Abstract
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There are multiple sources and reviews indicating that cloud mining does not work as intended. Yet steemers still put their promotional content here. While their articles are legit in some ways. Please think twice before accepting any "profitable" mining plan.
This article is focusing on cloud mining business and in specific Genesis Mining.
But first, I need to emphasize that Genesis mining is not a honest company (well at least not a big scam) that does not really give you the amount you actually deserve. I bought an extremely small amount of cloud mining plan in Ethereum and the amount I received was in large depreciated with the independent website(https://etherscan.io/ether-mining-calculator).
**To verify my has rate is 3.2 MH/s, please see the picture at the end of this article, I don't want to duplicate figure in this article.
The difference in mining payout between an independent official calculator and Genesis mining can be up to 35%
Set aside all the business scam, the real problem is in the mining difficulty.
1. Exponential increase in mining difficulty
Promoters often calculate break-even price to show how easy a mining plan could make a profit. However, the calculations always assumed that mining difficulty remains unchanged.
I have to reiterate that mining difficulty is the most important factor a user/miner should consider.
A mining plan in Genesis Mining lasts for 2 years and the mining difficulty increases 3-fold already. How are you supposed to break-even if your mining amount decreases by 66%?
Detail calculation is investigated and posted by the community here:
https://99bitcoins.com/genesis-cloud-mining-review-scam-legit-investment/
The logic here is: Even though coin price / market cap is volatile and catching our attention, it's mining difficulty that we should investigate before making a mining contract
2. Proof of work (mine to get coin) will be depreciated (or simply cancelled)
Popular currency like Ethereum will not be solely supplied by miner, as the entire crpyto environment is changing. In the future (actually by the end of this year), ETHER can be generated by both miner and coin holder.
This is known as Ethereum Ice Age, or the formal name Proof of stake. The margin of ethereum (for the miner) is going to be shrinking a lot.
3. Mining plan is not flexible
Genesis mining claims the option for users to switch from one to another currency whenever appropriate. I have contacted the customer service and understand that this is only partially true. In the mining allocation page, a panel is given for you to "switch" hashpower to mine another currency. But all of you may notice that there is word "(AUTO)" near the currency name. What does that mean? Fortunately customer service does not hesitate to provide the correct answer, and I quote
"You cannot mine STEEM directly with any of our contracts, but you can get payouts in it ... ETH coins are mined and traded at payout time to STEEM. "
There are a lot of Steemers promoting cloud mining service and I have no idea how far this article can reach. But if you come across this article and read through here, please resteem this article for a better awareness in this community.
For other steemers who want to promote cloud mining business, you can. I mean, everyone has the freedom of choice and incentive to do anything. But at least try to disclose the risk and show honesty.