As readers of my blog know, I will only promote products and/or services that I myself use or invest in. I wanted to provide an update to the cloud mining contracts that I recently purchased. Cloud mining works differently than traditional mining in that you do not purchase any hardware to do the mining for you. This means you do not incur large electricity costs associated with owning your own machine. It is all done by others and you are simply buying into a pool. When I started them in May 2017 I wasn’t really too sure what to expect.
Now that I have a good amount of data and info to provide a solid report, I wanted to provide some feedback based on my personal experience. The first contract I started was with Hashing24. They only offer Bitcoin mining. The way it works with them is you buy whatever hashing power you want (for more on that see this post.) They have plans that are as low as 100 GH/s (that’s a very low computing power) and cost as little as $18. Because they offer indefinite contracts, you pay a small daily maintenance fee of $.033 per 100 GH/s.
The upside to Hashing24’s model is that once you pay your upfront amount you can theoretically collect daily payments forever. In that manner it is similar to buying an immediate annuity.
In the interest of full disclosure I purchased 4500 GH/s ($800). After the daily fees are subtracted I earn about .0018 BTC per day. Depending on the value of Bitcoin, I make around $8 per day. If we extrapolate that out it would be about $240 per month with a break even point of less than four months. That’s not too bad an investment because everything after month four would be pure profit. One thing to also keep in mind is that the mining difficulty will increase in the future which will eat into your profits.
On May 25th I decided I wanted to start a contract to mine Ethereum. The Ethereum blockchain technology is being embraced by all the major crypto companies as they are using the Ethereum Blockchain to create their own cryptocurrencies. Ethereum is the 2nd largest cryptocurrency with a current market cap of $34 billion compared to Bitcoin’s $75 billion.
I purchased my Ethereum cloud mining contracts through Hashflare.io. At first I purchased 35MH/s and later to decided to add another 15MH/s. The contracts are for one year. I also decided to start mining Bitcoin with them as well and their Bitcoin contracts will pay for life too. Hashflare also allows you to change the percentage of hash power you want in each pool. If you see one pool performing better, you can put a higher percentage into that one.
The cost for 50MH/s was $1,090, but I got more bang for my buck because I paid in Bitcoins and the value of my Bitcoin purchase appreciated. This meant that my Bitcoins went further and, in reality, effectively cost me around $900. Let’s go conservative and take the higher amount of $1,090.
The calculator on their site predicts that at the current price of Ethereum ($223) I would make $3,088 off my $1,090 investment for a net profit of $1,998. That kind of return makes it worth the risk to me.
Sometimes you can get lucky too depending on the price you buy your contract. For example, I bought a 100 MH/s contract to mine Dash (another crypto that is gaining popularity every day, especially after they signed a deal to partner with Arizona State University to develop new technology). I paid $580 for the contract when DASH was trading at only $165. It is now trading at over $350 and has moved all the way up to the #6 crypto in terms of market cap size ($2.6 billion). That increase in price (if it holds) makes my returns more than double what they would have been. I would caution that the opposite could happen as well if you were to buy a mining contract and then the price of that coin were to lose half of its value then you would wind up losing quite a bit of that investment.
In June 2017, I started mining with the longest running cloud mining company, Genesis Mining. I added to my mining positions in Bitcoin and Ethereum and I also I started mining Monero to diversify my holdings even further. Again, I was very fortunate since I bought 432.5 H/s for $332 on a 2 year contract when the price was only $55 per Monero (XMR) coin. With it now trading at $133 and a market cap of $2 billion (#9) that investment looks the best so far. If you are concerned with longetivity, I would recommend Genesis Mining as they were the 1st and their operation is the most professional in the cloud mining industry. The tradeoff to that is their payouts are slightly lower than their competitors.
Again, because I am a long term investor in major cryptos like Bitcoin, Dash and Ethereum, I view all of this as a solid opportunity to diversify your portfolio and at the same time attempt to make some passive income. Keep in mind that cryptocurrencies are extremely volatile and that can wildly impact your potential profit. Do your homework first. If you are a long term investor in cryptocurrency, this appears to be a worthwhile play.
If you would like to purchase a cloud mining contract, I have provided links below with promo codes that give you a discount n your purchase(s).
MINING DISCOUNT LINKS/CODES: (be sure to enter when registering)
Hashflare.io = BE07BAF 10% off all contracts
Hashing 24 = PGV7EF9W 4% off all contracts
Genesis Mining = xyQioz 3% off all contracts (they also accept credit cards for convenience)
Trading and investing in digital assets like Bitcoin and other altcoins is highly speculative and comes with many risks. This analysis is for informational purposes only and should not be considered investment advice. Past performance is not necessarily indicative of future results.