Quote from: thevictimofuktyranny on January 30, 2015, 03:45:36 AM

Quote from: TheRama on January 30, 2015, 03:10:44 AM

Sorry if this is a super newbie question, but I am trying to understand what this is...

Please let me know if I got this right:

The bitcoin mining difficulty is constantly increasing as more people are competing to mine the same # of bitcoins and the number of "mine-able" bitcoins decrease.

AMHASH1 is a contract for the use of the current mining equipment on hand right now and AMHASH1 will never upgrade its equipment through their servicing fee. This equipment will eventually be made obsolete because of the mining difficulty issue. Once the equipment becomes too inefficient to produce a profit for the contract holders they will cease operation, the shares will no longer pay a dividend and will become worthless.

The primary variables that affect how long the cloudmining contract can continue and produce dividends is the price of BTC and the rate of the increase of the mining difficulty. Contract holders are just speculating that the contract will eventually at least pay dividends worth at least 100% of the price of the contract before AMHASH1 inevitably goes out of business.

Is this roughly how this works?

Close enough to sound true, without being true Cheesy

Difficulty goes up; difficulty goes down Roll Eyes

Gen 3 AMhash, will continue to pay a dividend until the maintenance fee (electricity + labor) exceeds the dividend for 10 days: This is called the 10 day rule Tongue

Gen 3 AMhash will definitely cease at the next Block halving in the middle of 2016. Therefore, it is possible that dividends could carry on for 1 year 6 months.

BTC price determines the size of the dividend. Current difficulty determines the size of dividend.

AMhash never goes out of business, merely the Gen 3 mining equipment in the Bitcoin farm you are buying a share in, ceases to produce coins exceeding the maintenance fee.

AMhash can build new farms e.g. Gen 4 mining equipment Bitcoin farm in the future for themselves or for us or for big investors Grin

Recently, there was 5% decrease in mining difficulty, which increased the dividend a little bit. Before that, the BTC price fell below $209, which greatly reduced the dividend. The latter always has the biggest impact on the dividend.

Hope that helps, whatever decision you are contemplating Wink

Appreciate it. That actually clarified a lot for me.

Cheers.