Have you calculated reinvesting the dividends? Like on Cryptsy, you can buy fractions of a mining share.
So what if you reinvested the payouts on a weekly basis?
Theoretically you'd get exponential growth. Perhaps this would work? Could you do the math on something like this?
That would probably fix it.
The problem is: you will never then have BTC, you will only have GHs until the end of times.
Let's say you buy 1000 GHs.
These 1000 GHs after the first month give you 0.799 BTC.
You buy 0.799 of GHs (no matter how much it is).
Now you have 1000 GHs that will never catch up the investment, AND 0.799 of GHs that will never catch up the investment
I just trashed 150 Euro like an idiot, I can admit it.
But I wonder all those people in there with thousands of GHs... how comes they didn't make the count before buying so much of it?
I am not familiar with the service you are using, but on Cryptsy you can trade your mining shares back to BTC at any given time. So eventually, if you reinvest the dividends your 1 share will be 2, then 4, then 16, then 256. Or probably less because of the increase in mining difficulty.
But eventually, you could cash in these shares for BTC.
I calculated that if you reinvested the dividends on a weekly basis, after a few years you'd be generating like 1 BTC per day. Of course, this doesn't take into account the increase in difficulty, the decrease in share values, and of course the risk that Cryptsy gets Goxxed.
So as intrigued as I have been about mining, my experiences have only lost me BTC. The good news is that after a year I'll get my principal back, so it shouldn't be a loss...but I ain't gonna get ri
BTCh
But watch: if you cash back your BTC, somebody else is losing.
So, while you CAN do something by TRADING, you can't do anything by mining.
It's just another asset you are trading, but in general that asset value is nothing.
The only real winner is the cloud mining service.
That makes no sense. The assets that you've accrued are directly related to mining. Without the mining dividends being reinvested, you have no value beyond the principal.
So while cloud mining may not be great, your premise is flawed.
Let's say you pay 100 $ for 100 GHs for 5 years.
In the first year you recover 90 $ with those 100 GHs, and at the end of the 5 years you get up to... uh, well, 95 $, because after the first year the mining income becomes so small it's nearly nothing, thanks to the steady increase of difficulty of the mining process.
Let's say that after the first year you reinvest those 90 $ and buy 90 GHs (it doesn't matter if you do that month by month or week by week, the mechanism is PERFECTLY THE SAME).
After 5 years you still didn't get those 90 $ back. You will be at 86 $ or something. This because, again, mining difficulty increases and you don't reach what you invested.
And let's say that after the second year you reinvest that income of 86$ into 86 GHs.
At the end of the first year of this last investment you get back 80$, STILL LESS THAN THOSE 86$ YOU INVESTED. And after 5 years you will again get less than what you invested.
The result is: you will always have more and more GHs and never get back more BTC than what you invested.
It doesn't matter if you reinvest the BTC you earn from mining or you invest more BTC thanks to grandma paycheck for your birthday: they are BTC, and the GHs you buy with them does not give you back more BTC than what you put in.
But you are actually investing in GHs to get back more BTC than what you invest, right?
Now, I put here a couple examples, then that's all.
You can now buy 1 GHs on CEX.IO for 0.0068 BTC.
This is what you get back after one year (LOL):
https://tradeblock.com/mining/a/6c9fc98920CEX.IO has artificially pumped prices imho, and the only successful people in there are successful because they trade. But even then, there are commissions when you buy GHs or sell for BTC...
PBMining is much better: you can buy 1 GHs for 0.003 BTC at the moment.
This is what you get back after one year:
https://tradeblock.com/mining/a/609bf460dc0.01 BTC. Well, at least you are in active by a measure (if difficulty doesn't get another strange jump).
At this point the only thing you can dispute is the difficulty increase I have put in there.
But look, I didn't invent it, there is
DATA about it, and the trend is not changing.
It has been an average of 18% on each step of 12 days in the past and this last step jumped to 25%.
DATA.
Now, you can HOPE the increase in difficulty will be less and everybody will get more BTC, but... that's just... hope.
Statistical data suggest otherwise.
Now, you can either understand this or you can't.
I warned you the way is possible to me to do so, I can't imagine a better way to explain what goes on, and I can't fight (and I don't want) people that WANT to believe something.
It's not even my right, or my duty.
I just talk about this because I feel I do good to people and, in last analysis, to Bitcoin.
I hope this can help you.
Let's assume for a second that your math is correct. CEX is still a much better value than pbmining.
So that puts the total value at $170. Remember, yes, CEX charges a commision, but its 0.2% so if you were to sell $200 worth of ghs the commision is $0.40 and if you can't turn at least 40 cents worth of profit then you're doing it wrong. With PB mining, your math is actually about right since you can never get out of it what you put into it and at the end of your contract you can't just sell the GHS off to someone else, the GHS just disappears.
Personally, I buy hardware and use the proceeds to reinvest into cloudhashing at CEX, BECAUSE I can get it back out later. Essentially it becomes like a BTC savings account with a modest bit of interest. (I've also done some investing in BTCJam, but have also lost money a few times there as well)
a lesson to be learned i guess...