Update / tldr: Cloud mining is generally not profitable or is just an outright scam. Proceed with caution.
I recently started cloud mining with Hashflare to help diversify my crypto investments. I’m working on a post about diversification, but I think it’s important for anyone getting started with cryptocurrencies to spread their money out. With the newfound popularity of Bitcoin and other cryptos, there are lots of scams out there. Everyone is trying to make a buck from our ignorance. Never put all of your money on any one site or into any one cryptocurrency. There are just too many horror stories of exchanges or other crypto services disappearing or outright skipping town with their customers’ money.
Anyway, I’m researching all of the various ways to make money with cryptocurrencies and cloud mining is just one of them. We will certainly investigate the differences, but for now I’m just going to show what I’m doing on Hashflare.
When I first started, I spent $150 for 1 TH (TeraHash) of SHA-256 mining power. (SHA-256 is how you mine Bitcoin and a hash is a measurement of processing power.) This amount will make you about $2 per day. At about $60 per month, you’ll have your money back in less than 3 months. HashFlare recently limited their contracts from “lifetime” to 1 year which really upset their existing customers. They are justifiably upset, but I understand the business decision. The equipment and probably even this entire industry has a finite lifespan. To think you could buy a lifetime contract for this stuff is just a bit naive. So, you make your money back in 3 months and have 9 months of profit. On a $150 investment, you end the year with $730. After accounting for your $150 investment, you profit $580. That might not sound like the 10,000% increase you were thinking, but it’s more than you’ll make in just about any traditional investment.
Once I got the bug, I kept putting more money into the account. (Mostly from prior Bitcoin/crypto profits.) So, now I’m up to 6TH for $900. Sounds like a lot, but I’m currently making $16 per day. Honestly, $16 per day doesn’t sound like much, but that’s $480 per month. In 60 days I will more than have paid for my investment. In the remaining 10 months, I’ll profit about $4,800. At those profit levels, I just can’t make the case to not invest more money here.
My actual dashboard is below. The hashrate has updated to 6.09TH based on my latest purchase today, but the revenue estimate hasn’t yet updated.
My only warning would be that there is almost no transparency on this site. Many people swear by HashFlare and note that they’ve been around for several years. I say…yeah, Bernie Madoff was around for several years as well. As I warned above, never put all of your eggs in one basket. Some of these sites are so sketchy that I would almost assume my money is gone as soon as I invest. The only thing stopping me is the incredible upside. My recommendation is to get in at an amount you’d be comfortable losing and withdraw as soon as your balance meets the minimum requirements.
So, if you like making 3 to 5 times your money in a year, give Hashflare a try. And if you would like to support me and this site, please use the links on this page. If you sign up through them, I’ll get a small referral bonus. Always appreciated.
Stay tuned for a revisit when we talk about the reinvestment option where you can compound your daily earnings. That’s where this math gets really crazy.
** Update Jan, 3 2018 **
With the price of Bitcoin dropping and the difficulty increasing, my earnings outlook wasn’t looking as good for the next year. However, the market recovered and my earnings are back up to par. Not quite as good as they were but still a respectable return on a sub-$1,000 investment. *Note that prices have gone up from $150/TH to $220/TH. So this would now cost about $1,430. Still profitable though.