Quote from: btcltcdigger on March 11, 2020, 06:12:34 AM

So here's my 2 cents;

I personaly see all cloud mining platforms as scams, or fraudelent at best.
And here is why; cloud mining platforms are business like any other, and they sell a service, which roughly translates to:
- buy a contract for X, and receive Y amount, ROI Z guaranteed.

But ask yourself, if Y+Z are more than X, as all of them promise, why sell the service at all? Why not just mine and make more than X will provide?

If a platform guarantees a return they are likely a scam, you can't guarantee mining earnings.

The scam usually comes from selling contracts and not having the physical mining equipment, they claim to have the miners but in reality they just pay you what a miner would have earned if it was mining.

As for the Y+Z > X, if the company is real they will be mining for themselves (with hashrate they haven't sold or hashrate they have allocated for themselves). But as a business, you want cashflow. Y+Z in 6 months might be greater than X, but if you sell a contract today for X you get X today without having to wait 6 months.

If the company buys $500k of miners that will produce 10PH and they sell that 10PH for a 1 Year contract somewhere around $450k, they get another $450k they can use to buy almost another 10PH, at the end of the day almost every contract company charges you for electric either at the end of the day or included in the purchase price. So in turn they get their original capital back, get enough hashrate for themselves (or they can sell it off) and in 1 Year the equipment belongs to them and you as the customer pay for the electric. If they only mined, they would pay 500k upfront, have to wait for the mining income to come in before they can do anything else and also pay the electric bill for that mining.

Think of it like annuities, you get paid a little bit every day, would you take a slight loss in the long run to get a large payout now? And before you answer remember having cash now = you can use it now without waiting.