Quote from: gopnik on November 26, 2017, 04:03:10 PM

Quote from: mptak123 on November 25, 2017, 08:05:16 PM

Quote from: gopnik on November 25, 2017, 06:03:13 PM

This whole cloud mining contracts business is a huge fraud; these businesses conduct deceptive business practices, and are in violation with the SEC Section 2(a)(1) [15 U.S.C. §77b(1)] of the Securities Act in the US and the european securities and markets authority. They do not disclose the financial risk to their clients and are in violation with countless regulations.
I am confident an audit would show a ponzi scheme business model. These companies are going to cope with huge law suits. It is just a matter of time before the crack down

Realize that by purchasing mining contracts, you are actually not renting miners but purchasing unregulated securities in an offshore dividends generating company, without the rights attached to regular stock. In short, you own nothing
Think about it, why would a mining company rent their existing rigs if mining is such a profitable investment?
They dont. Your money allows them to expand, market their securities and increase their operational margins. Their profit is therefore the spread between the company mining profits and the investors dividends. Genesis mining sells stocks out of thin air

These mining companies are highly opaque entities; they do not deliver audited quartely and annual returns, there are no meeting of shareholders with the board of directors, they are not regulated by any financial authorities, which is a huge risk for investors as they can easily rig the market in total impunity and take inconsiderate risks with your money. There is therefore no empirical evidence that this whole cloud mining contracts isnt a ponzi scheme only supported by a continuous growing flow of investors money and skyrocketing cryptoccurencies prices.
You should ask yourself what would happen to these companies if the cryptocurrencies prices crash; they will likely disappear with your money.

On top of that extreme risk, your securities are highly illiquid and would be worthless in case of a market crash. This combination of undesirable factors must command a very high return to compensate the risk; I am not a probabilistic risk assessment expert, but huge profits would be required to make any sense to an investment professional

I also see a lot of confusion among the comments about how to calculate the actual profitability of the mining contracts
My understanding is that to determine if mining is a sound investment, you should only calculate your ROI based on the inflation adjusted crypto currency return, and certainly not based on the exchange rate.
Think about it, today, bitcoin inflation rate is about 4%, which means that about $14,918,220 worth of bitcoin is created per day by ALL miners around the world; that's $179,018,640 per year which is nothing given the ever increasing pool of miners.

The question should be, if i invest 1BTC in mining operation today, how many BTC will i have in one year (minus the 4% inflation)?
Now, i would be highly interested in seeing the real world numbers; what is the actual difference bewteen holding bitcoin for 1 year vs 1 year of bitcoin mining contract regardless of the exchange rate, and all fees included from end to end

I must say you wrote a lot :-)

Unfortunately you don't understand how mining works which is a big gap when it comes to BTC.
Moreover you definately did not see contracts becuase if you did you would wrote it completely different.

Do you homework and come back with full knowledge.

Best Regards, Marcin

with all due respect, your post is worthless without proper counter argument

I read the technicalities and legal details and these are fraudulous securities disguised as cloud computing lease contracts

FYI Just one story in an ocean of similar affairs;
These ones got busted because they were based i the US; but companies like Genesis are offshore and can do what the fuck they want with your money

The Securities and Exchange Commission today charged two Bitcoin mining companies and their founder with conducting a Ponzi scheme that used the lure of quick riches from virtual currency to defraud investors.

According to the SECs complaint filed in federal court in Connecticut, mining for Bitcoin or other virtual currencies means applying computer power to try to solve complex equations that verify a group of transactions in that virtual currency. The first computer or collection of computers to solve an equation is awarded new units of that virtual currency.

The SEC alleges that Homero Joshua Garza perpetrated the fraud through his Connecticut-based companies GAW Miners and ZenMiner by purporting to offer shares of a digital Bitcoin mining operation. In reality, GAW Miners and ZenMiner did not own enough computing power for the mining it promised to conduct, so most investors paid for a share of computing power that never existed. Returns paid to some investors came from proceeds generated from sales to other investors.

As alleged in our complaint, Garza and his companies cloaked their scheme in technological sophistication and jargon, but the fraud was simple at its core: they sold what they did not own, misrepresented what they were selling, and robbed one investor to pay another, said Paul G. Levenson

Joshua Garza did not have a real mining farm.
Genesis Mining has real miners I have seen them whit my own eyes and touch our miners mining fresh new coins.