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Cex.io: the largest Bitcoin cloud mining service, not a profitable investment - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/cex-io-the-largest-bitcoin-cloud-mining-service/
Mining in general is not profitable unless you can command discounts from the manufacturers of the mining equipment (you would also need to be able to order enough equipment in order to get them to ship to your first).
Cloud mining is even more unprofitable because people are willing to pay a premium that is not deserved.
The article was correct to say that the price is GH/s decreased substantially from last year, however it failed to take into consideration the rewards that were earned from mining during this period.
You are not missing an indicator. You simply are not looking at the numbers that you have.
You have not attempted to answer the most important question: If you invest now, how much will you make? Look back a few posts, you may find an answer.
You also haven't validated your assumptions. Let me help you. If you bought 1 GH/s on January 2, 2014:
Also, the graph has not "bottomed out". That is a horrible misinterpretation. The price will continue to drop as the difficulty rises. It only looks like it has bottomed out because it has dropped so much.
You have not attempted to answer the most important question: If you invest now, how much will you make? Look back a few posts, you may find an answer.
You also haven't validated your assumptions. Let me help you. If you bought 1 GH/s on January 2, 2014:
| Buy on 1/2/2014 | -0.0417 |
| Revenue | 0.0258 |
| Sell on 6/3/2014 | 0.0072 |
| ------------------------ | ----------- |
| Profit | -0.0087 (-20.1%) |
Also, the graph has not "bottomed out". That is a horrible misinterpretation. The price will continue to drop as the difficulty rises. It only looks like it has bottomed out because it has dropped so much.
Hmm. Ok. I get what you are saying... and can read the numbers clearly... but something in me still doesn't agree...
Take this example for 1GHS:
| Buy on 4/29/2014 | -0.006313 |
| Revenue | (I am too lazy to do the mining math but even at a 50% fee, revenue is still positive) |
| Sell on 6/3/2014 | 0.0072 |
| ------------------------ | ----------- |
| Profit | 0.000887 + mining gains (however small) |
In this case, the buyer makes BTC. To me, it seems like your argument was offering the standard don't "buy high and sell low." But again, perhaps I am missing something. This is why it looks like to me, the market has consolidated and has accounted for future increase in difficulty, etc. At .0072/GHS/BTC * 670$/BTC is $4.82/GHS. On ebay, the cheapest ASIC i saw was $400 for 180GHS ($2.2/GHS), but that is invalid because of economies of scale. The average was ~$5-8/GHS for 2-4GHS ASICs. Which is to say, CEX.io is cheaper then actually buying an ASIC miner for small fries, and it offers them liquidity, which physical ASICs can't--e.g. it becomes a high volatility savings vehicle for diversifying.
I imagine that unless there is a massive run up in BTC price soon, it will quickly become unfeasible for companies to make ASIC miners as electricity cost make them not worth buying, limiting supply, and stabilizing the price--actually I am pretty sure this has already happened--as cex.io no longer offers futures contracts. Again, it seems like CEX.io has consolidated and bottomed out to me. And no, to me, it looks like the graph has bottomed not because it has dropped so much, but because the rate at which it dropped was decreasing, indicating that is was nearing a limit/equilibrium.
But... I guess that is the ultimate trump card isn't it? We are all in this game because we think BTC will go "TO DA MOON." in which case, "To Da Moon" will be followed by massive and very temporary GHS mark ups and then more massive ASIC creation and steep GHS mark downs.
My two sats at least.
Anyway, thanks for your thoughts!
Hey b2f, Its all in the timing and having a plan. If you just buy GHS sit back and wait for the mega profits to roll in then you won't be happy, because difficulty rises, total hash power rises negatively impacting your situation. But if you have a plan in place to trade and mine then CEX offers that opportunity to profit from both. Even CEX themselves advise such http://blog.cex.io/the-secret-of-ghs-price/
You are right in your calcs, you are looking at the here and now and calculating profit is possible if you at least approach it with a plan.
You are not missing an indicator. You simply are not looking at the numbers that you have.
You have not attempted to answer the most important question: If you invest now, how much will you make? Look back a few posts, you may find an answer.
You also haven't validated your assumptions. Let me help you. If you bought 1 GH/s on January 2, 2014:
Also, the graph has not "bottomed out". That is a horrible misinterpretation. The price will continue to drop as the difficulty rises. It only looks like it has bottomed out because it has dropped so much.
You have not attempted to answer the most important question: If you invest now, how much will you make? Look back a few posts, you may find an answer.
You also haven't validated your assumptions. Let me help you. If you bought 1 GH/s on January 2, 2014:
| Buy on 1/2/2014 | -0.0417 |
| Revenue | 0.0258 |
| Sell on 6/3/2014 | 0.0072 |
| ------------------------ | ----------- |
| Profit | -0.0087 (-20.1%) |
Also, the graph has not "bottomed out". That is a horrible misinterpretation. The price will continue to drop as the difficulty rises. It only looks like it has bottomed out because it has dropped so much.
Hmm. Ok. I get what you are saying... and can read the numbers clearly... but something in me still doesn't agree...
Take this example for 1GHS:
| Buy on 4/29/2014 | -0.006313 |
| Revenue | (I am too lazy to do the mining math but even at a 50% fee, revenue is still positive) |
| Sell on 6/3/2014 | 0.0072 |
| ------------------------ | ----------- |
| Profit | 0.000887 + mining gains (however small) |
In this case, the buyer makes BTC. To me, it seems like your argument was offering the standard don't "buy high and sell low." But again, perhaps I am missing something. This is why it looks like to me, the market has consolidated and has accounted for future increase in difficulty, etc. At .0072/GHS/BTC * 670$/BTC is $4.82/GHS. On ebay, the cheapest ASIC i saw was $400 for 180GHS ($2.2/GHS), but that is invalid because of economies of scale. The average was ~$5-8/GHS for 2-4GHS ASICs. Which is to say, CEX.io is cheaper then actually buying an ASIC miner for small fries, and it offers them liquidity, which physical ASICs can't--e.g. it becomes a high volatility savings vehicle for diversifying.
I imagine that unless there is a massive run up in BTC price soon, it will quickly become unfeasible for companies to make ASIC miners as electricity cost make them not worth buying, limiting supply, and stabilizing the price--actually I am pretty sure this has already happened--as cex.io no longer offers futures contracts. Again, it seems like CEX.io has consolidated and bottomed out to me. And no, to me, it looks like the graph has bottomed not because it has dropped so much, but because the rate at which it dropped was decreasing, indicating that is was nearing a limit/equilibrium.
But... I guess that is the ultimate trump card isn't it? We are all in this game because we think BTC will go "TO DA MOON." in which case, "To Da Moon" will be followed by massive and very temporary GHS mark ups and then more massive ASIC creation and steep GHS mark downs.
My two sats at least.
Anyway, thanks for your thoughts!
The herd mentality there is amazing. It wasn't that long ago when GHS were going at .12 in their market.
So, my follow up question is this: what's the indicator i am missing which puts GHS as bearish when even your long term graph seems to have bottomed out?
You are not missing an indicator. You simply are not looking at the numbers that you have.
You have not attempted to answer the most important question: If you invest now, how much will you make? Look back a few posts, you may find an answer.
You also haven't validated your assumptions. Let me help you. If you bought 1 GH/s on January 2, 2014:
| Buy on 1/2/2014 | -0.0417 |
| Revenue | 0.0258 |
| Sell on 6/3/2014 | 0.0072 |
| ------------------------ | ----------- |
| Profit | -0.0087 (-20.1%) |
Also, the graph has not "bottomed out". That is a horrible misinterpretation. The price will continue to drop as the difficulty rises. It only looks like it has bottomed out because it has dropped so much.
In this specific moment of bitcoin history, while the value is under the trendline, I think that holding is the best option.
This way you don't have any cares about scams, trading losses, mining worries.
This way you don't have any cares about scams, trading losses, mining worries.
Yep. Too many horror stories about cloud mining scams are out there. CEX doesn't seem scammish but I am not comfortable with leaving any bit coin anywhere but in my wallet and especially not there in the form of ghash that can plummet at any time.
It's not a scam it's been around for a long time. However if it's a good deal or not, that's another question.
In this specific moment of bitcoin history, while the value is under the trendline, I think that holding is the best option.
This way you don't have any cares about scams, trading losses, mining worries.
This way you don't have any cares about scams, trading losses, mining worries.
Yep. Too many horror stories about cloud mining scams are out there. CEX doesn't seem scammish but I am not comfortable with leaving any bit coin anywhere but in my wallet and especially not there in the form of ghash that can plummet at any time.
Unless someone can explain away this chart, It seems to me that I would rather have my BTC "stored" at CEX.io much like a savings account (you know, back when savings accounts paid interest to our grandparents).
Ever since mid april the cost of a GHS at cex has slowly been going up. Slowly, mind you. But if you zoom all the way out, its a massive reversal over the steep downtrend.
https://bitcoinwisdom.com/markets/cexio/ghsbtc
Ever since mid april the cost of a GHS at cex has slowly been going up. Slowly, mind you. But if you zoom all the way out, its a massive reversal over the steep downtrend.
https://bitcoinwisdom.com/markets/cexio/ghsbtc
There are three things you don't understand.
1. You don't "store" bitcoins at cex.io. You are paying for a service that mines bitcoins for you. There is no guarantee (in fact, it is very unlikely) that you will get back as many bitcoins as you put in, even after you sell your shares.
2. The value of a share decreases as the difficulty goes up. The question is whether or not the revenue from a share will make up the drop in value. That is hard to predict, but the answer is most likely "no" at the current price unless conditions change drastically over the next few months.
3. People that don't understand #1 and #2 lift the price occasionally, but ultimately they lose their money to the people that do understand #1 and #2.
Also, bitcoinwisdom (and cex.io) only show prices for the last 30 days. Take a look at the complete range to get the real story: https://cryptfolio.com/historical?days=year&id=cexio_btcghs_daily
The profitability of GH/s purchased on cex.io is based on how much you pay for it.
If you pay a low enough price for GH/s on cex then over the long run you will earn more BTC then what you paid for them. If you pay too high of a price then you will incur a loss.
The problem is that the price has consistently been above what the GH/s are worth, and the price has not adjusted appropriately to the increases of difficulty.
It is also possible to sell GH/s at a price that is above the "market" price on venues such as ebay and craigslist.
If you pay a low enough price for GH/s on cex then over the long run you will earn more BTC then what you paid for them. If you pay too high of a price then you will incur a loss.
The problem is that the price has consistently been above what the GH/s are worth, and the price has not adjusted appropriately to the increases of difficulty.
It is also possible to sell GH/s at a price that is above the "market" price on venues such as ebay and craigslist.
Yeah the price is really out of whack with most cloud mining services. This one is a bit more than most.
The profitability of GH/s purchased on cex.io is based on how much you pay for it.
If you pay a low enough price for GH/s on cex then over the long run you will earn more BTC then what you paid for them. If you pay too high of a price then you will incur a loss.
The problem is that the price has consistently been above what the GH/s are worth, and the price has not adjusted appropriately to the increases of difficulty.
It is also possible to sell GH/s at a price that is above the "market" price on venues such as ebay and craigslist.
If you pay a low enough price for GH/s on cex then over the long run you will earn more BTC then what you paid for them. If you pay too high of a price then you will incur a loss.
The problem is that the price has consistently been above what the GH/s are worth, and the price has not adjusted appropriately to the increases of difficulty.
It is also possible to sell GH/s at a price that is above the "market" price on venues such as ebay and craigslist.
"not a profitable investment"
That depends on WHEN you trade and to WHO for WHAT price.
Some people defensively made a profit there, buying the Ghz cheap and selling them expensive and in the mean time making profit from the BTC they mine. Right now it might not me a good time to buy Ghz there, but if one were holding Ghz it might be a good to sell them to some fool who pays overprice for it.
In the end someone will make a profit and someone will make a lose. Not to strange.
That depends on WHEN you trade and to WHO for WHAT price.
Some people defensively made a profit there, buying the Ghz cheap and selling them expensive and in the mean time making profit from the BTC they mine. Right now it might not me a good time to buy Ghz there, but if one were holding Ghz it might be a good to sell them to some fool who pays overprice for it.
In the end someone will make a profit and someone will make a lose. Not to strange.
You are just relying on the greater fool theory.
If CEX GHs aren't profitable, then eventually you will run out of fools to trade yours to.
And this is important: nobody realize that CEX GHs will not be in profit ever. Everybody thinks that cex.io is an "investment for the future", or "they're like stocks", or "it will give me bitcoins ever". The count of BTC given by any mining hardware is finite, and one CEX GH costs more than it could mine ever. If CEX GHs aren't profitable, then eventually you will run out of fools to trade yours to.
The article headline is very negative biased. In the article itself it discusses the ability to trade the GHS and that is an advantage CEX has over other cloud miners. Just sitting on cloud hashing won't yield a decent enough profit regardless of wjo the provider is, same as just sitting on cash in the bank won't. I've only just tried it out myself, but can see how the mining and trading combnination works very well. .https://bitcointalk.org/index.php?topic=317001.msg6726473#msg6726473
You are just relying on the greater fool theory.
If CEX GHs aren't profitable, then eventually you will run out of fools to trade yours to.
Forget about fees. Cex.io is unprofitable anyway.
https://bitcointalksearch.org/topic/what-every-miner-should-know-about-570396
https://bitcointalksearch.org/topic/what-every-miner-should-know-about-570396
Bitcoin cloud mining services provide hashing power in exchange for Bitcoin. Cex.io is perhaps the biggest and most popular Bitcoin cloud mining service. You can buy 1 GH/s of mining power for 0.0071 Bitcoin
Unfortunately, cex.io charges 0.007 BTC per year per GH/s as a maintenance fee. That is about what 1 GH/s will mine in a year!
Profit/loss per 1 GH/s over the next year:
| Mining revenue | +0.007 |
| Cost | -0.0071 |
| Maintenance fee | -0.007 |
| Profit/loss | -0.0071 |
This.
In the past, cex shows the maintenance fee both in USD and as a % of mining revenue.
But now, the % is becoming so high that cex decided to hide it from customers lol.
Cex.io: the largest Bitcoin cloud mining service, not a profitable investment - an article by The Cryptocurrency Times http://www.usacryptocoins.com/thecryptocurrencytimes/uncategorized/cex-io-the-largest-bitcoin-cloud-mining-service/
Seems is like just one big scam to me, I kinda figured unless you buy more then 3 TH you really wont make profit the ones that are in the game are the ones who been mining and with half there profits they keep investiing into more hashing power, thats the only strategy is that I see thats how senior miners been doing it for a while have done it.
The article headline is very negative biased. In the article itself it discusses the ability to trade the GHS and that is an advantage CEX has over other cloud miners. Just sitting on cloud hashing won't yield a decent enough profit regardless of wjo the provider is, same as just sitting on cash in the bank won't. I've only just tried it out myself, but can see how the mining and trading combnination works very well. .https://bitcointalk.org/index.php?topic=317001.msg6726473#msg6726473
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