Most people hear about the great returns you can get with bitcoin and having a passive income mining coins is something that almost sounds too good to be true. It’s basically printing your own money so to speak.
But mining coins is a bit technical, your profit depends on how much you pay for electricity, the mining pool and your hardware. So to avoid all this hassle people are looking to buy into cloud mining. Basically you buy from a company that configures and sets up and maintains mining rigs for you at a set price per hashing rate. Of course this comes at a price and your return is lower than if you handled all the mining yourself.
One question I get a lot is but why would cloud mining companies sell to us if they could just mine for themselves? For sure they mine for themselves too but a company needs to pay taxes in fiat money, dollars or euros and cryptocurrency although you can exchange it for fiat money is highly volatile. Imagine the scenario where bitcoin collapses to half it’s current price, it has happened before and most likely will happen again before going up again. Now in this scenario, they invest in expensive hardware to get a negative return on investment. So in order to spread the risk they sell future earnings in crypto to you. This way they spread their risks over their clients and they can upgrade and expand their operation without being too affected by the volatility or without having to loan money at the bank.
Cloud mining is risky as there are plenty of ponzi schemes doubling up as mining companies. Do not invest your money into just about any site that has the words cloud mining on it. I’m gonna refer to genesis mining which is a reputable could mining company with a solid track record of over 2 years with real mining equipment in Iceland.
Most people that invest in cloud mining lose money and call it a scam. Basically they underestimate the increase in difficulty and the maintenance fees that eat away the profit making it almost impossible to break even.
So how do you make money with cloud mining? Is there a strategy to be succesful? YES THERE IS!
As mentioned there is the problem of increased difficulty over time. In order to offset that difficulty you need to reinvest your earnings to buy more hashing power. Of course if all you can invest is $200 don’t start it’s not worth it. If you go into mining go big. Invest at least 2K or more. This guarantees daily pay-outs.
Lets explain this in an example:
Currently at Genesis a
2 Years Monero Mining contract of 5000 H/s using the cryptonight algorithm
On www.coinwarz.com we can calculate our return on investment. To do so we put our investment as hardware cost and put pool fees and power costs at zero since these are already included in the purchase price at Genesis.
At the current difficulty we are break-even before the end of the year. On a 2 years contract we more than double our investment. However difficulty is not constant but variable and usually goes up over time. So return will most likely be less. However with increase in difficulty we usually have increase in value of the coin and this offsets a lot of the losses due to difficulty changes.
So how do we prevent losing money? The secret is compound interest. As you can see our monthly earnings are $420 dollars this allows us to buy more hashing rate every month. This buys us about 500 H/s per month changing our total hashing rate to 5500 H/s. This ups our monthly earnings to
$462.20 And effectively allows us to overcome the difficulty. If we keep on doing this every month we effectively are increasing our monthly return and we’re staying ahead of the difficulty changes while our coin gains in value over time.
The strategy is to keep compounding until we make over 1K month or more depending on your goal. After that reinvest 80% take out 20%. Every new investment runs for 2 years from the purchase date. This strategy allows you to create a steady monthly income that eventually becomes as high as your initial investment but keeps paying out every single month. You might have to switch coins or tweak strategy as time goes by but it’s perfectly possible to generate passive income.
Don’t believe me? Watch this video.
(The other site the guy in the video mentions beside Genesis is Bitconnect for more info about this site check my other article -> click here)
If you found this strategy useful and you consider investing in mining crypto you could get a 3% discount (see link below) and copy my successful strategy.
I only recommend these 2 because others have turned out to be scams and these 2 have been operating for 2 years+ without a problem. We also know Genesis has real miner hardware as we know from their facilities in Iceland (see video higher up).
Largest Cloud Bitcoin Mining Company | Genesis Mining
Bitcoin is the currency of the future & Genesis Mining is the largest cloud mining company on the market. Mine bitcoin…www.genesis-mining.com
If you rather invest into Hashflare instead of Genesis.
Register | HashFlare
hashflare.io
