Quote from: Kato on January 18, 2014, 05:13:14 AM

I thought I would share my experience so far regarding Cloud-hashing, positive or negative as it may be, and only the facts I have on my own contracts.

I like to start constructively. Despite service delays and disruptions along the way, Cloud-hashing have ultimately delivered the features to customers they have promised. So some credit is due there. Now on returns...

I bought 2 year September contracts. According to their on-site advertising at the time of purchase, the minimum expectation for BTC mined per year was equivalent to around 1.3 BTC per GH/s purchased. In the first 3 months I have so far mined around 6% of that annual projection, which with the BTC mining rate declining it should have been over 25%, so it is well behind the advertised BTC projections, even recognising these can only ever be estimates in a rapidly changing environment. I have been re-investing some of the earnings in the RRP (experimenting between 0 and 30%), which has so far given me an extra 20% GH/s on my initial amount. So that at least works, and seems to partially compensate for the exponentially increasing difficulty. Given all of this, I've calculated that over the last 2 months the rate of BTC being mined per day on my accumulated GH/s has fallen by around 40%, probably a better result than without the RRP, but overall still a much lower BTC yield than advertised.

The company presents their results in fiat dollars however. Given the 8-fold rise in BTC value since September, I therefore have received all capital back and then some measured in fiat dollars, consistent with their claim. That could actually be a relevant way to look at things if one is funding the contracts from fiat (as I did), which is how they quote the contract purchase prices. However, Cloud-hashing has no influence over the BTC price change, and ongoing 8-fold increases are certainly not a reasonable norm on which to form future expectations. The fiat dollar return can theoretically only be considered indicative then if one expects ongoing quarterly 8-fold increases in price, or if a legitimate claim can be made that if price had remained more stable, many more BTC would have been mined in line with the initial projections. I am not sure if there is such a valid inverse relationship here, and whether it could be significant enough to support such ongoing fiat return expectations. Perhaps somebody with greater understanding of the technicals of mining can comment on this. If not, fiat return results experienced to date seem unreasonable to expect for the future.

Possibly there is more context that others could provide here about the economics of mining BTC today. I note for example that even on CEX, estimated BTC yields are currently well below the cost per GH/s. So not sure how mining BTC makes sense right now at all in the absence of large price increases (and then if that's what you are relying on, why not buy BTC now instead?).

Regards all.

Long post, Kato, I don't know where to start explaining.
As a bitcoin miner you should be familiar with the 'mining difficulty' number. Anyway, mining difficulty is adjusted on every 2016 blocks mined (11 to 14 days). From september on difficulty increased about 30% on every period. That's 100% per month! To keep your hashrate relative at the same level, you need to reinvest to increase your hashrate by that same percent. If you started with 10gh in september that means adding another 10 gh in october, then adding 20 in november, 40 in december...
The question is, does your mined amount allow you to by that much new hashrate (gh/s) at cloudhashing.com, while still havinh some profit?
Or, same question, but from the other side, is new hashrate at cloudhashing priced low enough to allow effective reinvestment and still some profit to be made?