Topic: Did Viabtc fail to run the numbers? (Read 492 times)

there's actually a paper plane trick you can do past the boat that will identify if hashrates are being stolen.

I notice that there's about 60% stale shares on some asics and it feels as if that's the same thing.

I'm just saying there is no physical access to a physical miner for you to check that any hash is being stolen.

you can make money but so many things have to go right or they cancel the contract with the we can fuck you anytime we want to contract.

to actually turn a profit.

a) the diff cant sky rocket
b) the diff cant crash
c) the diff must be very flat for a very long time
d) coin price cant sky rocket
e) coin price cant crash
f) coin price must be very flat for a long time.
g) you must hodl the btc they send to you
h) right near contract end or right after contract end btc must shot up in price.

that is asking for a lot to go right.

other ways are very even and slow price rise along with very even diff rise. pretty much in perfect synchronization so that the cloud company sees no need to cancel.

all of the above are unlikely most cloud contracts get cancelled with the fuck you clause.

I wasn't aware of that until stompix mentioned it here

Is it irrelevant right now? well, not if you consider it as a general discussion which applies to all other cloud mining services, really the question is (did they stop because their gears were shut down?) or ( because they knew a huge difficulty drop was coming and they would be in deep shit), based on all the facts mentioned above, I can't help but think it's the latter.

Seriously this is such an easy and very profitable business, if you own a mining pool, sell imaginary contracts, once the promised hashrate starts to produce more BTC than you thought possible, terminate the contracts, if the difficulty keeps going up, you are GUARANTEED to make a profit, as easy as it gets.

Once you terminate the contract, if BTC price has gone up since then, compensate the buyers with the same USD value they paid, if BTC price drops, just send them back the equivalent amount of BTC they paid, I am not aware of any other way to make money easier than this risk-free so-called cloud mining.


Even if they don't really own any of those cloud mining companies, I am pretty sure once the difficulty issues settle down, they will come back with the same contracts again, given how easy it is to profit from this kind of scheme, which is shady at it's best.

This isn't something against Viabtc in particular, this whole thing is just to show you guys that buying a mining contract is almost a guarantee to lose money, I see many people waste thousands of dollars on these contracts only to end up losing money without having a single chance of making money.

maybe but they will link you to a cloud mining company

https://www.viabtc.com/companies

and claim they do not 'really' have a connection

Pay attention to what miners? Why would they give you access to something that a) probably doesn't exist and b) doesn't need your intervention.

Anyway the entire topic is a moot point isn't it seeing as ViaBTC stopped all their cloud mining in June.

You guys do realize they have the we can cancel at anytime clause.

They are still ahead of the game as I type and you can bet dollars to donuts 🍩 that if it looks shitty for them in six or nine months time they will cancel.

Also they have gone into agreements with bitmain so they could simply have
L7
E10
S19

and they do arbitrage .

Ie you buy a btc contract it is earning 30 dollars for 3400 watts

they fire up an L7 it earns 150 dollars for 3400 watts

all they need is to sell eth ltc/doge btc contracts and juggle the excess gear that is provided to them by bitmain.

so both factors above should be able to wipe their butts clean of the shit.

Time to start monitoring the stratum template in some more detail I guess?

If they "steal" users hashrate and rent it out via a proxy surly someone would notice this if they are paying attention to their miners?

Very interesting topic and great breakdown mikey!

I see some directions:

1. If ViaBTC steals some 0.1% of its users' hash rate it may not be that much noticeable. That's more than 16 PH they can resell. And the percents can be adjusted (I don't know at what level it becomes visible).
2. Bitcoin price may actually go over the roof at some point. But I don't think that ViaBTC business model is price speculation.
3. ViaBTC may use that money from contracts for something else - investments, price manipulation, I don't know -, and may be earning enough to cover the potential loses?

I don't say that any of these is for real; all I say that there are other possible options too aside of "Viabtc could be in some deep shit".
Of course, like with any speculation, time will tell.

I have always thought some cloud mining companies don't really own any mining gears, Viabtc being one of them since they FORCE you to point the contract hashrate to their OWN pool only, which likely suggests that they do NOT own any mining gear.

My first impression was that they would collect x amount in USD from you, pay it back in pieces every day after artificially displaying a certain hashrate on your account which comes from nowhere and does not exist in the first place, and since they will pay you in PPS, they can somehow know in advance the amount of BTC they will have you pay you, and since difficulty only goes up, they can somehow easily estimate the total earnings for x hashrate for a whole year, charge you 20-30% on top of that for-profit and some margin, buy BTC in advance, and slowly send you payouts.

Example:

100th mines 0.1 BTC in 1 month, they can assume that difficulty will cause that to drop 5% every month, so the total they will ever have to pay you for that imaginary 100th would be 0.92BTC, say the that current bitcoin price is $10,000, they will charge you $12,000, they take those 12k and buy 1.2 BTC

If difficulty does increase 5% every month, they will pay you .92BTC and keep 0.28BTC,  the worst-case scenario they will have to face is probably an average difficulty increase of 0% throughout the contract period which means, they earn nothing and lose nothing.

While that seems like a great plan, they will still face some risks if the difficulty drops, probably that's why they force you to get a 3-year contract since its extremely unlikely for the average difficulty in the 3 years period to be lower than the first month, and since most folks don't know how to run the numbers, they will assume that price will go up every day and that the 12k they paid will net them 20k or something, at least this is what the online calculators will tell them.

I gave it a second thought, maybe I am not being fair to them, maybe they do have the mining gears, but then I saw this on their website.



Ignoring the fact that these two claims contradict one another (if doesn't count on the facilities, there is no malfunction risks of any kind), but it does say out loud that

Which if you add it to the point above which clearly states


Strongly suggests that there is no real hashrate involved here, it's just some imaginary figures that appear on the buyer's dashboard showing they have x amount of hashrate.

Also the fact that there is no single report from those contract owners about any hashrate drop despite the fact that 50% of the world's hashrate was wiped out, Viabtc "alleged" mining gears can't be mining in a vacuum, if they did have real gears, these contracts would have been affected, honestly, at this point, I don't have the slightest doubt about my theory.

I also believe that Viabtc could be in deep shit.

Let's evaluate one of their mining contracts just for fun:


100th will cost $4,600*6% =4,876 + $5,831 ( for Electricity) = 9.51 $ per day in total

When this contract first started Bitcoin was trading at 19.2k and the difficulty was at 19.1T, those 100th earned 12.2$ a day back then, the problem here is that Viabtc didn't forsee the China ban, and difficulty has not been doing them a favour, below the summary of difficulty throught the period of the contract.




The average difficulty is 19.5T, which means they pay on average 0.0006267BTC per day for that 100th contract, if they did buy bitcoin with the money they got in advance it means they bought at 19.2k, which is 0.55 BTC, if we divide that by the number of days passed since then (301), they have already paid (0.189BTC) and have a balance remaining of 0.361BTC, which at the average difficulty of 19.5 can suffice 576 more days, while the contract ends in 824 days.

For Viabtc to breakeven, they will need an average difficulty of 27.9T for the remaining 824 days, anything above that is profit.

At first glance, this seems like a great business model, since difficulty can only go up, but with the China ban, I think Viabtc could be in some deep shit, they will need AT least an average of 2.9% increase in difficulty every month for the remaining 27 months just to breakeven.

With the halving being a few months away from the end date of these contracts, the Chinese are not relocating fast enough, chips shortage isn't over, BTC price isn't mooning, it's no more an easy win-win for Viabtc, while I do believe difficulty will only go up from here, I am not sure it will keep hitting a 2.9% every month, especially not if the bear market bring us crashing in 2022 or 2023.