Topic: [Not] Good price at CEX.io - page 11. (Read 49080 times)

Yes, it is that simple...
Rent the hardware at less than 50% ROI, you will not recover your 'rental' costs by selling the GHs that by that time have systemically fallen in price. Which it does every week, despite the harsh manipulation occuring daily in the cex.io 'market' to keep prices beyond 200% of their true value.

And that's exactly what you're missing out in your calculation, your BTC and (if reinvested) your rented GHs is nominally rising of course, but falling in value faster than that.
It's best compared to investing Dollars @ interest at a bank, and making 2% interest while experiencing a 4% inflation - that's how you lose money despite rising nominal numbers that may make you feel good.

Selling out completely before any significant price drop (natural or manipulated) is paramount, and we both know that is impossible to achieve every single time (which if you fail one single time, your investment goes the road of everything cex.io and mining power - it loses value).
If you were able to do that - you'd not be trading @ cex.io but at Wall Street and be a multi-millionaire by now.

A typical comparison between average own hardware and cex.io, is that your total investment with own hardware may or may not achieve ROI (depending on purchase price, BTC valuation development, diff and resale price).
Cex.io is different, as it guarantees you loss of investment (about 40-50% without trading and depending on time held onto rented GHs).
As a rule of thumb - the longer you rent&hold GHs @ cex.io, the more money you will lose of that rent investment.

If you were to re-invest everything you mine at cex.io indefinitely, you total net value would eventually approach near Zero - despite owning thousands of near-worthless GHs with them. This is how their game works.

Then you're day-trading GHs. Which is all fine and good, but let's be clear about the nature of day trading: every time you win, someone else loses. Since the trend in GHs price is clearly downward, this leads us to one inescapable conclusion: On the whole, more people will lose than will win.

I do make a profit by using cex.io. It is not difficult at all.
I think you must be talking about the fools that hate without a single idea of what they are talking about, or maybe you tried and lost so now you are sure nobody can make any money.
If cex.io is better than buying the hardware (yes, you would have to be retarded to buy old tech at this time), then there really is no future for any hardware, old or new.

In short, I am not lying when I say I make a profit there. I am not stupid, and I would not keep using their service if I was making a loss.
I am also not a gifted pro trader, or bot.

The whole thing is very simple, rent the hardware, mine, make profit. You recover your 'rental' cost by selling the GH/s you rented. Maybe this is the 'gifted' part you were referring to. I guess I must be gifted as I am able to sell when I see the price falling.

For the future, I do see BTC price increasing. Certainly the difficulty will sky-rocket when the next gen hardware pops out. It will also drop the cex.io cost per GH/s (or any other cloud hashing service).

To keep things short :
When you do tell people you ARE making money at cex.io, all you're saying is either :
a) you are lying
or
b) you completely suck at math...
or (unlikely)
c) you are a luck-gifted pro trader, countering your losses by bot-/daytrading, which everyone knows is the only slim chance to actually profit mining w/ rented GHs @ cex.io

If you buy an Antminer USB, you know you won't make profit unless BTC conversion price skyrockets at some time...
If you buy an Antminer S1 180GHs for £4800 today, you'd be seriously retarded. That's not what the device is sold for today.

So by your "logic", cex.io GHs is cheaper than these deals (lol, that's easy) and won't make you a 70-80% loss, but only a ~40-50% loss.
Wow, great deal !
Could cex.io make more money by keeping the hashing power for themselves?.... certainly not. Fools that rent those in large amounts (severely math challenged or paid shills that just claim so) far more than double cex.io profits.
It's okay not got do it for max. profits, but you're advertising a pretty solid, guaranteed loss. That's what the fools are needed for, they got to pay so that others can maximize profit (i.e. cex.io)...

IMHO, the best compromise I could imagine concerning a statement about mining profitability is :
Don't do it, unless you're only in it for the learning experience and accept solid losses doing so (unless you're willing to bet on 10000$+ preorders on highend gear to be profitable in the future).
If you want to have a chance to break even, buy BTC directly instead and hope for conversion price increases in the future!

This.

It seems that haters will always hate. Even when you tell them you ARE making a profit from cex.io.

Lets try looking at the REAL cost per GH/s. I live in the UK, so it will be in £, but you can convert to $ easily if you want. Here is a quick comparison with hardware that I can actually order for shipment today.
If I buy an Antminer USB, it will cost me approx. £60 for 2GH/s....that is £30 per GH/s.
EDIT: Antminer S1 is about £4800 for 180 GH/s...so about £27 per GH/s.
If I buy 1 GH/s from cex.io it will cost 0.045 BTC, BTC is currently £560....so that is £25 per GH/s.
This is not a conclusive list, there are better deals. This was just the first single miner I found that I could actually get.

So per GH/s cex is cheaper and I get to mine instantly. Hardware will devalue with difficulty increases too.

Once I am done mining with cex, I can easily sell the hardware I leased...hopefully for the same or more than I paid for it. The current price has been roughly stable for the past few weeks.

If I had been lucky enough to get 1st batch on a KNC miner or had the buying power to bulk buy like cex have, I would without doubt get a much better price per GH/s, but I could not.
I could buy in to the current tech, but would certainly not get a return on that investment. Even the next gen is looking poor when predicted.

Could cex make more money buy keeping the hashing power for themselves...certainly. However it would be a lot more difficult to get financial backing for such a business plan. All hardware manufacturers would also earn more by keeping their hardware. If your argument is purely based in the max profit assumptions, then you should not bother buying hardware either.

There is another factor, some of us enjoy being part of bitcoin and mining. We are not here for max profit, just some profit will suffice

Diff goes up, cex ghs price goes down. Not as much as I'd like, but their prices beat the ass off of preorders that take forever / never arrive.

Plus the Ghs at cex being liquid makes them instantly tradeable on the highs and lows, which is harder to do with actual mining hardware. Ain't no other circumstance where you can spend a mining reward on Ghs as soon as you get it, and that time saved = lesser losses.

The exact same price that would be break even for you, plus or minus the price of electricity for me.

What price point would be break-even for you?

At that price and the current difficulty, I'd be on the losing end of that deal. So what's my incentive for doing so?

You should sell me some GHs for 0.001btc and then laugh at how dumb I am then.

Agreed, though this particular factor is largely predictable (at least in the short term).


That might in fact be the case, but (again, assuming profit were the sole motivation) this doesn't change the equitability of the transaction. It's still lopsided, no matter how much electricity costs for the renter.


Again, this doesn't change the equitability. A loss is still a loss.


Nope. Still doesn't change the equitability. If I give you 1BTC and get back 0.5BTC, it's still a loss.


That's just it -- there aren't. Fundamentally, if everything being exchanged is fungible, the only equitable solution is a 1:1 exchange, at which point it becomes pointless. If I pay you five oranges in exchange for three identical oranges, I've been screwed. If I pay you six oranges in exchange for 10 identical oranges, you've been screwed.

If the fee and the goods are of the same thing, any transaction between them is essentially pointless.

Obviously cex.io is ridiculous. However you make assumptions in the second part as if  the parties involved can see the future. A miner selling GH to a real market would be hedging his outlay against a horrible rise in difficulty. He sacrifices potential profit to guarantee a return he can live with. There are other ways to hedge  with futures and options, but the market is illiquid and reliant on 3rd parties.
If a buyer lived somewhere where electricity rates were ludacris, buying GH would be his only option to mine. Maybe he lacks the technical skills to operate a miner. Or he cannot acquire and build a miner in a time-frame quick enough to satisfy his predictions of coming difficulty increases. There are lots of incentives for buyers and sellers of GH to arrive at a fair price for both.

And that right there is why renting GHs is an intractable problem. Nobody* would pay more per month than each GH can mine, and nobody who owned the hardware would rent it out for less than they could mine with it themselves. Fundamentally, there isn't a way to make the transaction equitable for both parties.



* Clearly, people are still buying GHs at cex.io, despite this fundamental and insurmountable flaw. One can only conclude (assuming all parties are driven by profit alone) that one party to the transaction is being unilaterally screwed by the other. You can decide for yourselves which is which.

Hm, I've read several postings in this Forum that state they are a scam... So beware.

I sold everything from my CEX account because after about a month I figured out that is really wasn't worth it and I was actually losing money.  I did find another service with bitcominers.com for cloud mining and they had some really reasonable rates.  I am giving them a try......I should be mining with them in a couple days. 

In the mean time.........I hopefully will have my own mining machine running here soon.  Cloud mining was the best alternative to get me started without having equipment.  Bitcominers seemed to be one of the only companies that seems reputable and legit that I have found to do cloud hashing.

Anyways......hope that helps!  Happy Mining!!$$

Ken

You wouldn't rent it for that price. You would rent it for less than 1 BTC, say 0.5 BTC.
Now let's say you spent 3 BTC buying the hardware, and running costs for 6 months. You break even on your purchase. You have the hardware, and someone else is making money for you...in exchange you split half the profit with them.

Going by this calculation even the next gen miners will be useless by July 2014, and they only start to sell from April. Not much hope for anyone thinking of buying an X1 from Black Arrow for example.
If you try 1TH/s you get a similar profit forecast.
If this is true, then almost everyone will stop mining in the next 6 months. Let's just see if that happens.

As for Cex.io and not being able to make a profit....I am making one, although very slowly.

Assumption

In Jul 2014 the cost of maintenance will be the same: I think youre wrong
You cant sell from now to jul 2014: I think you are wrong too

Because they would get more bang for the GHS renting rather than using themselves?

I know cex is quite expensive but if you think about it, it is the cheapest GHS that you can buy that will mine for you straight away and it gives you a chance to actively trade it to try to make more porfit

Just my observation, still green to all this stuff.