Why does "cloud mining" service work?

Tyrantt

hero member

Activity: 1022

Merit: 564

Need some spare btc for a new PC

Quote from: maeusi on July 23, 2017, 04:10:58 PM

Legit cloud mining services are very rare. Maybe two or three. Why do they rent out and not profit theirselves? Mining makes profit on long term. Whwn you invest yourself, you have not that much money as it is possible to invest by crowd. So it makes sense to rent out hardware. But as I said, legit cloud miners are really rare.

Hard to think that there are any nowdays. All that I've made ROI have stopped their cloud mining services and the best one there was (cex.io) has closed it's service due to high maintenance fees. Cloud mining services are pretty much gone.

xIIImaL

legendary

Activity: 1372

Merit: 1005

Quote from: spngebob on July 26, 2017, 11:00:33 AM

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

They rent their equipment because they want to upgrade farms.
So you are probably just lending them money for long period.
I don't see any other reason.

If we want to be make 1000$ per month means which antminer series would option to fit for it? Please let me know the cost of the miner and where I can buy it in online in middle east and asian region. Can we lend it for some months.

spngebob

sr. member

Activity: 770

Merit: 254

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

They rent their equipment because they want to upgrade farms.
So you are probably just lending them money for long period.
I don't see any other reason.

giveen

hero member

Activity: 826

Merit: 1004

About cloud mining we all can only assume if those miners of genesis mining and hashflare is real. And they have surely been around for many years but they are not offering anything spectacular like returns in 3 months so that's the reason why you are getting confused. On genesis mining they have bitcoin mining valid for lifetime and they are going to charge fees on daily basis, nothing wrong with that but there are many people who complained about not getting roi and their contract getting cancelled. What genesis mining does is reduce the money which makes the fees they charge more and therefore they cancel your contract. However they haven't been any complains about their limited contracts and i have tried dash mining and got roi in 6 months so if you want you can try their eth or xmr mining. Onehash also allows you to rent miners but you need the right pool because i have tried it and barely got any profit but they don't have any contract system.

coolcoinz

legendary

Activity: 2744

Merit: 1174

Good questions OP. Since there are sites where you can rent a mining rig from a private person, and there are server room owners who can host your physical miner for you, why would anybody choose a cloud mining site? Given that you can't mine at home, if you had a choice between renting a physical miner from a private owner, buying your own miner and giving it to someone to run it at his farm and giving money upfront to an anonymous company for a contract that can be broken at any time? They know what they're doing, because they aren't giving you any guarantees.
Why are they still running? Because people are greedy and lazy and with cloud mining it's just a few minutes before you start "mining".

Ctn

sr. member

Activity: 644

Merit: 259

Quote from: Avirunes on July 23, 2017, 01:32:24 AM

Quote from: lottery248 on July 23, 2017, 01:11:40 AM

in a nutshell, if you are unable to buy miners and mine online, cloud mining is often a way to solve your problem, but legit sites are few.

And what about mining with rentals? You can buy small rentals if you have few coins. Will you choose something in which you trust some other with your balance and have no control over mining configuration or where you have control over the mining configuration and in same way is transparent as well (showing the proof of mining)

Yeah and just imagine without any control of miners how I'm determined of myself that I'm mining for the right pools. "Who will decide what" matters a lot here. The mining industry should be transparent to gain full confidence over the self mining or rental mining.

maydna

hero member

Activity: 2912

Merit: 556

Enterapp Pre-Sale Live - bit.ly/3UrMCWI

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I don't know much about cloud mining, and I had heard that many cloud mining services are scams. But I had also heard that there are some legitimate cloud mining services, which rent out their hardwares for their customers to mine Bitcoin.

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

i think its because they know that if they are mining by themselves then they can not make profit in a day and if they rent to other people in cloud mining services, they can make a profit from renting their hardware because they need to pay electricity fee. so they better to rent out their hardware than using for mining. beside that, if they have big hashrate, they can split the hashrate into some part then they can rent out for some people which it will give them more profit in the same time.

lottery248

legendary

Activity: 1582

Merit: 1006

beware of your keys.

Quote from: Avirunes on July 23, 2017, 01:32:24 AM

Quote from: lottery248 on July 23, 2017, 01:11:40 AM

in a nutshell, if you are unable to buy miners and mine online, cloud mining is often a way to solve your problem, but legit sites are few.

And what about mining with rentals? You can buy small rentals if you have few coins. Will you choose something in which you trust some other with your balance and have no control over mining configuration or where you have control over the mining configuration and in same way is transparent as well (showing the proof of mining)

oh this is one of the method too, thanks for the reminder and/or extra information. i bet 99% of the mining rig rentals are not able to block people from choosing their own pool, so rental is the safest cloud mining IMO.

maeusi

sr. member

Activity: 462

Merit: 254

Legit cloud mining services are very rare. Maybe two or three. Why do they rent out and not profit theirselves? Mining makes profit on long term. Whwn you invest yourself, you have not that much money as it is possible to invest by crowd. So it makes sense to rent out hardware. But as I said, legit cloud miners are really rare.

xypos

sr. member

Activity: 532

Merit: 250

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I don't know much about cloud mining, and I had heard that many cloud mining services are scams. But I had also heard that there are some legitimate cloud mining services, which rent out their hardwares for their customers to mine Bitcoin.

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

Your questions are exactly why you shouldn't invest in any form of cloud mining site.

You got something wrong though, mining is only profitable when there is cheap electricity, you run your own pool, you don't need external cooling because your area is already so cold, and you manufacture your own equipment or you have a company that wholesales these to you.

But services like genesis mining, all they're trying to do is to get their share in maintenance fee and sell as many overpriced contracts as they possibly can, and offer it as an investment opportunity.

As you said if it is profitable for them then why are they offering contracts to the public? After all they're here to make $$$. So all cloud mining is either unprofitable or a ponzi scheme.

Vod

legendary

Activity: 3668

Merit: 3010

Licking my boob since 1970

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

THAT is the exact reason every cloud mining operation is a scam. :/

Avirunes

legendary

Activity: 3094

Merit: 1469

Quote from: lottery248 on July 23, 2017, 01:11:40 AM

in a nutshell, if you are unable to buy miners and mine online, cloud mining is often a way to solve your problem, but legit sites are few.

And what about mining with rentals? You can buy small rentals if you have few coins. Will you choose something in which you trust some other with your balance and have no control over mining configuration or where you have control over the mining configuration and in same way is transparent as well (showing the proof of mining)

lottery248

legendary

Activity: 1582

Merit: 1006

beware of your keys.

in a nutshell, if you are unable to buy miners and mine online, cloud mining is often a way to solve your problem, but legit sites are few.

for actual cloud mining, those companies are providing their own miners and you gotta buy those hash for the profit as they gained, normally after deducting those mining maintenance and/or electricity fee. however, they normally won't ask for extra commission other than their cost. they have no referral program either.

for ponzi, it is to lure people to 'mine' bitcoin and receive those bitcoin from the user who 'invested' later. once operator gained enough fund they run out and your fund if you did not withdraw is gone.

ethantaylor

full member

Activity: 280

Merit: 100

Thanks all for your insightful inputs. Now I have a deeper understanding of cloud mining. I will open a new thread to ask more questions in order to decide whether I would dabble into such a thing or not.

Quote from: frowsiter on July 22, 2017, 06:32:28 AM

Cloud mining is not legit and who says that they give away rented hardwares. There is no connection at all between a cloud service and renting the miners. Both the entities are different. Cloud mining is the one where you put your money on the miner site to buy hash rates. Depending upon these rates your return of investment can be calculated. Everything can be seen and calculated from the dashboard of your mining site. This is actual cloud mining. Renting the hardwares is different thing. Cloud mining is behind the scenes and you only see interactive websites with data processing on it. Anyway cloud mining thats why is noy much trustworthy because we dont see any physical presence.

Yes. I meant to say cloud service, not renting out actual hardwares.

frowsiter

sr. member

Activity: 714

Merit: 261

Cloud mining is not legit and who says that they give away rented hardwares. There is no connection at all between a cloud service and renting the miners. Both the entities are different. Cloud mining is the one where you put your money on the miner site to buy hash rates. Depending upon these rates your return of investment can be calculated. Everything can be seen and calculated from the dashboard of your mining site. This is actual cloud mining. Renting the hardwares is different thing. Cloud mining is behind the scenes and you only see interactive websites with data processing on it. Anyway cloud mining thats why is noy much trustworthy because we dont see any physical presence.

wantjokull

sr. member

Activity: 700

Merit: 275

I think you heard and taken things in completely wrong way or from wrong sources. There are no companies which you think will give you hardwares to mine yourself.

Quote

legitimate cloud mining services, which rent out their hardwares for their customers to mine Bitcoin.

No they don't. There are service which gives you rented miners and note that they are not profitable.

If you really want to know how cloud mining works then you should visit genesis and hashflare. Those are the only (known to me) sites which are currently paying to their shareholders. So you may wanna risk your money there.

sunsilk

hero member

Activity: 3038

Merit: 634

Quote from: ethantaylor on July 21, 2017, 06:38:30 AM

I have a question: Since mining is profitable, why do those companies rent out their hardwares for other people to mine Bitcoin and don't simply use the hardwares to mine Bitcoin for themselve?

It's just the mindset they give to the people by letting investors rent out their hardware and in return of a contract.

But cloud mining is just a scam, I won't give enough time and interest with it anymore, it's proven by a lot of people here.

The ROI is even slower these days, better start to dream about your own mining hardware.

klf

legendary

Activity: 1344

Merit: 1000

Quote from: makulo123 on July 21, 2017, 02:44:18 PM

Well, the buying the coins is a hell of a lot better than renting cloud mining services.
1. No problems with mining equipment.
2. No complications with mining difficulty (which would make cloud mining less effective)
3. You can store them wherever you want on a safe place
4. It's more profitable, since you don't have to wait in order to have these coins actually
However, if you already have mining equipment or you found some cheap rig then it's actually the same...

In most of the developed countries, electricity charges are higher and that makes mining is not profitable even though you get cheap miners. These could mining companies offer higher hash rate to attract people and that's why many people end up trying these services. Instead, as you said it is better to buy coins directly and wait for two years to appreciate your coins to make a decent profit.

Ctn

sr. member

Activity: 644

Merit: 259

Quote from: Proton2233 on July 21, 2017, 07:44:11 AM

I would not dare to give my money to loan to people whom I don't know. Cloud mining too good for the crooks to I trusted them. I think it is better to spend your money to buy equipment than give it to scammers.

Indeed it is the case with me. Why would invest money on something that you can do yourself at the same expenses that you are going to risk on something "Unknown". Yes they are like that, cloud mining always turn to be scammer once they realise they are not profiting much or the cost of maintenance is surpassing the cost of earning. You can bring new miners to your house by yourself and earn decent money in a year if period. Trust me it not worth.

Avirunes

legendary

Activity: 3094

Merit: 1469

Quote from: TryNinja on July 21, 2017, 06:51:37 AM

TL;DR: Because you giving them money upfront allows them to buy more equipment to get more hashpower. They're basically taking out a loan.

https://www.reddit.com/r/Bitcoin/comments/6gbf9x/cloud_mining_is_a_scam/dip4kzu
https://www.reddit.com/r/Bitcoin/comments/6gbf9x/cloud_mining_is_a_scam/dipltwy

Absolutely correct. They never own that rental until they get money from us. Later on shares a part of their profit accordingly with the share we have. Just like TryNinja said "It's a loan"....but a no collateral one.

Even though they are giving you a share of their profit daily they are not transparent and sometimes you might not get the your actual part(they may take some more portion for themselves) ultimately making your ROI period long.

Topic: Why does "cloud mining" service work? (Read 1373 times)