Genesis Mining: Profitability projection for 30 USD BTC contract
Today I started my first mining contract with Genesis Mining.
The contract is a 30 USD outlay for 0.2 TH/s BTC mining and has a maintenance feed of 0.056 USD/day.
The contract has no fixed maturity but will terminate if it is no longer profitable.
I have taken the current Bitcoin difficulty from https://bitcoinwisdom.com/bitcoin/difficulty
and I escalate the difficulty by 5% per month.
The full analysis is given below. I estimate that the contract will break even in 13 months.
And only earning about 3 USD before maintenance fees make the contract unprofitable.
However, even this small profit is at risk
Should the the difficulty escalate at greater than 5%, the contract may well never be profitable.
Let's see what happens but on the face of it I would not recommend this contract.
UPDATE: The contract is still running: the return is currently about 0.39 LTC or $24 on the $30 dollar investment. The good news is that the return in $ is ahead of the scheduled $15. The bad news is that it would have been better to buy BTC for $30 and hodl.
To keep the price speculation out of it, let's looks at the return in LTC. Four months ago, at the time of purchasing the Genesis contract, LTC was about $40, making the cost of the contract about 0.75 LTC; so, about 52% of the cost of the contract in LTC has so far been recovered. This compares well with the schedule given in the original article.
UPDATE:
I have switched to getting LTC for the payouts of the BTC mining contract.
Since July 20 I have stopped receiving daily payouts.
Genesis Mining has announced that they have been hacked. Some details are here: http://blog.genesis-mining.com/genesis-mining-service-update
Today I received the payment for the 21st of July, but payments are still about a week behind.
UPDATE: I have now received three daily 'payouts'. They are running roughly at my predicted level. Interestingly, Genesis has another hurdle to get at your money - a minimum payout level of 0.0015 BTC. This means it'll take about 26 days before I can get any cashable return.
UPDATE: The return is now 0.5 LTC . The contract cost about 0.75 LTC, so 67% of the contract has been payed off.
Since my last update the Litecoin price has shot up to about $250, making the return worth $125, or $95 profit. While this profit is nice it is not the really attributable to the mining.
The contract is about 6months old, so it may still go into profit in terms of LTC within the next 6 months.
UPDATE: The contract is still running: the return is currently about 0.617 LTC or $51 on the $30 dollar / 0.75 LTC investment.
This is probably my final update and with that a conclusion: The Genesis contract was not a good investment. Contract lost money compared with just buying LTC.