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Topic: Advice for new users regarding CLOUD MINING - page 24. (Read 44307 times)

member
Activity: 62
Merit: 10
Thank you for posting that DrG. I don't think I am new but I know there is a lot more I need to learn. I don't frequent this forum very much but I have enjoyed many of your posts.

I also wanted to address GAW/Zenminer. As a customer of theirs with 8 miners on "the ZenCloud" I am very satisfied with them. Even before the merge both have shown me they care very much about the customers. I have had a few bumps with them but they have stayed in constant contact with me and made every one of my issues right. In my book that counts for a lot. I been on this earth for a few years and I know "Stuff Happens" and it is how that stuff gets felt with that counts the most.

I would second your suggestion to read up on difficulty and the such. Find out all you can before you make a leap into the crypto realm. I am still trying to figure out how to ROI…LOL but once you get involved in this it is highly addictive. No visible chance to make my money back but I just can't stop playing around with these miners…LOL

I would also add once you take DrG's advice and educate your self….never and I mean NEVER invest more money then you are willing to loose. One day this all looks good and you gonna make some ching and 10 minutes later BTC went from $630 to $513 ( I just lost $200 BTW)…. Grin

@Bitsaurus …LOL I just read your snappy comebacks to the "shill posts"  Cheesy
full member
Activity: 153
Merit: 100
Mining in general is bad business, cloud mining is even worse as they charge you extra for service you can do yourself at high premium but low quality service.
DrG
legendary
Activity: 2086
Merit: 1035
For those of you who want proof to see how desperate these companies are, they literally pay people to come onto these boards and post spam supporting them.  Here are users I and others have identified as shill posters.  Click on the user profile and look at their post history.  If 1/2 their posts are promoting a company they are paid shills most likely.  When was the last time you went around telling people how awesome liquid plumber cleaned you pipers  Grin

drawer - new user and 3/4th of his posts are about his supported company
https://bitcointalksearch.org/topic/m.8309461

testerman - posted the same text in 7 different threads promoting PBMining
https://bitcointalksearch.org/topic/m.8331652
hero member
Activity: 873
Merit: 1007
Thank you for posting this.  If a new user can't be bothered to spend 10 minutes to read that then they have no business mining and should have their money taken away from them.  If the money is that easy to part with it must have been easy to acquire.

Cloud mining also centralizes the hashing power into the hands of companies rather than individual miners.  Most miners can't even dictate where they want to hash.  It's not good for crypto.   It's not good for the end user.  It's only good for the company.
DrG
legendary
Activity: 2086
Merit: 1035
        First off I will preface by saying that my only current holdings are BTC, LTC, Monero, USD and I am enrolled in Stunna's PrimeDice signature campaign.  I do not have any stake in any Bitcoin based business nor do I have any affiliation with any business other than my own medical practice.  I have a small GPU farm (residual of my previous monster) and 2 Antminer S3 B6 ASICs.

        A lot of users are coming onto these forums learning about Bitcoin and hearing about people making some money and possibly even becoming rich or filthy rich.  While I will not say the time to make $ in crytocurrency is over, the chance to make significant profits by mining is gone (at least for now).  Many new users who are not familiar with how to build computers let alone mine on them come to these forums looking to invest $ and get involved with the cryptocurrency "craze" - the biggest notable coin obviously being Bitcoin
      BTC.

      There are 3 basic ways to acquire BTC
      -Mine them using dedicated hardware known as ASICs (previously CPUs and video cards were used, now that is obsolete)
      -Buy virtual or cloud mining contracts with fiat (cash) and get a flow of BTC into your account/wallet for the defined contract length
      -Buy them in person via localbitcoins or on an exchange like BTCe, Bitstamp, Poloniex, Crytpsy etc
      -Work for them as you would with your regular job but receive payment in BTC as opposed to fiat like US Dollars - see the services section to look for job offers

      So ever since CEX.IO started offering virtual or cloud mining a lot of users have considered this option since they didn't have to deal with the noise, heat, electricity rewiring, fire risks, maintenance and general headache involved with actual mining.  Many of the more "veteran" bitcoiners like myself felt that these companies did nothing for the Bitcoin community other than enrich themselves and we were vehement about avoiding these companies.  After all, why would a company go through the trouble of setting up something that would generate passive profit and offer to give you some of that profit.  No company performs a service like that in the real world - only charities do.  The prices at CEX are also insanely priced relative to actual hardware ownership but supporters of CEX will argue that the profit to be made is from trading and not from the actual hashing you purchase.  To that I would rebutt that why would you risk adding a middleman if all you wanted to do was trade for more BTC - you might as well trade BTC for fiat on an established exchange.

      Well the discussion about whether or not cloud mining is good or not can go on and on - and it has valid points on both sides.  What I don't like to see is new users arriving on these forums looking to get involved with cryptocurrency only to have a bad experience and then end up thinking the cryptocurrency world is full of scammers and cheaters.  We do have thousands of scammers.  But we have over a million good hearted people who would be the kind of person to let you know you dropped your wallet in a store.  To that effect, I will warn new users to consider some things particular to cloud mining.  First, let me go over the risks of mining with real hardware so you can see why people considered cloud mining at first:

      With real hardware:
      1) You hope the company you order from is not a scam.  You hope you don't send them 5 BTC for a miner and then they just disappear.  Since BTC are NEVER reversible (unlike credit card payments) once you send your payment you are at the mercy of the receiver to send the coins back should you have a problem or want a refund.
      2) You hope you get the hardware when promised. This was a HUGE issue for miners (myself included).  BFL shipped my pre-order almost 13 months after I ordered it, about 10 months late.
      3) You hope the hardware, once it arrives meets specification.  It hashes at the right speed and uses the amount of power it said it would (or less preferably)
      4) You hope the hardware is reliable and doesn't die.  With mining, time is money - at the present time is more important than future time - especially when the mining difficulty increase (please read up about Bitcoin difficulty if you do not understand this)
      5) You hope you earn more with the miner than you paid - this should be obvious to be considered an investment.  Sadly this is where the majority of hardware manufacturers are failing their customers but with good reason - going back to why would somebody sell you something that could make profits for them?
      6) You hope that if the hardware does fail the company will RMA it quickly

      Now let's compare to cloud mining:
      1) Again you hope the company is not a scam.  You don't want to buy a 5 year contract and then have the company run away after collecting up-front contract income for 6 months.  In the crypto world unless you know the names and address of the actual company you are dealing with you will most likely never see your money again.
      2&3) Cloud miners typically will deliver exactly what they promised in terms of hasrate or people would get upset at the very first day and it would be bad for their image. You don't need to worry about specs and efficiency.
      4) Cloud mining does require the mining company to be able to reliably mine.  I haven't heard of these companies having significant down-time or server issues
      5) Just like with actual hardware no mining company has been shown to really be worth buying other than PBMining - and for that we have the issues below
      6) You are relying on the company to be in business and holding up their contract for the set duration.  Now consider your contracts with phone carriers, internet access, cable TV etc.  I don't know how it is in the rest of the world, but in the US these companies are notorious for changing the rules and changing your contract and secretly charging you more fees and trying to trick their customers with the full blessing of the US government (via FTC consent).  Now think about the crytocurrency world where many companies are anonymous and newly created - do you trust a company that has been around for 3 months to honor a 5 year contract?  If they go bankrupt who are you going to call?  Would you trust the 40 year roofing warranty from a 2 month old roofing shingle company?

      And that last point #6 is where the biggest issue with cloud mining resides.  Let's forget about whether you'll make money or not.  Let's forget about whether they restrict you to mining on certain pools (or even algorithms if you're mining alternative coins).  Let's assume you get a contract and you start getting income into your wallet.  You have to HOPE that the company stays in business and doesn't shut down for the life of the contract - especially since many of these companies do not allow you to transfer ownership of your contract.  You are trusting these cloud mining companies.  If the company showed me the management positions, pictures of these people, address where the business is headquartered (not necessarily where the mining is going on for security reasons) then perhaps I would be willing to trust these companies.  I run a business myself - I am incorporated in California as a physician and my information is clearly visible to the CA public.  These mining companies should at the very least show you their credentials before you invest with them.

      Gavin Anderson, one of the lead BTC developers recently echoed similar sentiments:
      http://cointelegraph.com/news/112329/gavin-andresens-fractional-reserve-mining-cloud-miners-respond

      Having said that, I will list some companies.  I am not endorsing any of these companies - just making a list for reference.  If a representative from the company would like me to amend statements or prove the company's validity please post in this thread or link to the official announcement thread.  The End User must do the due diligence and investigate the company before investing.

      CEX.IO
      • Considered the first cloud mining company and is a subsidiary/partner to Ghash.IO
      • Allows you to buy and sell your hashrate at any time - this is the only way to make any profit from this service.  You will lose money if you just buy hashing power.
      • Insanely overpriced (relative to physical hardware) https://bitcointalksearch.org/topic/cexio-ghs-bubble-661122
      • Your cloud hashing may at times even cost you money due to the insanely overpriced maintenance fees you will lose money during bad luck spells
      • 07-07-17 FOLLOW-UP - still around but most people have already left https://bitcointalksearch.org/topic/cexio-303947

      Megamine.com

      Finalhash.com
      • Added to list per Finalhash's request
      • They are incorporated in the  US state of Wyoming
      • Buying a contract appears to entail buying hardware which will be shipped to you at the end of the contract
      • 07-07-17 FOLLOW-UP - website is still up but CEO Marshall hasn't been online here since 2015... assume dead.

      GawMiner/Zenminer

      Genesis-mining

      Kryptologika

      NiceHash.com

      lunamine.com

      PBMining
      • Has undoubtedly the best prices in the cloud mining industry
      • Should be assumed to be a ponzi unless it can be demonstrated otherwise since their model is unsustainable.  I don't accuse people instant but the company has not provided any proof otherwise despite multiple claims of operating a ponzi.  They also have no evidence of an actual farm, no evidence that they are actually mining (can't show block generation).  They may show pictures, but I can stand in front of the Statue of Liberty and claims it's mine.
      • Will most likely end up disappearing like lunamine
      • 07-07-17 FOLLOW-UP - Confirmed Ponzi scam https://www.cloudminingdirectory.com/pbmining/review/

      If you have other major cloud hashing sites I should add please list them in the above format.[/list][/list][/list]
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