Is it cloud mining profitable?
Let's investigate what services are proposed now.
I consider 3 quite popular cryptocurrencies: Bitcoin, Litecoin and Ethereum. Coins exchange average rates for May, 28 2017 from coinmarketcap API:
BTC: 2115.14 USD
LTC: 0.0107494 BTC
ETH: 0.0764511 BTC
Cloud mining proposal consists of the mining cost and maintenance fee for offered hash rate power. I've took the mining price list from hashflare.io and the rewards (generated coins) per offered rate from online calculator:
# Bitcoin
SHA256 = { # https://alloscomp.com/bitcoin/calculator
"MINE" : 1.2, # USD per 10GH/s hash rate
"MAINT" : 0.0035, # USD fee per 10GH/s per day
"COINS" : 422 * 1e-8, # 422 satoshi per day for 10GH/s
}
# Litecoin
SCRYPT = { # http://www.coinwarz.com/calculators/litecoin-mining-calculator/
"MINE" : 13.5, # USD per 1 MH/s
"MAINT" : 0.01, # USD fee per 1 MH/s per day
"COINS" : 0.002087, # LTC coins per mine rate (~2495 satoshi per day)
}
# Ethereum
ETH = { # https://etherscan.io/ether-mining-calculator
"MINE" : 2.2, # USD per 100 KH/s
"MAINT" : 0, # maintenance
"COINS" : 9.185 * 1e-5, # ETH coins (~690 satosi per day)
}
Below is shown calculation graph examples for 100 USD investment for each of considered currency. The "outcome" line presents our expenses growth per day from 100 USD initial payment for hash rate power. Our revenue presented by "income" line. The "profit" line is the difference between "income" and "outcome". Since the cost for mined coins are higher than maintenance fee per day, the income is increasing faster that outcome. When income line cross outcome line, the profit changed to positive - it is a point of investment return.
The investments in BTC (SHA-256) mining will return in 222 days. Annual profit is 64.6%.
The investments in LTC (Scrypt) mining will return in 361 days. Annual profit is 1.0%.
The investments in ETH (ETHASH) mining will return in 149 days. Annual profit is 145.7%.
The Ethereum looks more profitable now and have no maintenance fee, but ETH contract is limited to only 1 year. The BTC and LTC contracts are unlimited and will continue to generate profit. Keep in mind that network mining complexity is constantly increasing and hash rate power you've bought will not cover maintenance fee in future. In that case only coins exchange rate growth could compensate your investment.
Anyway, this is just my small research and not an investing recommendation. Who knows what the price will be in one year?
ETH is changing to POS in november. i wonder how it will change this graph? also what happens to someone who starts a contract in say october mining eth?!
It is a good point! Thanks.
@the-celtic-tiger, thank you for valuable comment. I've transfered SBD rewards from the post to you.
I Invest much money in cloud mining. With that i have not so good experience ... better is it to invest direct in the companys there have the own hardware. It gives not so many good options ... but i make 8-10 % every month with that and that is enough for me.
Great post! upvoted and followed you. If you are interested how your ROI compares to cloudmining contracts; I test and compare all the largest cloudmining contracts with actual proof of mining gear in a google sheet file. I regularly update it so everyone can get the best deal for their money at any time! I also describe all the criteria you should take into account before buying a cloudmining contract. If you are interested you can find it on: https://steemit.com/cloudmining/@circularitylabs/everything-you-need-to-know-about-bitcoin-cloud-mining-comparing-genesis-mining-vs-bitcoin-pool-vs-hashflare-vs-minergate
OK! Thank you.