UPDATE March 2018: Since we are in a bear market the conditions from November 2017 no longer apply. Since Bitcoin price is lower now than in December and the difficulty has increased so the returns are less now, however if you believe Bitcoin will this year surpass the 20K of December 2017 you can still invest. The returns (in USD) are smaller at the moment due to the lower price of BTC so keep that in mind.
People hear about the great returns you can get with bitcoin and having a passive income mining coins is something that almost sounds too good to be true. It’s basically printing your own money so to speak.
But mining coins is a bit technical, your profit depends on how much you pay for electricity, the mining pool and your hardware. So to avoid all this hassle people are looking to buy into cloud mining. Basically you buy from a company that configures and sets up and maintains mining rigs for you at a set price per hashing rate. Of course this comes at a price and your return is lower than if you handled all the mining yourself.
One question I get a lot is but why would cloud mining companies sell to us if they could just mine for themselves? For sure they mine for themselves too but a company needs to pay taxes in fiat money, dollars or euros and cryptocurrency although you can exchange it for fiat money is highly volatile. Imagine the scenario where bitcoin collapses to half it’s current price, it has happened before and most likely will happen again. Now in this scenario, they invest in expensive hardware to get a negative return on investment. So in order to spread the risk they sell future earnings in crypto to you. This way they spread their risks over their clients and they can upgrade and expand their operation without being too affected by the volatility or without having to borrow money from the bank.
Cloud mining is risky as there are plenty of ponzi schemes doubling up as mining companies. Do not invest your money into just about any site that has the words cloud mining on it. I’m gonna refer in this article to genesis mining which is a reputable could mining company with a solid track record of over 2 years with real mining equipment in Iceland.
Most people that invest in cloud mining lose money and call it a scam. Basically they underestimate the increase in difficulty and the maintenance fees that eat away the profit making it almost impossible to break even.
So how do you make money with cloud mining? Is there a strategy to be succesful? YES THERE IS!
As mentioned there is the problem of increased difficulty over time. In order to offset that difficulty you need to reinvest your earnings to buy more hashing power. Of course if all you can invest is less than $200 don’t start it’s not worth it. If you go into mining go big. Invest at least 2K or more. This guarantees daily pay-outs that you can reinvest.
I’LL REPEAT: IF ALL YOU CAN INVEST IS less than $200 DON’T START IT’S NOT WORTH IT. (don’t comment it’s not working if that’s what you did)
Lets explain this in an example:
Update currently Genesis offers currently only a new plan (1/27/18) for ETH mining but this Monero example still stands as a method on how to calculate your potential profit.
On www.coinwarz.com we can calculate our return on investment. To do so we put our investment as hardware cost and put pool fees and power costs at zero since these are already included in the purchase price at Genesis.
At the current difficulty we are break-even before the end of the year. On a 2 years contract we more than double our investment. However difficulty is not constant but variable and usually goes up over time. So return will most likely be less. However with increase in difficulty we usually have increase in value of the coin and this offsets a lot of the losses due to difficulty changes.
So how do we prevent losing money? The secret is compound interest. As you can see our monthly earnings are $420 dollars this allows us to buy more hashing rate every month. This buys us about 500 H/s per month changing our total hashing rate to 5500 H/s. This ups our monthly earnings to $462.20 And effectively allows us to overcome the difficulty. If we keep on doing this every month we effectively are increasing our monthly return and we’re staying ahead of the difficulty changes while our coin gains in value over time.
The strategy is to keep compounding until we make over 1K month or more depending on your goal. After that reinvest 80% take out 20%. Every new investment runs for 2 years from the purchase date. This strategy allows you to create a steady monthly income that eventually becomes as high as your initial investment but keeps paying out every single month. You might have to switch coins or tweak strategy as time goes by but it’s perfectly possible to generate passive income.
If you found this strategy useful and you consider investing in mining crypto you could get a 3% discount (use code: TX8YQy in combination with this link) and copy my successful strategy.
I only recommend these Genesis and Hashflare because others have turned out to be scams and these 2 have been operating for 2 years+ without a problem. We also know Genesis has real mining equipment as we know from their facilities in Iceland (see video higher up).
“HashFlare 2.0: is coming soon!
Which plan to pick for most profitability? (Hashflare)
Note on 2018 -1-27:
Genesis currently has one plan available:
- $1520 buys you 40 MH/s
- 2 Years Ethereum Mining * (Mining Start 30.04.2018. – No refunds)
- No maintenance fee!
That’s cheaper than Hashflare which costs 880 dollars + maintenance fee for 1 year for the same hashing rate!
At Hashflare that is currently 660 dollar but only for 1 year and it comes with maintenance fee.
Update 23 March 2018:
There’s a new Hashflare promo if you use this link with this code: HF18BDAY30 you’ll get a nice 30% discount (for the first 10000 people!)
If you’re into trading crypto currency via bots you might also be interested in the following article (https://email@example.com/review-of-cryptohopper-351b0a2f2a8f)
The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
If you have no money to spend on mining try this: