Cloud mining is hot these days, but how profitable is it? Especially the Bitcoin mining looks hard to predict, as it is open ended and branded as 'life time'. However, the end date may be sooner than you think. Below are my own calculations, because - as most Youtubers advise - I did my own research. I've looked at Genesis Mining, the site I use most.

Have a look at the data and judge for yourself!

Doing the math

Time to crush some numbers. I'll give you image of my spreadsheet first and explain my thoughts right after that.

Let's look at buying 1 TH/s which costs 150 dollar. We'll set the price of Bitcoin on the maximum price of today, 1,850 USD. In this calculation the price of Bitcoin will not change. I reality it does change, I will take that into account later on.

Let's first find the total income per day. I currently get 0.000471 Bitcoin per day for mining with 1 TH/s. I know that the maintenance cost is 0.00028 USD per GH/s per day, so 0.28 USD for my 1 TH/s per day. Since I know that this translates to 0.000151 Bitcoin based on today's Bitcoin price, I know that I mine 0.000471 Bitcoin per day.

The 0.000471 Bitcoin income per day will decrease over time, the cost of 0.28 USD per day will not. So at some point, the mining will stop because it costs more than it provides income.

So when will that be? Let's look at the second image.

The first column shows the 0.000471 Bitcoin you receive, the second column shows the translation to USD. The next column shows the maintenance cost which is fixed and will be deducted from your mining income. This leaves you with a total of 8.29 dollars of profit (income minus expense) after 2 weeks of mining like this.

After 2 weeks, the mining difficulty usually goes up by 4%. This typically means that for the next 2 weeks, your income will be 4% lower. This repeats every 2 weeks (again: on average). In the table, you see that after 58 weeks your costs become higher than your income.

So what did mining bring you after your contract expires

After 58 weeks, around the time where your contract wil end, you will have gained 101.95 USD worth of Bitcoin. We paid 150 USD to get the contract in the first place. So (on average) we lose about 48.05 dollars!

Sure, but Bitcoin will keep rising in value!

Let's indeed have a look at that, and assume the value will rise and not drop. In fact, let's make it even better: after 58 weeks the value of Bitcoin has become 3,000 USD. The contract will then last a bit longer, 76 weeks. See the updated table below.

So that's 200.71 USD into your pockets, a gain of 50.71 USD. We would have to compare that to straight up buying Bitcoin for 150 USD. This would give you 0.081 Bitcoin today. When the price of 1 Bitcoin rises to 3,000 USD again, you would have 243.24 USD, so a gain of 94,24 USD. Buying Bitcoin would still be more profitable than mining Bitcoin, even when the Bitcoin price is 62% higher.

I tried recalculation with a higher price of Bitcoin to see when mining would be profitable. As soon as the price of Bitcoin gets around 3,500 USD, the contract would be profitable.

Conclusion

Mining Bitcoin could be profitable, but ONLY when the price of Bitcoin increases by a LOT. You may have heard that before, but now you have all the calculations to know for sure. :)

I hope this helped you to find out whether Bitcoin cloud mining is for you. If it did, please like and share so it can help others too!