I have bot fascinated with cryptocurrencies, the blockchain and its social implications for a long time.
One key facet of cryptocurrencies is te fact the mining – infact its an integral part.
When I dug te, I realized that the time cost of actually investing, setting up and managing a equipment wasgoed neither possible strafgevangenis off rente to mij.
I did however still want to pursue this matter and determined to dip my toes a little bit.
Cloud mining is essentially a turn key solution for people who want to invest ter mining but dont want to do it themselves.
Someone will buy and set up the equipment, and ‘rent’ you ‘hashpower’ which ter turn will ‘mine’ (aka generate) you currency and pay you out.
Online, there wasgoed a loterijlot of noise.
Some people were posting movies of how they are making fat profits and loving life and others complaining and call it all a scam.
It wasgoed all noise so I determined to dig te deeper.
Based on my research, the Two most popular cloud mining operators were genesis mining and hashflare.
I determined to commence with genesis mining because of the enormous user base, it wasgoed unlikely that if it wasgoed an outright scam it would grow to such numbers.
Shortly after I have began my contracts I began asking myself the question: how will you actually measure profitability?
It’s actually a VERY elaborate and it took mij a while to figure this out.
The very first step to measure anything is you need a common denominator.
Common Denominator = FIAT
The intuitive very first thought is to convert all debits and credits to fiat and then see how long it took to make back the FIAT.
Firstly, your FIAT credit is dependent on the exchange rate of BTC and any gains voorwaarde be measured against the option of simply buying bitcoin and holding.
I’ll give you an example, lets say I invested $1000 into mining when bitcoin wasgoed worth $1000 each and lets say I got back my $1000 (ter bitcoin omschrijving) ter 6 months.
Lets assume that the price of BTC has dual ter those 6 months.
Option 1: Buy Mining Contract
- $1000 = 1 btc. Ter 6 months I have 0.Five BTC worth $1000
- I have violated even, hurrraaaaay. But wait.
- $1000 = 1 btc. Te 6 months its worth $2000 USD.
- So basically option Two is twice spil profitable spil option 1 te such a script.
- FIAT is NOT a good common denominator.
Common Denominator = BTC
This is the onberispelijk way to go IMO to measure profitability.
When you invest into any mining contract, you are very first PURCHASING BTC with FIAT, and then you measure ROI based on how long it takes to make your BTC back.
So te the example above my ROI isn’t 6 months (time it takes to make back FIAT) but rather its 1 year (the time it takes to make back the BTC).
The exchange rate inbetween FIAT and BTC is sort of a seperate matter.
More overheen, the same applies to mining other cryptocurrencies.
For example, if I’m mining ETHEREUM:
- Buy BTC
- Invest BTC
- Make gains ter ETH
- Convert ETH daily to BTC to measure ROI
You dont actually convert physically, but for measurement sake you loom it.
#Trio: Actually Measuring Profitability
Enough talk, here are my rules for measuring:
- EVERYTHING gets converted to BTC
- My investment is ter BTC
- My altstem coin payouts are converted to BTC based on daily exchange average
- I only measure what left my account and what actually landed on my account
- I did not receive ANY referal hashpower and have not purchased any hashpower via a referal listig (except a measly 0.005 TH/s which truly can’t skew my gegevens)
I began te march of 2018 and for Trio months I wasgoed working with a very puny contract.
Here you can see my purchases:
Te june and july I stepped up my investment to something serious and spotted a proportionally larger increase.
Here is a summary of ALL debit/credits of my genesis interaction so far:
Here is the same gegevens visualized:
Assuming that I dont make any further investment, I will extrapolate a little bit.
Based on the increase ter mining I have done some very primitive calculations and this leads mij to the following figures
For plainness I have plugged ter a little table
Thus the average month to month increase is 12.7%. I have rounded up to 13% for further calculations.
My pauze even point should be approximately ter May of 2018 OR around 12-14 months from the embark.
Based on a 24 months projection the PROFIT would be:
Everything comes down to how much the payouts dimish by from this point going forward.
Regardless, based on my practice so far and my forecasts, I can conclude:
- Genesis mining is NOT a scam, they do payout daily
- ROI is inbetween 12-14 months
- Profitability based on Two years mining should be inbetween 15-25%, not more.
I will do another postbode ter Trio months to compare my forecasts to reality.
I have developed a format for measuring and logging my mining to be able to measure it zometeen and it can be found here.
If you found this article useful, please register with my referal code: iwUZxN
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Hi Timur, this is indeed helpful thank you so much , Please can I ask that you voeling mij ASAP my name is Daniel Thistlethwaite, I recently invested $14,000 with Genesis Mining on the 1st of August with 101 TH’s and I haven’t sponsored anyone strafgevangenis have I re-invested to purchase anymore mining ! The reason for the urgency is my further who lost all of his pension pot needs to find away to voorkant his retirement and dreamed to waterput all he has into this to help him but I would want him to make another hefty mistake and advice him wrong. I’m truly concurred spil I commenced receiving my daily payouts into my xapo wallet daily from the 4th of Aug which embarked at 0.02305988 a day untill now &, since 20th September they have diminished to being 0.0196594 which is a reduction of 17.61663 % reduction te my daily payouts am I right te assuming that if the difficulty rate increases every month then my 101 TH’s will be tired te just brief of Five.88 months. Which means I won’t even get my original investment back ! Please tell mij that I have this wrong because I can’t afford to liberate his or my money. Any advice would be indeed helpful spil I carnt understand this spil I’m fresh to this !! I have attempted contacting Genesis Mining but I still havent had a reply but it looks by your example that I am right. My voeling telephone no is +44(0)7551903685 thank you so much Daniel
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My name is Timur & welcome to my blog.
I blog about SEO, Marketing, Cryptocurrencies and sometimes very random things. I like to shoot photographs, movies and play with my drone a lotsbestemming. I hope you love your time here.