Question About Genesis Mining
Bitcoin contracts are currently open ended. I understand that a contract can end if it can no longer cover the daily fee of $.00028 per GH/s per day, but what is the maximum length of this contract? Do they cut you off at 2 years? 3? Can it possibly run forever?
I've tried asking support a few different times and keep getting the run around on this specific question. Help please!
Yeah you can technically keep it going forever if you add more hashrate to the contract to keep it profitable. I wouldn't be concerned about the exact duration that your contract might last since that is hard to predict, but I would focus more on the payback period (How long does it take to get your money back if you factor in difficulty increases and bitcoin price).
Back of the envelope math on breakeven point:
Current hash rate: 7.2M tera hashes
If I invest in 15 terabytes of hash, then I will receive roughly (15/7.2M)*12.5 (block reward) * 2750 (current btc price) * 144 (blocks per day) = $10.3 per day
current electricity = $4.20 per day.
$6.10 per day breaks even with $1950 investment after 320 days.
Assume hash rate continues to increase faster than price, breakeven point is probably closer to 500 days. I'm ok with 500 days if my contract can go forever, but if it ended after 2 years in the best case scenario and earlier in worst case scenario then maybe I wouldn't buy.
Theoretically, Yes, because the fee is based on USD, and if the price of BTC is high then it will support a payout even if if the difficulty goes crazy!
Theoretically it could last forever you mean? It seems the break even point is roughly ~500 days based on fees and increasing hash rate, so having the possibility of an endless contract is very nice, but would have to pass if it's 2 years or so based on possibility of being cut short.