Where does the money come from? Why wouldn't I just mine instead of leasing? If someone thinks they can make x dollars using my hashpower, why wouldn't I just mine instead of letting someone else use it and only getting a fraction of the profits...
you lease your rig out for more than the most profitable coin. people are willing to pay.
We lease 1/2 of our rigs as a sort of insurance policy. I always hope the leasers make more than we would have made with the leased mining power and that is the goal. I've walked several people through the different scrypt coins and multi pools to try and achieve the best profit. The goal is that if rigs are leased out to others then they will bear a portion of the risk (about 40% in this case) so we can plan upgrades and new equipment. Additionally when you plan correctly you can lease out say 5-10 rigs and purchase a new rig. Since leasers pay upfront you can purchase the new rig 1 week earlier than if you mined with the rig yourself.
A lot of people are chasing after quick profits from leasing. At some point customer will stop leasing if you don't truly try and make profit for your leasers.
Just my 2 satoshis.
I've actually started putting buy it now prices in auctions and I plan to change the BIN price to whatever middle-coin or multi-coin would be expected to payout in order to prevent leasers from paying more than I would be expected to make.
2 more satoshis.
Power/space/cooling are a huge issue for a lot of people. If you have cheap (*free) power/hosting/network/maintenance/supporting hardware) leasing out rigs is almost entirely profit for the Provider and can be more profitable to the Renter since they don't have to finance rigs and pay power/cooling etc.