proving mining capacity and any cloud mining business not doing that should be rated lower than those who do.

[RD965]

This is a much better thread and rating system than Puppet's, It's a shame this didn't get more attention

What about chabat mining? They where on an article on CCN not long ago

It would be waste of time to try adding them IMHO. The article on CCN was a paid ad.

Well they basically paid every news blog then, they have loads of customers and it just exists and works, so why not include it? If you have all of those lol

[Puppet]

I applaud the effort, but dont see the logic in scoring simultaneously things like  profitability and legitimacy. They are dramatically different things and should be gauged separately. Who cares what the (apparent) long term profitability of a ponzi is when legitimacy is non existent and therefore the issuer very likely to just run off with your coins?  Of course the obvious ponzi's  can lower prices why should that balance out the fact they are a ponzi?

Longevity by itself is also a misguided criterion.  For a ponzi it merely shows how successful it has been in the past, and to some extend, how likely it is it will collapse soon. Neither seems a positive thing to me. It makes more sense to look at payouts vs sales - if the numbers are available; if for a sustained period the company is paying out more than it receives in fresh sales, that *migh* be an indication of legitimacy, but only if you accept the provided stats as truthful.

There are many more things that IMO dont make sense, but Ill just put here that pbmining has been underpaying for a few weeks now, not been answering  emails or PM's  since quite some time. How it scores anything >0 shows me your rating system is both not correctly applied and flawed.

[eightcylinders]

I applaud the effort, but dont see the logic in scoring simultaneously things like  profitability and legitimacy. They are dramatically different things and should be gauged separately. Who cares what the (apparent) long term profitability of a ponzi is when legitimacy is non existent and therefore the issuer very likely to just run off with your coins?  Of course the obvious ponzi's  can lower prices why should that balance out the fact they are a ponzi?

I look at this from a purely probabilistic standpoint.

Would you rather invest in a company that is 50% likely to be a Ponzi, but has a 6 month ROI of 400%, versus a company that is only 10% likely to be a Ponzi but has a 6 month ROI of 2%?

The question can be expressed as an expected value of return, where x is the probability of a cloud mining service being a Ponzi, and y the 6 month ROI:

E(x,y) = (1 - x) * y

Obviously, we don't know exact values for x, y but it is clear if you think about it that E is related to both x and y.  Unless you have set x at 0 or 1, it is important to analyze both together.

Longevity by itself is also a misguided criterion.  For a ponzi it merely shows how successful it has been in the past, and to some extend, how likely it is it will collapse soon. Neither seems a positive thing to me. It makes more sense to look at payouts vs sales - if the numbers are available; if for a sustained period the company is paying out more than it receives in fresh sales, that *migh* be an indication of legitimacy, but only if you accept the provided stats as truthful.

I disagree somewhat.  A ponzi scheme relies on ever increasing investments for its success.  A ponzi that starts out at 1 BTC, has to get 1.2 BTC new investment in order to provide a 20% ROI to the first investor.  The resulting demand for cash in any ponzi is always an exponential curve.  The longer the timeframe, the less likely it is that the ponzi can survive since the exponential curve will eventually guarantee collapse.

You are right, though, that 6-12 months in the bitcoin world is probably not long enough to guarantee collapse. 

[eightcylinders]

Thinking about puppet's objection to analyzing both legitimacy and ROI in the same ratings system...

My response (above) is that the expected value is a function of both likelihood of (ill)-legitimacy and  ROI.

However, really I should be treating legitimacy (and enforceability) as modifiers of ROI, where expected return in a probability sense is is modified by (a) the probability of Legitimacy (L), and (b) the probability of being able to recover your investment in the event of illegitimacy/enforceability of contract (K).   This implies that I should modify the points system to use Legitimacy and Enforceability as scalers rather than summing/subtracting points.

Proposal:

Assuming points are a proxy for probability:
 
- there are 100 points in the Legitimacy category, so Legitimacy (L) = Legitimacy points/100 (probability between 0-1, with 0 being highly likely to be a scam/illegitimate).

- there are 50 points in the Enforceability category, so K = Enforceability points/50 (probability between 0-1).

So the E(I,K,Static ROI,Investment) = [L * (Investment + Static ROI)] + [(1 - L) * K * Investment]

Note that the first term is the risk of illegitimacy which applies to both the original investment and the Static ROI expected, and the second term is the ability to recover the original investment if it turns out to be a scam (enforceability) which only applies where the investment is illegitimate (1 - L).

If I redefine Static ROI' as the return on $100 over 30 days, the E would be:

E(I,K,Static ROI') = [($100 + Static ROI') * L] + [(1 - L) * K * $100]

This would essentially mean a calculation (based on the points system, all other factors being equal) that is the value of a hypothetical $100 investment aftrer one month (inclusive of your original investment), taking account of risks of illegitimacy and enforceability.

It is a lot more complicated than adding and subtracting points, but maybe more accurate of a reflection of how we should think about these three very different categories of ratings?  Thoughts?

[Udyr]

im going to bookmark this, for future reference. thanks guys for the cross comparison.

since i got confused w. this cloud contract hype etc.

[Victoo]

AM Hash lists Ghash.io as one if its main partners on the first page. They seem to be in bed with cex.io, so it's basically the same. thing. More or less.

[Puppet]

I look at this from a purely probabilistic standpoint.

Would you rather invest in a company that is 50% likely to be a Ponzi, but has a 6 month ROI of 400%, versus a company that is only 10% likely to be a Ponzi but has a 6 month ROI of 2%?

Id invest in neither.

I disagree somewhat.  A ponzi scheme relies on ever increasing investments for its success.  A ponzi that starts out at 1 BTC, has to get 1.2 BTC new investment in order to provide a 20% ROI to the first investor.  The resulting demand for cash in any ponzi is always an exponential curve

No its not. Not if you assume difficulty is going up. Theoretically a mining ponzi doesnt even have to collapse, if difficulty keeps going up fast enough ensuring investors lose money that way, and if its run by a benevolent scammer.
Of course the latter is pretty darn rare so they vanish much earlier, around the time where there daily/weekly/monthly intake is less than their payouts.

[suchmoon]

AM Hash lists Ghash.io as one if its main partners on the first page. They seem to be in bed with cex.io, so it's basically the same. thing. More or less.

A lot of conclusions from one logo on a webpage. Do you have any real information on that?

[Ziggs]

you should add hashnest as best as well. 

[eightcylinders]

you should add hashnest as best as well. 

Umisoo on Hashnest is on there .. ranked third highest actually (and probably higher now that their cloud hashing became re-salable).

The rest of Hashnest is too complicated - each machine type would require a different ranking.

[Mabsark]

AM Hash lists Ghash.io as one if its main partners on the first page. They seem to be in bed with cex.io, so it's basically the same. thing. More or less.

Ghash.io is just a mining pool which anyone can use. Would you say everyone pointing their miners at Ghash.io are in bed with CEX.io. That seems pretty weird to me.