Mining profitability of cloud mining services

[sevenseals]

Maybe I'm wrong or I didn't considered all the points. But, when I'm doing the math mining isn't profitable at all the cloud mining services but ltcgear. BTC diff doubled every 9 weeks in the last 6 months. Thats an average 8% increase per week. (LTC 6%)

Its a simple math: Mining is only profitable when the weekly ROI is higher than the diff increase per week. None of the big cloud mining services reach this 8% (resp. 6%). The only I know are some doubtful services like grmining and cointellect.

I wonder that so many people mine at a loss. They all can't be stupid.

Am I wrong?

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[FattyMcButterpants]

People do not know how quickly the difficulty will increase in the future. They are betting that the difficulty will rise at a slower rate then it has in the past. If they are paying for electricity then they are also betting on the price of bitcoin going up as the electricity cost will decline when measured in bitcoin

[clubsofsteel]

People do not know how quickly the difficulty will increase in the future. They are betting that the difficulty will rise at a slower rate then it has in the past. If they are paying for electricity then they are also betting on the price of bitcoin going up as the electricity cost will decline when measured in bitcoin

agreed!

[Feneusens]

People do not know how quickly the difficulty will increase in the future. They are betting that the difficulty will rise at a slower rate then it has in the past. If they are paying for electricity then they are also betting on the price of bitcoin going up as the electricity cost will decline when measured in bitcoin

That is why most people buy cloud mining now, most cloud mining offer maintenance free. And if difficulty stay the same then ROI is really fast like 2 months.

[Drax]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

[ajw7989]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

What makes LTCgear and a few other sites similar to it much better is no maintenance fees. This is very good considering the most competitive services that do charge fees take at least 50%

[Megabit monster]

My hashlets over at GAW miners are making .00000001 BTC a day.  Thats 150MH/s for one satoshi.  Cloud mining is busted imo, unless its just GAW.

[opossum]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

This doesn't make any sense. How can they afford to do this? This would essentially mean that they are having to purchase additional mining power for the benefit of the shareholders ever 6 weeks but not receive any additional funds to cover such purchases.

[jimmothy]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

This doesn't make any sense. How can they afford to do this? This would essentially mean that they are having to purchase additional mining power for the benefit of the shareholders ever 6 weeks but not receive any additional funds to cover such purchases.

It's a ponzi.

[notlist3d]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

This doesn't make any sense. How can they afford to do this? This would essentially mean that they are having to purchase additional mining power for the benefit of the shareholders ever 6 weeks but not receive any additional funds to cover such purchases.

It's a ponzi.

It is unusual how they are able to "multiply our shares by 1.35 every month and a half".  I don't know how this would be sustainable.  I wish LTCgear would release some photos of data center, or something tangible.     

[opossum]

What also helps is that websites like LTCgear multiply our shares by 1.35 every month and a half. This somewhat compensates slightly for the difficulty increase, making the initial weeks still very close to the original difficulty.

This doesn't make any sense. How can they afford to do this? This would essentially mean that they are having to purchase additional mining power for the benefit of the shareholders ever 6 weeks but not receive any additional funds to cover such purchases.

It's a ponzi.

That is what I was leading to. But when you lay out the facts and let the reader make that conclusion it is more convincing then an outright claim/statement that ltcgear is a ponzi.

I find it somewhat comical to see how many people are selling their shares at huge discounts in the digital goods section, I am all but certain that they are all shills sending funds directly to whoever is behind ltcgear.

[caga]

My hashlets over at GAW miners are making .00000001 BTC a day.  Thats 150MH/s for one satoshi.  Cloud mining is busted imo, unless its just GAW.

Maybe you need to upgrade your plan. I am not sure, how profitable mining can be, but it does seem, that cloudmining will be generating more returns. Can someone explain why does buying hashing power through cloudmining not a good strategy?

[notlist3d]

My hashlets over at GAW miners are making .00000001 BTC a day.  Thats 150MH/s for one satoshi.  Cloud mining is busted imo, unless its just GAW.

Maybe you need to upgrade your plan. I am not sure, how profitable mining can be, but it does seem, that cloudmining will be generating more returns. Can someone explain why does buying hashing power through cloudmining not a good strategy?

I like hardware myself.  If cheap electricity it can be a good idea.   At the end you own hardware, most cloud mining you own a certain MHz or GHz not a miner.

Some cloud mining is great i'm sure for some(depending on the site).

[bitcoinpete]

If I am not mistaken LTC gear does reinvest a good portion of the earnings instead of just paying out 100% mining revenue to the person who purchased the mining contract. My big problem with this company is that they are creating allot of sales pressure on litecoin which will make it less profitable in a few weeks time. In 2/3 months time I could see the price of litecoin halved compared to that of btc . Payouts are on friday nights so you can check and see how the sales orders start to acumulate every week at that time. If it truly is a ponzi then those who invested early will be rewarded and those joining now will get screwed