Topic: PB Mining -- 5 year mining contracts! - page 132. (Read 378920 times)

I think I know the secret!  
You piggyback on your neighbor's wifi for your internet connection, then you piggyback on an electrical post for electricity?

LOL! Just kidding!  

Where is the data center located?
===

ok found it. canada

Here is how I look at it.  If you go to https://tradeblock.com/mining/, the cheapest mining hardware available is made by Spondoolies-Tech and costs about 2.00USD per GH/s, plus one-time shipping, plus monthly electricity.  A pbmining.com contract can be purchased for ~1.71USD per GH/s, which includes all future fees.

I as a consumer cannot beat pbmining's price, so it makes sense to use their service, assuming one is willing to take on the risk that comes with bitcoin mining (i.e. difficulty can get out of control, thus reducing the chance one will ever break even).  Lately, difficulty increases have been mild, which is great news for us!

Yes, pbmining does seem too good to be true, but it could be possible for it to run profitably.  Perhaps the owner has a special deal to buy mining equipment at a reduced cost.  Perhaps a data center with solar power is used.  Perhaps the mining is outsourced to another company in an area with low electricity rates (or solar power) that offers volume purchase discounts.  Of course, a business is not going to give away its trade secrets, or other businesses might take advantage of that same business model.

Yes, there is a concern that 0.0029BTC is not enough money to fund the electricity for mining at 1GH/s for 5 years.  That's true if today's hardware is used for 5 years, but there will be a lot of advances over the next year.  For example, in April 2013, my Butterfly Labs Jalapeno cost $425, used 30 watts, and mined at ~5GH/s (actually it was a 7GH/s model, but it didn't mine as fast as promised).  That's 6 watts per GH.  Today there is mining equipment from a couple of vendors that use as little as 0.5 watts per GH.  Let's see what the future holds.

What if pbmining is using our money to make volume purchases of short-term mining contracts somewhere else?  After that first contract expires, subsequent contracts can be purchased for less, and so on.  For this hypothetical business model to be successful, the price per GH  and watts per GH must drop significantly over time, or they'll hit a financial crunch.  We're relying on pbmining to charge enough for our contracts up front to cover 5 years of future fees.  At least most of our investment comes back to us near the beginning of the contract, so we can rest easier every week.  Just don't put all of your eggs in one basket.

Why did you quote the site then.

+1.
I really like the concept. Can you tell me how much fees are you buying at the time of buying the contract? Is the fee per GHs or is the fee per xGHs?
Kindly,
       MZ

  We could have had fees when we started, but we decided to incorporate the costs into the purchase price instead.  This not only simplifies it for the customer but also doesn't surprise them down the road.  

 As for the question "How do they do this?"... well our business model is simply awesome that's how.  Plus we use the following special sauce:



 
(shhhh it's a secret!)

That's what making me think it isn't a legit mining group. or they maybe doing it for promoting BTC but it is very rare and not applicable with ~1 PH without a great donator but I couldn't see any of their post asking big donations.
Kindly,
       MZ

This could potentially happen. I do not know how they mitigate this risk. Perhaps they plan certain amounts of contingency time into their business model?

With this 5 year thing, is there any way it would become unprofitable to mine within the 5 years?  I guess not since there are no fees right?  How do they manage to keep this up with no fees, when expenses are probably changing all the time?

not after you decide to do mining in the cloud PBmining
then there will be a contract for 5 years, after 5 years of the contract will be completed
and for 5 years you will get the added benefit of capital

To put it in perspective, I was using bitminter.com to do merged mining with BTC and NMC.  The mining took place between April 2013 and July 2014.  Initially it was with a couple of GPUs, then with a 5GH/s Butterfly Labs Jalapeno (yeah, overall I lost $250 choosing to buy the Jalapeno).

I cashed out with ~0.98BTC and ~6.7NMC.  I converted the ~6.7NMC to ~0.02BTC.  In this case, merged mining might give you a ~2% boost, but it mainly depends on the value of the other coins that you mine.  NMC is currently 1.52USD a coin and XMR is 2.18USD, so you can expect XMR to give you a similar boost.

Also, when converting coins like NMC to BTC, you have to send them to an exchange, like btc-e.com.  Bitminter.com charged a 0.005NMC fee to send it.  I'm sure the exchange made some money off of the bid/ask spread, and then there was another small fee to send the BTC to my wallet (outside the exchange).  The fees aren't bad if you send larger amounts of money, but the really eat into profits if you send frequently.

In sum, merged mining is a nice feature to have, but it isn't a big deal.

Every time price went down, minimum buy always rise. those who have small amount BTC will sad (like me)  
only have 11 GH/s

But, i think price is competitive, because PBMining don't cost any fee. while cex.io still had some fee  


I think merged mining will have extra profit
maybe someone that know more can help us


That's not going to happen
because it's CONTRACT and cannot canceled

I think you need read carefully Terms of Service / the contract

It really doesn't make that much of a difference, so why even bother implementing it. Thanks for your suggestion though.

So it's the same with bitcoin. I noticed that too in vertcoin/monocoin and the crytonight coins (xmr/fcn). The merged coins don't have much value and I wondered if it was worth the effort.

What you are saying is correct, but the merge-mined coins are of really little value, such as Namecoin, Ixcoin and Devcoin. They don't really make a difference, and exchanging them is a unnecessary hassle.

From what I understand, merged mining is still mining bitcoin. But since some coins are based on bitcoin code, you can use the same hashing power to mine those coins, like for example namecoin. Of course, those coins should support merged mining for you to be able to do this. For example, for a single hashing power, you mine bitcoin and namecoin, without losing or dividing hashing power. Some bitcoin pools already support merged mining. I think this is what lunamine is saying in their ad.

I just don't know if current merged mining setups bring in considerable additional income.

I think thats what i´ve meant, if i get it right, merged mining is e.g you can decide if you want to mine bitcoins today and altcoins tomorrow isn´t it?

How about merged mining? Does PBmining has any plans for that? In lunamine, it caught my attention that  for the 1 TH contract, they plan to include merge mining.

Yup, you pay about 30-40% of what you mine in fees...
And I know it's not a lot, but you also have to pay fees for trading AND transaction fees for every withdrawal...
So in my opinion, PBMining is awesome. Would've been even better if the price would be at 0.002 BTC / GHs now, WAY faster ROI and I would invest a LOT more if it was

I'll rerun the 1 TH/s example with cex.io.

pbmining.com - Cost is 2.9BTC with no other fees, 5 year contract, and 10% referral program

cex.io - Cost is 3.17314BTC + 0.18USD per GH/s per month, and it is possible to liquidate your GH/s at any time
0.18USD * 1000 * 12 = 2,160USD or ~3.7BTC at today's exchange rate for one year of fees.
So cex.io is 3.17314BTC + ~3.7BTC or ~6.87BTC expenditure during the first year of mining.
You can subtract 1-2BTC from the expenditure when selling your GH/s after a year.

Still not a good deal compared to pbmining.