{"id":3923,"date":"2018-03-19T20:29:13","date_gmt":"2018-03-20T00:29:13","guid":{"rendered":"https:\/\/howigrowmywealth.com\/?p=3923"},"modified":"2018-03-19T20:30:05","modified_gmt":"2018-03-20T00:30:05","slug":"cloud-mining-calculators-dont-account-for-this-vital-factor","status":"publish","type":"post","link":"https:\/\/howigrowmywealth.com\/cloud-mining-calculators-dont-account-for-this-vital-factor\/","title":{"rendered":"Cloud Mining Calculators Don’t Account for this Vital Factor"},"content":{"rendered":"

Don’t use a cloud mining calculator without keeping in mind they are static calculations<\/em>. You need to remember that mining difficulty almost always goes up as time passes.<\/p>\n

But don’t worry. If you’re thinking about cloud mining profitability I have an easy rule of thumb you can use to quickly rule out unprofitable cloud mining contracts.<\/p>\n

You simply calculate the profitability using a static calculator and determine if you’d make back the initial amount.<\/p>\n

I’ll use hashflare.io as an example, as of 19 March 2018 they are selling 100 KH\/s for USD$2.20.<\/p>\n

Using a static mining profitability calculator like the one over at etherscan we can see that if network hashing power stays the same, we’ll make a whopping $0.1141 per month or $1.3692 per year. In other words you’ve spent $2.20 to get $1.3692 worth of Ether.<\/p>\n

Not smart.<\/p>\n

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But say the number came back at $3. That would be $0.80 profit per contract. Easy money right? <\/p>\n

No.<\/p>\n

Don’t Stop with A Static Cloud Mining Calculator<\/h2>\n

Unfortunately it gets worse, because as I previously mentioned that is using a static network hashrate calculation. As more and more people mine Ethereum the network hashrate increases meaning you’ll mine less.<\/p>\n

For example if the network hashrate were to go up to 300000 GH\/s you’d only make $0.10 per month.<\/p>\n

Network Hashing Power Has Historically Only Gone Up<\/h2>\n
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It’s vital to take into account the growing network hashrate when calculating cloud mining profitability<\/p><\/div>\n

Is it possible the network hashrate stays the same or goes down?<\/p>\n

Yes, but it has never gone down over an extended period of time.<\/p>\n

So unless the hashing power of the network stops going up and drops off, there is no way that ethereum cloud mining at hashflare.io will be profitable.<\/p>\n

You’re Probably Better Off Just Buying the Cryptocurrency<\/h2>\n

It’s possible the price of Ethereum goes up and you end up making some money, but you would have made MORE money if you bought ETH directly.<\/p>\n

If the mining contract will yield at least the amount you pay, I go to my second rule of thumb. A 50% discount.<\/p>\n

I would have to see a cloud mining contract at a 50% discount or more to even consider purchasing buying it. So if hashflare.io was offered 100 KH\/s for say $0.65 I would consider it.<\/p>\n

With cloud mining you are risking that the network hashrate doesn’t go up too fast and you’re risking that the price of the coin doesn’t go down. I want to be compensated for those risks so I look for a 50% discount.<\/p>\n

However, as it stands, ethereum cloud mining at places like hashflare.io is a losing investment, and you’re much better off simply buying the cryptocurrency outright.<\/p>\n

I’m not aware of a cloud mining service that has a chance of being profitable. If you know of one please let me know!<\/p>\n

I made the mistake of buying a ethereum cloud mining contract at hashflare.io<\/a> and it cost me 20.73 ETH and I hope others don’t make this same mistake.<\/p>\n

Cloud Mining Calculator<\/h2>\n

https:\/\/etherscan.io\/ether-mining-calculator<\/a><\/p>\n

https:\/\/www.coinwarz.com\/calculators\/ethereum-mining-calculator<\/a><\/p>\n