With all due respect to Guy, this will never work for a simple reason that there is absolutely NO incentive to EVER use mining contracts vs buying bitcoin outright (in OECD countries). With the price of bitcoin approaching the cost of production for marginal players, all profit of such contract will be retained by the cloud mining company. I looked at every single cloud mining operation, and basically it is just a license to lose money (for buyers of such contracts, of course).
In theory, cloud mining has to prove that buying such mining contract will result in the GUARANTEED lower price per BTC acquired than could be obtained by buying bitcoin on the open market. However, such proof does not exist at the moment and is unlikely to exist in the future as well. Case closed.
People say the exact same thing about buying miners and have been saying it since GPU mining. Cloud miners have lower up front costs involved due to not needing to ship all around the world and they generally have cheap electricity decreasing running costs. In that scenario, if cloud mining is unprofitable, then buying miners is even less profitable for the majority of people.
Cloud mining will attract a different breed of people than mining with physical hardware. Cloud miners will be less hardcore and more likely to jump ship at the first whiff of unprofitability. They would probably have no notion of the concept behind p2pool and would have no qualms about pointing their hashes at the most profitable pool even if it were the largest pool with over 51% of the overall hashrate.
While I agree with you about cloud mining and I think it is bad for the industry it looks like it is the same as the weather .
We can talk about it as much as we want but we can't change it.
I don't see anyone refuting my point that cloud mining (as is) cannot provide any advantage over simply slowly buying BTC.
Mining is fun at home, much less fun at a hosting site or colo and completely meaningless in a "cloud mine"-it does not reward either your soul or your pocket.
at this point, i probably agree with you, however, to speculate, -
what if SP-Tech came along with a cloud mining plan which was not only profitable, for the investor, but fulfilled those fun hobby-type requirements that we all have when we first plug in a new miner? What form would that take? Or is that something which you might just not see, for yourself, happening?
Would it be a hosting plan on purchased hardware that you watch hashing on a webcam live-feed - if you could trade h/w (instead of trading TH/s - you could trade the actual hashboards) with other users? i'm just rolling my head around and letting out the thoughts now. lol.
here's my picture of a perfect cloud mining contract:
The purchasing (hire-purchase perhaps?) of full hashboards, instead of piddly little GH/s.
Flexibility to change pools remotely, at the click of a button.
live-feed webcams watching over a warehouse of immersion cooled SP100's (i just made that up)
trading platform with other cloud users, to control pricing and p2p trading of your purchased hashboards.
Fees paid pro-rata by the user, not taken from mined rewards - if fees don't get paid, hashboards power down.
and most importantly - majority of the mining profit to the end user.
i think too much, granted. but some of these ideas are, for me, what might make a perfect cloud mining contract - in essence, i would still want to own the hardware, rather than rent TH/s.
- you might need to update FW twice (till it says that you have the latest image).
