Bitcoin mining at home is something of the past. I often find myself reminiscing about the fact how I could mine some chunks of a Bitcoin with an Nvidia graphics card back in the days. Ever since the big Bitcoin ASICs hit the market, that situation changed drastically, and in the end, a lot of people had to turn their attention to Bitcoin cloud mining. But is that as profitable as some might think?
For this article’s research purposes, we have look at two of the biggest Bitcoin cloud mining services today: CEX.io and ZeusHash. We will determine whether or not any of these services is actually profitable, and where the main differences can be found. After all, no two Bitcoin cloud mining services are alike, and spotting the differences can be the difference between making a small profit or making a small loss on a daily basis.
It is important to note that, when you decide to venture into Bitcoin cloud mining, you have to go big or go home in order to earn something noteworthy. While I know not everyone is eager to invest much money into Bitcoin cloud mining, the mining situation right now requires major funding to set up a mining operation of any sort.
Note from the author : At the time of writing this article, the total Bitcoin network hashrate is at 298,030,024 GH/s. While 1TH/s might sound like a big number to novice users, in the grand scale it represents 0.0000003356% of the actual network hashrate, which means you will earn roughly 0.00000839 Bitcoin per block found by your mining pool. (And even this number depends on several variables)
(Calculations are done assuming there will be a 10% difficulty increase every 2,160 blocks and the Bitcoin price does not increase)
CEX.io – Bitcoin Cloud mining With 1 TH/s
As our first test, we will order 1,000 GH/s (or 1TH/s) from CEX.io, one of the biggest Bitcoin cloud mining companies in existence. In order to purchase Bitcoin cloud mining from CEX.io, users can fund their account with either Bitcoin,Bank Transfer, Skrill (Online Bank Transfer) Credit Card, Litecoin or other altcoins.
Altcoins can be traded against Bitcoin or Litecoin on the CEX.io platform, as they currently support Namecoin, Litecoin, IXCoin, Dogecoin, Darkcoin, Potcoin, Anoncoin, Worldcoin, Feathercoin, Digibyte, USD E-Dollar, Myriadcoin, Auroracoin and Megacoin. In turn, either Bitcoin or Litecoin, along with USD fiat currency can be used to purchase Bitcoin cloud mining hashpower from CEX.io.
At the time of writing this article, 1,000 GH/s would cost you US$230 in fiat currency, or 0.837 Bitcoin, or 130.31 Litecoin. All of these values are worth about the same value in fiat currency, so it’s good to see all markets levelling out a bit. Do keep in mind the Bitcoin and Litecoin values will change according to their actual USD value, but I’m sure most of you are aware of that by now.
Ok, so after making that initial investment, the question is how much we will earn with 1TH/s over the course of a month. Given the rather insignificant amount of hash power we are buying compared to the entire Bitcoin network, you shouldn’t expect to become rich any time soon. Heck, we might not even make an ROI either. let’s do some quick calculations!
For these calculations, I am using the Bitcoinwisdom Bitcoin mining calculator, which you can find here. We put the difficulty increment at 10% after 2,016 blocks have been mined, a hashrate of 1,000 GH/s, US$105/month in maintenance costs (US$0.105 per GH/s per month), and leave everything else unchanged. The result is quite depressing unfortunately.
By purchasing 1,000 GH/s from CEX.io, and mining with them for a month, we would end up losing 0.04403 Bitcoin between now and January 31st, which equals to US$11.64 in net losses already. Needless to say that you will never break even at this rate, let alone make a profit from Bitcoin cloud mining.
But how is this possible?
Unfortunately for CEX.io customers, it looks like the company’s maintenance fees are killing your chances of breaking even before you actually start cloud mining. US$0.105 per GH/s per month is simply too high, and it is really killing their cloud mining business right now. Time to take a look if ZeusHash offers us a better deal….
Note from the author : CEX:io allows you to re-sell your GH:S shares on their trading market, but unless prices increase dramatically, you will still end up with a monthly loss.
ZeusHash Bitcoin Cloud Mining With 1TH/s
ZeusHash does things differently from CEX.io, as they offer Lifetime Bitcoin cloud mining contracts,which cannot be sold back to them or other users. Furthermore, ZeusHash prices are slightly higher compared to CEX.io, as purchasing 1,000 GH/s would cost you US$559, or 2.101 Bitcoin at current rates. Definitely a bigger upfront investment amount!
In regards to purchase ZeusHash cloud mining contracts, this can be done either in Bitcoin or via a Hashcode. Hashcodes are available for purchase from official resellers, such as MinerEU, ZoomHash, BitcoinminerSHOP and others. Depending on the shop you choose, you can purchase HashCodes with Paypal, credit card, Bitcoin, iDEAL, Bank Transfer or UnionPay.
But what about maintenance costs when using ZeusHash? These costs are signifanctly lower compared to CEX.io fortunately, as users pay US$0.0023 per GH/s per day. In our scenario of 1 month (assuming there are 30 days), that means 1TH/s of Bitcoin cloud mining costs us US$69 in maintenance fees. Compared to US$105 charged by CEX.io, we see a US$36 difference for the same hashpower. Odd, isn’t it?
Now in regards to profitability, what does this mean for achieving ROI? After doing calculations (with the same calculator and parameters, with an adjusted maintenance fee mind you), we see that ZeusHash customers achieve a positive return from now up until March 1st. Between January 12th & 31st, users earn US$12.36 profit, which drops down to US$4.86 between February 1st & 28th. Once we hit March however, earnings go in the red on ZeusHash as well, as users would lose US$9 per month.
Regardless of how you look at it, Bitcoin cloud mining seems to be doomed across the board, the only difference is how some companies might make you a bit of money before you start losing funds on a monthly basis. Either way, achieving ROI is simply impossible.