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BitPay is on pace to process over $1B annually in bitcoin payment acceptance and payouts, and has already grown their payments dollar volume 328% year-over-year, according to a recent blog post on the BitPay website.
The very nature of cryptocurrencies requires transactions to be verified by miners. What does this mean?
And Genesis Mining stands as the largest cryptocurrency cloud mining company in the world.
A user can rent “hashing power” in the form of a two-year contract from Genesis for a one-time, upfront fee.
In turn, they receive daily payouts of whatever specific cryptocurrency they purchased the contract for.
THE PROBLEM
While Genesis Mining has done a great job breaking down a complex problem into an easy-to-understand business model, users consistently have one big question:
“How profitable is {x} contract?” — Everybody, ever
While the user is able to see the upfront cost, they are unable to get an idea of how many coins they will receive by the end of the contract.
WHY THE PROBLEM EXISTS
The problem exists, because of two major uncertainties surrounding cryptocurrencies:
Both of these inputs are extremely volatile, and have a huge degree of uncertainty in the near and distant future.
What I will attempt to do in this exercise, is build a profitability calculator for Ethereum, Monero, and Zcash. Each of these cryptocurrencies is currently available on the website as of 11/7/2017.
Each cryptocurrency has three contracts, and I will formulate 4 different scenarios to try and capture a profitability “range”.
Note: Do not take any of the words in this post as financial advice or recommendations. These are merely simulations that have their own issues and pitfalls, and are not to be used as the end-all, be-all decision.
THE ASSUMPTIONS
Due to the difficulty in forecasting both price and nethash, I was forced into a few assumptions:
Obviously any slight change could drastically alter these assumptions, but let’s take a look at the different scenarios.
Instead of calculating just a base scenario (which every other calculator on the web does) I wanted to come up with different scenarios to get an idea of what could be.
Aggressive — The same as Median, but instead use a price forecast that is 1 standard deviation above the median price
https://medium.com/spreadstreet/is-genesis-mining-worth-it-a-genesis-mining-profitability-calculator-youll-actually-use-a06d916bf7bc
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