Topic: Cloud Mining vs. Hosted Mining (Read 1004 times)

What is the difference between cloud mining and hosting mining in terms of gains?

Hosting own miner at home have own difficulties like high electricity cost or there will be not enough space with good air condition to operate bitcoin miner.

Yes you got good point, hosted miner give option to choose pools so that you can actually deviate your hashing power to some profitable altcoin which is not possible in cloud mining and you have to suffer to get back what you have invested. Also the amount of mining power those cloud mining sell is not the real mining capacity they have.

But i really don't like to invest in any of both cloud or hosted mining because purchasing bitcoin directly with the fiat you have will be profitable rather than waiting for several months or years to get back your initial investment.

Agreed - though most households simply don't have the right conditions. The wiring is not designed to handle energy-thirsty hashing hardware, and buildings not optimized for heat dissipation, not to mention the noise and heat if you intends to scale. Also, you have to take into consideration the shipping time and cost if you are not in the same country as the manufacturer.

The two models that I meant to compare share are similar in that is in both cases you are required to trust third party operators to various extent. Home mining, while desirable, is not within the scope of discussion.

You better run your own miner at home if you enough money to build it than investing money on a cloud mining.
If you do hosted mining, you know the risk and you can fix it. But if you do cloud mining, you know the risk but you can't do anything.

This is not obvious to me - do you care to elaborate?

->Accepting low investments with high yielding fake promises.
->A centralized hub for verifying their hash rates and the community support obviously.
->People tend to trust a third party which operates as a registered company over an individual with no funds to back them up.

Those who are involved in cloud mining are mostly newbies who don't know about how to set up real mining hardware and also don't know how mining pools works. Most of the time cloud mining use different ways to lure new people into bitcoin mining showing how bitcoin price has got sky rocketed in last few years and the early miners of bitcoin are now millionaires.

I also think hosted mining could be more reliable than cloud mining but there is still risk of losing your mining hardware if the owner of mining farm run away with your mining devices and it will be hard to file police complain against him even you know full detail about him.

hosted mining or self mining still is good, still above is compare cloud mining
because self mining the real mining you can get coin is from real mining
cloud mining you don't know if cloud mining this real mining or not, you only can get picture in promote cloud mining site
you never see this real mining or not, and majority cloud mining not real mining only ponzy scheme

Thanks for the kind words.

Yes I did create SinoHash and built a moderate-sized mining farm as part of it - thanks to a friend that I was lucky to meet during my previous job.

I suppose marketing was part of the motivation behind creating the topic, but I also did it out of spite and maybe bitterness from my observation that this in space only two types of people seem to be around long enough in this space - scammers and suckers - predatory service providers target greedy and often ignorant investors with unrealistic expectations. If you want to present to your prospects with a coolheaded balanced analysis of mining, chances are you wouldn't get any business.
Speaking of strengths, I dont think I have any ostensible advantages over larger Chinese mining firms in terms of cost  - while the electricity prices I pay is fairly low, so are theirs.
I may have lower costs than Western miners - being located in China afford you the advantage of cheaper hardware and faster deployment. It is incredibly cheap to build mining farms here and perhaps cheaper to operate them.
If there is any advantage over other Chinese firms, that would be that I intend to keep this venture as small as possible - I don't hire developers, I use off-the-shelf e-commerce solutions and third-party pools, I don't have any ambition to do things for prestige - why not launching this or we are world's first that.
I however do see there are advantages inherent of my model as opposed to the ohters, not advantageous to me as a businessman, but advantageous to the customers.
First, most cloudmining contracts' value hit zero the moment you reach breakeven point - but with hosted mining, you can sell your hardware which has diminished in value but not worthless or if you are confident price will bounce back, you can mine at a controlled loss.
Second, I can't run a ponzi by paying old users with new users' money. Users own the hardware and have verifiable hashrate - if something goes wrong, you have me to be held accountable.
But the downside is that I don't promise you positive return, it is all up to the market.
Third, you are dealing with a real person, not a faceless company.
Right now I have less than ten clients, one of them hosted 100 S9s - I may get another 10 and that's it - done. I only have 1 megawatt to rent. Right now I reply everyone' email and we build friendship out of business relationship. Some suggested that I rip people off by charging them 10USD for 24 hour S9 trial, but the only person paid for it, I give him 36 hours - he mined more coins than what he could have paid for with the 10 dollars.
I am now charging RMB 0.3 per kWh. I pay a flat rate so I can charge a flat rate. I may or may not be able to find a cheaper place for summer. So for now, all I can promise is RMB 0.3 per kWh.
In response to your concern over repair cost - Again, being in China, you can repair your miner cheaply. You can send your miner to Bitmain's Shenzhen address and usually Bitmain would repair it free of charge. But do you think a cloudmining service magiclly have all their miners never breaking down? They just socialized the loss of indiviudal miners to make it less visible.
The USD price is 0.045 per kWh and you can pay in BTC, Paypal or Bank - the last two less recommended.

It's nice to see you, Eric.
You have done an excellent job for HaoBTC. Many people use their service.

I see that you created your own business? Sinohash is your child?
You have great confidence of many members of this forum. I will read your offer.
Since the topic is actually marketing, tell me what are your strengths. Say something you will not find yet on the page please.

As I see there are some disadvantages. The customer pays for the repair of equipment. And as we know s9 breaks down often. That is why many people choose hash or Pacmic in hashnest. Skipping profitability.
What are the prices in the winter and in the summer? Summer price probably is not on the page? I found only winter price in RMB. It might be worthwhile to set the price at $? And of course How can I pay? BTC, Paypal, Bank etc?

Simple they only have to invest with those ponzi cloud mining site(there would be no liable cause on the hand of cloud mining company and the investors when it comes to legality)

"they can sell whatever amount of hashrate that they claim they have, and investors have no reliable ways to verify"- this is also the main reason why there were a lot of new investors who get hook up because of the very promising rates that they are trying to promote.

The hosted mining I was referring to has more to do with the product than scale - you can run a large datacenter farm and sell a service to investors by allowing them to send their own miners and charge a hosting fee based on the amount of electricity their miners consume (the non-electricity cost will also be converted into fiat value per kWh ). In comparison, a cloud mining service typically sell shares or hashrate, which are abstract and they can easily sell more than what they hold.

Cloud mining usually promises the investors a high return on investments and that is enough to attract them. Those legit cloud mining companies have warehouse and datacenters to manage the miners. This makes it significantly cheaper as compared to those miners that are hosted at home and they wouldn't be able to get any discounts on the miners or the electricity.

The advertising for cloudmining companies plays a huge part too. "Hosted" mining is much more expensive. Either way, if you're buying hashpower, you would probably either not profit or get scammed.

I recently built my own mining farm and decided to make it available for hosting. To me, the problem with cloud mining is quite clear -  they can sell whatever amount of hashrate that they claim they have, and investors have no reliable ways to verify. Hosted mining is much easier to hold accountable in this regard as users are able to see the status of each individual miner through a third party mining pool. It is just beyond me why people still go to these cloud mining services to purchase these "contracts", shares or hashrates or whatnots. Are there any benefits that I am not aware of?