Day 1 of Bitcoin Mining in HashFlare: would it be profitable? Investing $1100 initially

In this post I'll explain why I decided to invest in HashFlare and how to do it.

I've looked a number of times to bitcoin mining but always found that either it was too time-consuming setting up everything, not cost effective or both. I have bought bitcoin and other cryptos from exchanges and currently, just HODL as I believe in the current market trading would probably be less profitable than just HODL. I'm not saying that trading would not work in the future, just that right now HODL seems a better strategy.

Hardware Mining
As I already have purchased bitcoin I want to try also mining. After doing some research investing in hardware, like an Antminer S9 is a significant initial investment, plus time-consuming for the setup, electricity expenses and noise. Appart from the fact that it is currently difficult to find the hardware, and most importantly, that new hardware will continue to come out, the difficulty will increase and the S9 will become less profitable.

Cloud Mining

The other mining option is cloud mining. I've been always quite skeptical about cloud mining as the question: if they earn money mining why would they share the benefit with customers and don't mine directly for themselves? One possible answer to that question is capital investment. To be able to mine they need first to get the money to buy the hardware, sure they could get some financing but most probably not as much as they get from selling contracts to customers. So if that premise is correct the business model will make sense providing an incentive to the mining company to share the benefits so they can sell more contracts. We have to remember also that as the network difficulty increases there is a need for a constant increase in computing power (hash power).

Trusted companies
From my research, I found out that the most trusted mining companies are Genesis and Hashflare.


I created an account on the first one time ago just to check it but unfortunately I never bought any hash power, I say unfortunately because it seems that Genesis is a better deal than Hashflare, so much that they are not currently selling more contracts due to the lack of mining hardware. The problem with Hashflare is that last summer they changed their contracts from indefinite to one-year contracts. For the noobs: a contract is what you purchase to get computational power (hash power measured usually in tera-hash per second or TH/s). So the more TH/s you have the more BTC you will get.

Test account with $1100
As Genesis is no option right now I opened an account with Hashflare and contracted $1100 which gave me 5 TH/s.

The process was very simple, I didn't even have to provide my name or address, the only requirement is your email, date of birth and the payment method which can be in bitcoin, bank transfer or credit card. I wouldn't consider paying in bitcoin a good option. If we expect bitcoin to continue increasing in value paying in bitcoin could work out very expensive, like the two pizzas purchased with 10.000BTC. Maybe around 0.06 BTC doesn't sound too much now but if it goes to $100k it would have cost me $6000 instead of $1100 (at the current price of around $15k). I believe is always better to HODL. Bank transfer has the problem of the time to clear and credit card was relatively easy although I had to call my bank so they could tell me the verification code that they put in the concept of the credit card transaction, as it was not appearing on my online credit card movements.

Just after I entered the verification code the 5 TH/s Hasrate appeared on my account. Then based on this spreadsheet:
https://docs.google.com/spreadsheets/d/15W5EuyMo7zO4SxysxmRUp3NT7nKoyyI99rZAeRBKbyY/htmlview?usp=sharing&sle=true
I configured the pools for my SHA-256 contract, selecting today 100% Slush. You can configure your pools once a day, I didn't know this until I changed so maybe I made a mistake because the best pool today is Antpool which wasn't in my list of pools but maybe I had the option to add it. I'll try tomorrow. I have also configured it so it reinvests the daily earnings so I can compound earnings and get quicker to a reasonable stream of revenue.

So let's see how it goes, I'll post from time to time how the experiment is progressing. An $1100 investment is not too much but I want to test it first before putting any more money on cloud mining. It could be that just buying $1100 in BTC directly from the exchange will work out more profitable, but I want to test it and show it to you.

Please let me know below your opinions. Are you against or in favor of mining in general and cloud mining in particular?

References: Hive account@valikos

Hive account@cryptonick

Hive account@louiseelizabeth