1. If a miner was more profitable than the price payed, wouldn't the mining companies use them instead of selling them?
Yes.
I paid for a miner in November 2013 with delivery in February 2014. To this day I have not received a miner or a refund.
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2. If a cloud miner was more profitable than the price payed, wouldn't the mining companies use them instead of renting them?
Yes.
I just got 23.5Gh/s on CEX.IO and after mining for about a day my balance is -0.00001348 BTC. CEX gets paid up front for the GHS/BTC, has kept all the mined BTC as maintenance fees and has virtually mined 1.3k Satoshis from my account. I now owe them additional BTC ontop of what they've mined with their hardware.
Cloud mining is icing on the cake.
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3. Isn't it less risky to buy the coins upfront and not compete with the rising hashrate and diminishing returns?
No.
If you're mining and the fiat exchange rate goes up you make more fiat. If you're mining and the fiat exchange rate goes down you make less fiat.
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In my opinion, there is an influx of math-deficient kids and young adults spending money to buy miners in hopes of getting rich. This causes an influx of miners and less buying pressure on the actual market. In time, this influx should slow down as the general group will realize the futility of buying miners, and thus the price will begin to rise again.
Am I missing something as to the advantage of mining?
Am I missing something as to the advantage of mining?
Everybody is entitled to their own opinion.
Are you missing something? Well you seem to have a lot of questions, this is good. I should have asked more questions before my purchase.
