What's the deal with cloud mining? Is it profitable or not?
See what I did here? My amazing (non-existent) photoshop skills allowed me to put a mining facility in the clouds. But enough about the amazing picture.
These past few days I've been trying to do some research on cloud mining. I really want to know if it is profitable or not. But searching the world wide web has taught me only a few things really:
People who are against it say the following:
- They claim almost all cloud mining sites/companies are scams in one way or another. Some would not even mine but use your money to trade. Others do not pay out and others are straight up criminals and take your money and run.
- They claim cloud mining is almost never profitable and they advise you to use the money you want to invest in cloud mining to buy cryptocurrency at an exchange or a broker.
People who are for it say the following:
- A lot of people 'review' cloud mining companies but they actually do not review them, all they tell you is what some companies offer, tell you about some differences and they end up telling you which one they are affiliated with and give you their affiliate code hoping you will use it.
- These people hardly ever inform you about their own investment so we can learn from it. I have not seen a lot of people actually discuss what they invested and what they made during the time the cloud mining has been running. I have not seen a lot of people actually discuss their ROI.
So the people who are against it can quickly persuade you with very good arguments not to invest in cloud mining. The people who are for it are basically selling you their affiliate code but this does not persuade me into thinking it is actually profitable at all.
My conclusion at this point
I don't have enough proof that it is a good investment and that there is a real and perhaps quick ROI to be made. So I've decided I won't invest in cloud mining at this point in time.
But I do know that a lot of people are cloud mining... they can not all be losing money, right? There must be quite a lot of people who are making profit this way. I would very much would like to hear about real cloud mining cases. Has it gone bad? Are you doing well? I'm hoping that there are people here on Steemit that can and want to provide information about it so interested people can make a better informed decision about it. I even may end up using your affiliate code if I decide to start to mine in the cloud. ;)
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Genesis for cloud mining has been a good experience for me. BTC returns have been great. ETH returns were nice, but have slowed by nature of the Ice Age, until they swap the contract to another coin for the remainder of the term. While some cloud mining companies have higher prices and have handled challenged poorly, Genesis has handled adversity well and endured skepticism to continue expanding operations, while not screwing their customers over.
The overall profit for cloud mining takes many months to see as difficulty changes. You have to consider what you're giving up to pay for mining.
Sometimes holding your coins with liquidity might be better than spending them/losing their appreciation potential for a slower gainer. Slow and steady can win the race, but if you lock up $13K on a contract, you could've diversified a lot and made much more than the contract would, even if the contract is worthwhile. With that said, I think a certain portion of your crypto portfolio should have some mining in it. It is good because it also forces you to learn about the process, which can make you more money in the future.
What gets me is when YouTubers claiming to be experts copy and paste some numbers into some profit calculators and assume they'll keep making roughly that amount forever. Difficulty usually always rises and affects that current snapshot's profitability much more than you'd think. The best way to assess this is to look at the charts and people's payout amounts over time to see in real numbers that your output goes down...sometimes faster that "projected". The output can improve, but not often, and not for too long. Look back for months and years, not just the last few weeks.
At this rate, I have no qualms with "lifetime" BTC contracts, which run until they're no longer profitable. Two year contracts for other coins can be fine too, if you do the proper analysis and are confident that the coins will be around and still valuable then. Returns will slow over time if you don't add hashpower to keep up with it, but you can network with friends and online to get referrals so your efforts do that for you for free. The price of BTC will also fluctuate so your x BTC per day may be worth more or less. I like it for average total cost purposes. If you bought a 20 TH Genesis mining contract for ~$2500, and are confident that you'll earn more than BTC over time (which is almost a guarantee), then you essentially bought your BTC for that price versus the market rate of $4,600 now. If lifetime contracts pay out perhaps 1-3 bitcoin over time, then you're in great shape if the BTC price stays at levels that keep this economical.
In sum, time will tell. Cloud mining is relatively hassle free vs doing it yourself. There is no equipment to buy, maintain, feel the heat and hear the loud noise from, pay electric bills for, and have to constantly upgrade to remain profitable. Also not much potential downtime.
Thank you for your reply. If I would go for a bit of cloud mining I think I would go for Genesis-mining. Seems like one of the most respectable companies out there in this scene.
Time will tell indeed.
I'm trying to evaluate the cloudmining ROI of three suppliers.
It is an old post.
https://steemit.com/bitcoin/@toofasteddie/mining-in-the-cloud-update-and-roi-comparison
Cheers
Ok interesting. Thanks for sharing. I wonder if you took the increasing difficulty into account?
I'm just monitoring them by investing a very small quantity (around hundred euros as maximum)...
I'm checking what they produce more or less every day... they are quite consistent and the ROI posted is maintained or sometimes improved (depending how is the market)... I will do an update soon if you are interested.
I am. I followed you back as well. I am especially curious what the increasing Bitcoin mining difficulty will do to your ROI. I'm afraid it will increase the days drastically and therefore not give you much profit. In hat case it would have been more profitable to have bought the Bitcoin and just hold it.
Perhaps it would be a better choice to mine another crypto? Perhaps Monero? I know Genesis can mine Monero. Perhaps another Steemian knows more about this.
FYI. What I'm mining at Genesis is ETH, and in Hashflare is script (Litecoin).
Nowadays I'm studying the Monero contracts of Genesis.
Mining Bitcoin as you said is costing so much and is risky because the Mining suppliers can close the contract earlier depending on the difficulty.
I would suggest you to invest in Genesis-mining better than hashflare and, in particular in both, ether and monero 2 years contracts.
I joined a cloud mining service a while ago. I bought a "lifetime plan" (which runs until the service is not profitable anymore) of 1 TH/s for $120 or so. My calculations at the rate at that moment showed that I would earn back my investment in about 150 days. That was at a daily profit of roughly $0.80 I think. Since then the daily profit slowly kept dropping, up until the time Bitcoin began it's huge climb. It went back up to just over $0.80/day after that.
I'd have to check what the exact rates and profit so far have been, but I'm slowly warning back my investment. It's not making me very rich, but I'm certain I'll break even at a certain point and every day after that is a little more profit.
Side note: I list rewards in dollars, but it's actually in BTC. So even if I don't break even now and the service would stop running due to lack of profit, I still hold the BTC that I have been paid so far. As long as BTC keeps rising I could still turn out making profit in the long run.
Will look up the exact numbers later if you're interested.
(Also I purposefully left out info about the exact service for the same reason I never ever give someone my referral link: I hate referral plans with a passion. I did the maths for myself and I urge everyone else to do that too, don't join because a friend said so but do it because you believe it will work out for you)
Thanks for your reply mate. I am interested in the numbers, hit me up via Discord if you want.
Truly amazing photoshop skills!
Based on that photo alone this post should get a mega whale upvote!
Yes it is profitable... I am already using it
Can you elaborate? Where are you cloud mining? What are you mining? How much have you invested? When did you start making profit?
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Great post! I'm all about these posts that get people talking. Cloud mining wasn't even on my radar until seeing this and now I'm very curious. There are some really good comments diving into this too, so thanks for bringing it up. Keep up the good work!
Thanks mate. Good a few good comments on this one indeed.
But more insight with specific data is needed I think.
Guys please, stay away from cloud mining, it is not profitable! Buy cryptos directly.