Hello everyone, my name is Angelos and many of you might know me from any of the technology endeavours i've pursuit over the last decade. Endeavours such as Exevior Technologies, BeepXtra, Clickahost or Trion Solar.
I've been involved in cryptocurrency for some time now, and lately that became public! And by going public, the curse of every technology literate engineer, kicked in. The curse where everyone around you want to know about this exciting new technology, or how do you do this or how to fix that.... Well, the answer is no, just because i studied or am involved in something related to "Technology"... does not mean i can fix your playstation!!!
Moving on, i've been asked the question about mining cryptocurrency and why should someone buy cloud mining rather than just invest in a cryptocurrency directly. And that is the purpose of this report, to simply answer that once and share it with you all.
If you are asking this same question, we can all assume you are aware of the basics, what is a cryptocurrency, what is bitcoin and ethereum and you propably know their current values as well (Time of writing this BTC is over $1300+ and ETH $80+).
So what are the pros and cons of mining VS buying. Let's say i got $1000 to spare and want to invest them in cryptocurrency. What do i do? Where do i start from?
At first, you need to decide WHICH currency you want to "devote" this investment. There are hundreds of cryptocurrencies out there, and beware as some of them are a scam or a ponzi scheme. The ones i would suggest at this point in time as a relatively safe bet, are Bitcoin, Ethereum, Monero and Zcash. Why these, is another large subject, so let's stick with the phrase "These are the most profitable at present".
I am personally fond of Ethereum and that's where i am currently investing in. I don't buy it. I mine it and allow me to explain why.
Going back to my spare $1000, if i were to buy Ethereum now, it would get me approx 12something ETH with today's prices. The time you buy it is also an important factor, as these popular currencies flunctuate in the market based on demand and supply. With the USA being the biggest stakeholder in their market cap, they reach their top daily value during USA working hours (Peak exchange) and they tend to stabilize on a slighly lower value during late night. The circle repeats. So if you are buying, buy it late night USA time, if you are selling it, look for the peak during the day.
Now let's go back to the spare $1000 again, as i would NEVER spend them directly into buying Ethereum. I would invest them in mining as that would supply me with much more ETH in return, than the 12 i would get today. So let's do some simple math. There are 2 routes to follow in mining. You either build mining rigs yourself and run them 24/7 or you commit to a cloud mining package. The difference? Well, setting up mining rigs requires you to be a techy, and i mean an in-depth techy. It ain't the easiest thing to build multi-GPU systems both in hardware assembly and software, not to mention the monitoring they require for a smooth operation, cooling, and of course, the electric bill at the end. A cloud mining package includes all the above, for a small fee of course, but less headache for a slightly smaller piece of the pie. Is it worth it instead of running your own rigs? If you are going to go big on mining directly, then do it, otherwise if you are on a budget, cloud mining is for you.
So what does $1000 get me in cloud mining and how much Ethereum. Afterall, that's all that counts at the end of the day. Mining is calculated in Hashes per second. In other words, how many miles of code can your miner run within a period of time. And when we refer to Ethereum, we are counting MH/s (Megahashes per second). $1000 investement would get you approx 40MH/s. Now let's translate that to actual ETH returns. 40MH would normally generate around 1.54 ETH per month, and mining contracts are usually calculated on a 24Month period. So you pay 1000$ today, and you get 40MH/s for 24 months. Before you start jumping up and down, there is 1 additional cost to the equation. 1.54ETH is not all entirely yours. You just bought a fraction of a mining rig. It costs money to run that rig, both in maintenance and electricity cost, so while you don't have to deal with all that, a part of your mined earnings goes towards maintenance and power costs. A typical maintenance fee would be $0.030-$0.040 per MH per Day . In other words, around $1-1.20 per MH per month. We have 40MH in this example so let's say $40 worth of Eth per month, would take away about 0.5ETH with today's prices. Eventhough that might sound like a large percentage, it's all costs of running the mining rigs, while you would pay a bit shy of that if you had run them yourself. Still, you keep over 1ETH per month in clean profits from this deal, and that happens for 24 months.
So in 2 years time, you will end up with twice the ETH you could have bought directly today (And propably much more than twice, as it's price rises, your cost per month will be less ETH... the $ cost is always the same per MH).
Long Term Investement (HODL)!
Does 2 years sound like a long time? Well, let's go back to buying it now for a second. I can buy 12ETH today. When would that investment give profit to me? Today? Tomorrow? Of course not. An investment afterall should always be mid-to-long term in order to provide good profits, and 2 years ain't that long. Your aim is to buy low, and when it goes higher, sell it for profit. So what if you were buying 1 ETH per month, for 24 months? How much would that cost you? Nobody knows, and it all depends on where it's price will go. Last year it was under $20, while last month around $50. Today it's over $80 and it's rising steadily. I call Ethereum, "Bitcoin 2.0" as i strongly believe it will rise as high as bitcoin or even higher. Bottom line is, if we consider it's current rate of rising in price, it would cost you hundreds of thousands of dollars to buy 1ETH per month for 24 months. Of course you would still have 24ETH at the end and it will be worth XXXXX amount, but how much would it cost you to get it? Well, that's the beauty of cloud mining. You will get a steady stream of 1 ETH per month for the next 2 years, regardless of it's price fluctuations, whether it costs $80 or $500 a piece, your Ether will still come in steadily, and it cost you just $1000 today.
So, i will leave it to you to decide.