Cloud Mining and the intrinsic value of the Bitcoin Network

[shirkan]

Hi Guys,

the following is based on the assumption that bitcoin as a currency/commodity has no value. The true value of Bitcoin is its protocol and future use of this protocol as a service.

Therefore the Bitcoin-Network and the miners (servers) are the real star. Even if bitcoin as a currency will never succeed, the servers and hashing power has value.

As you know, mining bitcoins has become more and more unprofitable. To me this is the best indication that the bitcoin price is where it belongs  (right now). Why? Because one bitcoin nearly buys you the hashing power needed (right now) to harvest one bitcoin over time (taking electricity, difficulty, yield, etc. into consideration).

In this context, offering Cloud Mining as a service appeals to me as the perfect hedge.
You sell hashing power for the price it is worth right now. You are getting payed for the hardware without ever having to worry about the future bitcoin price and new mining technology coming to the market. Actually, every uncertainty regarding your investment in hardware is eliminated the second you sell a cloud mining contract. You already made your ROI.

From there on out you increase market and pool share. Even if bitcoin as a currency will never succeed you will be sitting on a very valuable good.

As a cloud mining service user, however, all the risk associated with mining has been transferred to you! You will probably never get your investment back.


The race between the cloud mining companies is on! Or what do you think?


PS: English is not my native english..please excuse any mistakes.

regards

shirkan

[jdbtracker]

Yeah I figure it would be a good hedge.

Besides most of the hashing power can be used for other coins as well, But I think it works as a great security system, specially with side-chains... people will need side-chain security.

[lihuajkl]

Not totally agree! What keeps the price is its intrinsic value, which is its protocol, blockchain technology and potential application in our daily life.

[Undermood]

Investing in Cloud mining doesn't mean the holders of mining contract is risk free. They risked the capital invested in it and probably never earn back them due to the increasing difficulty. The most important advantage is that they transfer the operational hassle to the hashpower operators.

[shirkan]

Exactly! Iam not talking about the cloud mining contract holders. Iam talking about the cloud mining service providers.

As a cloud mining subscriber you will probably not make you money back. Due to the discussed reasons.

[cheekychap]

Investing in Cloud mining doesn't mean the holders of mining contract is risk free. They risked the capital invested in it and probably never earn back them due to the increasing difficulty. The most important advantage is that they transfer the operational hassle to the hashpower operators.

You can always be extra careful by only investing in cloudmining companies which have been running for a while and have offered enough proof that they are legit sites.

[Yaremi]

Cloud mining just beginning to gain momentum

In the future, I think this is big business

[newIndia]

Cloud mining just beginning to gain momentum

In the future, I think this is big business

You said the word

Just like Cloud Hosting from Amazon, DigitialOcean is rocking the web, Cloud Mining is going to have a similar future.

[krle27]

What about cloud mining at the PB Mining?

[Mabsark]

Cloud mining just beginning to gain momentum

In the future, I think this is big business

ASICMiner, Bitmain and KNC now have their own cloud mining services and I wouldn't be surprised if Spondoolies launches their own next year.

[malaimult]

Cloud mining just beginning to gain momentum

In the future, I think this is big business

ASICMiner, Bitmain and KNC now have their own cloud mining services and I wouldn't be surprised if Spondoolies launches their own next year.

This is probably because selling hardware has become less profitable as the market has gotten more competitive, plus the fact that the market generally will not support pre-orders anymore so offering cloud mining services will generally be more profitable as contracts can generally be sold at higher prices then physical machines.