Hi All
This topic is covered everywhere , and most already know that the best strategy is to stash by buying coins rather than mine them, and especially cloud mine them.
However I was interested to see how the numbers will roughly churn in a "hand drawn" business case scenario for cloud mining..and this is my first post here so support, comments, arrows and flowers are most welcome!
Let's take the example of Genesis-Mining with Bitcoin:
Currently an unlimited 0.6TH rate will cost you 90USD (0.0004 XBT @2540 USD today), suppose with the current difficulty increase, it will last roughly 24 month profitable before the cost and fees will make it useless , currently a 0.6TH is churning 0.000185 XBT per day or 0.47$.
At first glance, you say Within 24 month you will get 0.000185 x 720=0.1332 XBT or 0.1332 XBT x 2540 USD (per today's average) = 338 USD, or 169$/year or a 87% return per year.. WOW, awesome.. well thinking again not quite.
Let's go into the difficulty increase of the Bitcoin mining , that increases the more we have computational power on the Network, last year alone the difficulty more than tripled:
the above means that you will be earning one third of what you earned end of y1 in a declining pattern and 1/6 by end of Y2, for sake of simplicity, we will split those into 4 month earnings decreases by 50%: so by end of year 2 your rough total revenue of XBTs will be: 0.0166+0.0083+ 0.0042+0.0021+0.0011+0.0006 = 0.0329 XBT or 83.56$ at constant start XBT price..
Roughly, we are in a loss here of 6.44$, if you buy today 90$ worth of XBTs , you will end up more profitable than having a cloud mining service...
Think more :)
Mike