Cloud Mining? Are you kidding?

Couple of miners offer cloud mining contact and mentioned you can just invest a little and get unlimited continence BTC mining income. It seems right cause you can save big money to buy mining machine, cooling, setup & maintenance, or even do not need a computer, all fixed by click a button on your smartphone and pay. Attractive? but there have some invisible risk that the seller would not tell you. Please see below example before you decided to click the button...

This is a real return from a cloud mining contract, invested value was BTC1.5618, around HKD30000 or USD3,850. What you can see is daily return keep dropping, you may ask why the return dropped from 0.0055 to 0.0039, it looks crazy. The reason is the handling fee or electricity fee or maintenance fee are calculated by USD (for this contract is USD6.6 a day), and BTC/USD keep drop last week so the handling fee increased a lot.

And the other reason you may discovered is the raw mining return seems also dropping day by day (sometime high and some time low but obviously decreasing), you may already sensed the major reason here why cloud mining contract is not a smart way to invest - difficulty! Difficulty is keep raising and it won't return like handling fee, it is not affected by pricing movement but only raise every 2016 blocks.

As of now, you may still thing the cloud mining contract is lifelong contract and just with a slow return. Is it really lifelong and endless? the contract would end actually when the mining return cannot cover the handling fee, so when would it happen?

Above calculation assumed bitcoin price do not change from today and difficulty raise 0.3% a day which is a optimistic assumption, it showed the contract will dead on 29 April 2018, the Day 299 from the first investment day. And the accumulated return is BTC0.5423785, which say the return cannot cover the initial invested amounts BTC1.5618.

Let's try some more optimistic assumption, bitcoin price raise 0.1% a day and difficulty raise 0.2% a day,

Looks better, longer life to 18 Nov 2019 the Day 867 from first investment day, and total return is almost BTC1.1959. Seems profitable cause bitcoin price raised more than double.

OK, one question, why don't you buy a real bitcoin at exchange and keep it in your wallet till end of 2019 if you assumed the bitcoin price will double up?

Be a smart investor! Cheers!