ViaBTC cloud mining - now with reduced price - best cloud mining offer out there?

The price for cloud mining contracts from ViaBTC dropped from 0.21 BTC to 0.18 BTC pr TH/s of mining power some few days ago - and currently, if the bitcoin difficulty would be steady, the investment will be paid back within a year (that's overly optimistic - but still, the profitability may be jolly good). Right now is probably a good time to buy in - but don't wait for too long, for every day the offer gets like 0.3% less attractive.

ViaBTC takes a 6% cut of the profits (and that includes all costs except electricit), while 94% is paid out to the investors. Quite many other pools and cloud mining operators grab the fee income, ViaBTC includes the fees in the profit figure. I don't think there are other pools out there with better conditions.

There are some things one should be aware of, though.

Cloud mining has a bad reputation

There has been many scams out there - some providers haven't even been running any mining operation at all, just been operating as a true Ponzi scheme, with the initiators grabbing the money and running away as soon as the daily payouts exceeds daily payins. Well, with ViaBTC we can be reasonably sure that they do indeed have mining equipment. I've been in for a while, and have received steady daily payouts.

Also, if a company has the equipment for mining, why would they want to rent it out instead of earning the money themselves? One thing for sure, if an investment offer looks too good to be true, it usually is too good to be true. However, boosting the growth of a mining farm through crowdfunding is legitimate - if the realistic choice is between getting a 6% profit from 100 racks of mining gear or 100% profit from 1 rack of mining gear, then ... yes, cloud mining may be a win-win.

An investment into ViaBTC is a slightly political affair

ViaBTC is mining with the Bitcoin Unlimited software. As you may be aware of, the Bitcoin environment has been split into two fractions, some think that Bitcoin Unlimited is the only way to solve the current capacity problem, while others believe that Bitcoin Unlimited is dangerous and is obstructing progress rather than helping progress. You may want to do some research on this before supporting one side with your bitcoins.

By investing into ViaBTC one is putting more mining gear on Chinese soil - already more than 50% of the hash rate is in China, it would have been better with a better geographical distribution of the mining gear.

There is also the environmental issue - bitcoin mining takes a lot of energy, probably from coal power plants, energy that probably could have been utilized in better ways.

You may not get the full investment back

Hashing power is growing all the time, and the more hashing power there is in the bitcoin network, the less profit for existing equipment.

Consider those scenarios:

• Bitcoin price drops with some orders of magnitude. Your investment will be pretty much gone, even hodling coins would be more profitable.

• Bitcoin price a lot compared to fiat, i.e. to 25% of what it is today. Many miners will turn off their mining gear because they don't earn enough to pay the electricity, mining difficulty will fall. ViaBTC has the most power-efficient chips on the market and quite cheap power contract, so they will most likely still operate - and mine more coins due to the lowered difficulty. One will earn more BTC than the investment, so compared to hodling the coins one will win - but investing in fiat would have been more profitable.

• Bitcoin price stays stable. One will most likely end up better than if one would be investing into fiat or hodling bitcoins.

• Bitcoin price continue growing. This will cause more mining gear to be put online, which again means the difficulty will raise, which again means your equipment will be producing less bitcoins. In this scenario one may not get the full bitcoin investment back - but one will probably still be much better off than if one would have been investing into fiat!

• Some new and revolutionary bitcoin mining gear is put to the market. Your profitability will go down.

• Any other kind of incident that cannot be ruled out; sabotage, Chinese gov't setting the foot down, sharp increase in power prices, fire in the hosting centre, flooding, etc.

"Wallet dust"

Daily payouts is not that good, it causes your wallet to be filled with "dust", it will require a lot of transaction fees when you're going to spend it. Real-life analogy: consider a wallet full of the smallest denomination coins, versus a wallet full of bills. If you buy 1 share for 0.18 BTC, you'll probably end up paying a very significant part of your profit in transaction fees. Not good. However, if you're able to throw in around 4 coins, you'll end up with 0.01 in daily payouts, that's actually useful, and the transaction fees won't be that significant any more.

I would really prefer weekly payouts due to this.

Conclusion

Personally I believe it's a good idea to invest into ViaBTC right now, though don't blame me for any losses; I think you've been thoroughly warned now on the risks.