Cloud Mining or Buying Bitcoin: What is more profitable?
Updated: Feb 16, 2021
I spent a lot of time refining my calculator to answer this question.
Today we will compare when is it better to:
Just buy bitcoin on crypto-exchange
When to use cloud mining contracts
When buying contracts for cloud mining, you need to understand that the level of profitability that is at the moment will not last long and will change.
Before writing my calculator, I analyzed the difficulty changes up to May 2017, and I got a lot of calculations on the basis of which I make assumptions about the future changes in network difficulty.
I calculated the average period between difficulty changes - it is 13.55 days.
The rest of the calculations of the average values of changes or statistics by year were needed to understand what level of growth in difficulty to set the calculator every 13.55 days.
I decided not to choose any one value, but to make 4 scenarios for changing the difficulty:
Very, very optimistic (0% no increase in difficulty)
You will see them later in the calculator, this is the most important thing I did. Due to the set values of the difficulty growth, you can REALLY estimate the profitability of mining contracts.
My cloud mining calculator
Now I will post a screenshot with my calculator and we will analyze every line of it.
I use Bitfinex exchange rate
The amount of money we want to invest
The amount of bitcoin that can be bought at this price on the exchange
Cloud mining contract
Price for 1 TH/s in this contract (automatically loaded)
Your discount, if you have a promo code.
The amount of hashpower you want to buy
The amount of money we want to invest #2
Accruals for the last day for 1 TH/s
Maintenance cost (automatically loaded)
Duration of the contract
And further in the table there is an analysis of the amount of charges for such a contract in 4 scenarios of increasing difficulty.
Diff. change per period - I can set any value I see fit.
Revenue - amount of accruals for the entire period of the contract
Profitability vs purchase - The percentage of how much more profitable or not it is to buy a mining contract compared to buying bitcoin for the same amount on the exchange.
Days to Payback vs Purchase - the number of days after which you will have the same amount of bitcoins on your account as in a regular purchase on the exchange. Then there will be profit.
Buy bitcoin or buy cloud mining contract?
Calculations are made for the purchase of one-year ScryptCube contracts, and here is the 1% ScryptCube promo code. (may not work at the time of your reading of the article, or vice versa be for a large amount)
As we can see in this screenshot, if you invest $ 999 in the purchase of cloud mining, you will receive 20.6 TH/s, then even with the most pessimistic scenario of growth in difficulty, this will give 47% more bitcoins in a year than buying it now at the current price on the exchange.
On the other hand, not all cloud mining offerings are profitable. An example is the calculation of the profitability of Hashing24 contracts. As you can see in the screenshot, the contract will only be profitable in a Very Very Optimistic Scenario when the difficulty does not grow at all. In this case, it is better to just buy bitcoin on a crypto exchange.
Cloud mining services take advantage of buyers' ignorance about the increase in network difficulty and decrease in payments from purchased hashpower.
You can ask questions about the new calculator below in the comments. Tell me if you need to add any more features to it. Not all cloud mining services offer investment lucrative contracts.
In some situation, it is better to just buy bitcoin, and in some it is better to contact for cloud mining.
I wish you a profitable investment and the right decisions!