How are you calculating ROI for cloud mining?

To all those who have purchased or are considering purchasing cloud mining contracts...

I am trying to get a thread going on what your expectations are and if you had any sort of ROI formula that you are using for cloud mining...

Even if you have no formal ROI and are just speculating on future price, all feedback is encouraged

Here's my calculation. Check out my google spreadsheet

I looked at the Ethereum mining participation one-month after launch to get an idea for what the ZEC mining participation will be. It's about 350 GH/S.

I figured everybody was using 290x GPUs. They get 22 MH/s according to here

This puts the network at about 16,000 290xs one-month in.

In ZEC, a 290x is going to get something like 25 H/s, so figure about 400,000 H/s for the whole network.

Depending on your assumptions about ZCash price, that gives different amounts of return for each H/s you own. At a ZEC price of $10, it returns about $5 a month. At a $100 price, it is about $50. During the first month your profitability will be halved on average due to slow-start.

Toomim and Genesis are charging about $100 for 1 H/s for a year. Your break-even ZEC price is about $10 if the mining participation is similar to Ethereum's.

At $100/ZEC, your ROI is 50% per month. Not bad! But of course this kind of ROI is likely to attract more miners and squeeze it down.

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This is great! I hope we get some more responses. I am curious how your spreadsheet compares to others

You will most likely never ROI on this cloud mining because they are way overpriced for what they offer.

Currently the ETH hashrate is 7000GH/s. So that's about ~300,000 GPUs.

If ZCASH mining is 1% more profitable than ETH mining everybody will switch over their miners.

So your 400,000H/s is way too low. If everyone mining ETH switches over and the GPUs all average 25H/s then that's about 7,500,000 H/s for the entire network. Lets say only half switch over. So 3,750,000.

So with $100 for 1 H/s.
Your hashrate % would be 1/3750000=2.6667e-7

50Zcash per block * 6 hour * 24 = 7200 day * 30 = 216,000 per month.

So 1H/s would make you 0.0576ZCASH per month. In 1 year 0.6912 ZCASH.

So to break-even you would have to sell your ZCASH for $144USD.

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We'll see what the genesis hash rate will be, but very few large ETH mining operations will outright switch in the first few months since the price hasn't been established and won't be until ZCash is listed on some exchanges.

It's worth noting that ETH is currently the most profitable coin to GPU mine, and it's not obvious why ZCash would necessarily be more profitable.

This was good, you brought up some good points that I hadn't considered

Its not just the ETH miners who are going to switch if Zcash becomes profitable. Other coin miners as well and you can only imagine how tight the reward will be. Your figure is still very conservative.

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Fraction of current Eth miners switching to Zcash should increase linearly along with the slow-start reward increase...

After 1 month I expect a decent fraction, from 10% to 50%, to be on Zcash.

Don't think so ..., there is currently no stable GPU Mining SW out there. Also ETH got market cap over 1 billion dollar, ETH is a trustworthy currency which defended all attacks currently running @ ethereum.

You got right in middle 2017 when ethereum change to PoS and Z-Cash is successfully then they will change ...

I could see the recent set of attacks pushing more miners to zcash . Plus Ether isn't really a store of value like Bitcoin or potentially Zcash

Great thread but also a lot of conjecture. One thing we know is that Cloud Mining operations historically leave you little to no profit. So if you are really looking for a profit you need to set up your own rig or divert what you have now. That is if you are lucky enough to have a rig(s).
Plus - rewards will initially be stepped. That is going to dampen the profits of early adopters who historically do well on initial coin offerings. But it will still be fun.

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I am going to listen to this tonight but this worries me

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I love speculating! I think we're going to see massive mining migration from other coins very early.

My thoughts (already posted on another thread):

"Day 1: 20-30kH/s
Day 15: 80-120kH/s
Day 30: 200-300kH/s
Day 60: 500-750kH/s
Day 90: 750-1000kH/s

I think the price taking off in the earlies (due to hype) will attract a lot of miners.
After day 90 when the hype (and price) dies down and the hashrate goes up, price and hashrate should level off somewhere between $8.00 & $10.00 per ZEC.

In those first 90 days though... We are going to see more intense fluctuations than I think we've ever seen in the market. All the real and fake news/rumors. "DNMs adopting Zcash!", "Trusted Setup not so trustworthy!", etc, etc.."

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You're right. But think about they got large rigs. If they don't join public pools and make his own pool you're going to fight against a gigant...

Also I don't buy Hardware for over 10K $, before I know there will be a mining Software which run stable and fast, and not burn my house down :wink:). So in my opinion its bit more risky to buy cloud mining, but if GM're unable to mine I will get full refund. If I buy Hardware, (AMD) they are useless if not working stable for zcash.

And if the price after 3-4 Month under 8 dollars, its anyways hard to make profit no matter if you're on cloud mining or running your own rigs.

just my 2 cents

"This is what scares me about cloud mining. It sounds like an R9 290 will hash 25 H/s. They cost about $200 a piece. I envision the hash rate just burying any hope of making a decent number of coins with less than 100 - 300 H/s."

This was posted in another thread and if it's true it's worrying as you'd have to spend tons to be able to get a good ROI with cloud mining.

@redembr: So then would you think AWS is a fair option?

Genesis Mining just doubled the hashpower... we need to recalculate ROI based on the new pricing. :dollar: :dollar: :dollar:

They'd be leaving the most profitable GPU coin to mine for a coin with no stable open source software release and would be competing with farms who've been optimising their GPUs for this project. Really can't see this happening, or at least certainly not for long.

What's worrying about people being rewarded for work?

Surely any predictions of ROI based on expected price are just like astrology or something. In otherwords educated guesswork? You just have to look at the long term price charts of a few coins on coinmarketcap.com to see how wildly different they can be. Zcash has a lot of "hype" but it hasn't even been proven to work yet.
I bought 5h/s from Genesis because you have to be "in it to win it" and I will attempt mining Zcash if it's worth it - I already have about 300mh/s in Ethereum mining rigs, but predicting the ROI now is pretty much impossible IMHO.

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