Hello fellow miners, cryptos, and strange ones.
Mining cryptocurrency builds in difficulty every single day as the availability and supply of hashrate contribution grows exponentially, even more so lately, as recent media attention has renewed interest in the value behind the blockchain and the demand to obtain the currencies has driven the coin market cap to recent all-time highs.
One way cyber-pioneers are striking their own stake and building their private cache of early currencies, short of direct hardware mining which is becoming less financially feasible, is through the use of 3rd party mining contracts. These contracts allow the purchaser to obtain a rate of hash-power on leased equipment for a specific algorithm on an open-ended or specific duration. Think of this as the equivalent to buying a stake in a gold mine but not buying any of the mining equipment yourself.
One of the most popular mining contract sites, Genesis Mining, provides a simple user-friendly platform for the savvy and greenhorn contract miner to purchase and lease a share of their hardware mining activities. Genesis Mining isn't shy in their transparency and provides the ability to verify their physical mining sites through public release of location addresses as well as company-provided resources allowing prospecting customers to visit the sites themselves as shown below:
The transparent availability of site activity combined with their platform accounting for all payouts and distribution on a daily basis, allows for quite a large amount of reliability in the service and confidence in the customer. However, this doesn't always mean you'll be profitable with your contracts.
Profitability in contract mining depends on an array of variables:
- Initial Cost of Hashrate (Cost-basis)
- Block difficulty of target Algorithm
- Estimation of payout for Duration
Before selecting a mining contract at a specific hashrate, you need to measure the profitability against your cost-basis and decide whether or not the terms of the intended contract will produce a desired ROI. Remember that block difficulty increases almost daily and in a constant state, which will mean when mining at a fixed hashrate, you will see daily variances up and down based on this difficulty. These variances will effect your payouts and will in most situations decline over the duration of the contract:
There are many available resources which you can utilize to calculate profitability on a per-algorithm basis, such as CryptoCompare, which allow you to input the values comparative to the terms of the intended contract. These provide a tentative idea of what you will initially earn but should be used for estimation of short-term production only and you will be required to continually re-revaluate the profitability of your hashrate.
The sad truth is--Genesis Mining contracts won't stay profitable over the term of the contract. At a fixed hashrate on any algorithm you will see an eventual decline until this contract becomes unprofitable completely. Larger initial hashrates can increase the duration of profitability, but in most cases of smaller contracts the term will exceed the return.
Fortunately, Genesis Mining offers the inherent ability for contract owners to extend profitability through the use of their allocation feature.
The simple feature will allow for a re-distribution of the purchased hashing power into a lower-difficulty algorithm of the contract owner's choice. Calculation of the application of their hashrates into a more profitable configuration creates the ability to 're-invest' the cost-basis of a contract that is no longer profitable and provide a continued accumulation of alternative returns for the contract owner. Returns that can actually produce renewed value.
*NOTE: Remember to supply wallet addresses for any desired type of payouts.
For example, a 10 MH/s contract for mining ETH would quickly become unprofitable as the block difficulty grows on Ethereum (dagger-hashimoto) due to recent market capitalization. As the profitability declines, the contract owner can shift this hash-power into another target return. The resulting production on the original algorithm is then converted automatically to the desired output, and based on current market prices, can yield a more profitable return without purchasing a newer expensive contract extending the ability of the contract owner to achieve ROI.
This allocation requires a certain amount of profitability comparison on the part of the contract owner, but provides a large amount of control and allows even small contracts to continue to see return in the long-term, should the owner wish to apply this measure of pro-active configuration. The re-allocation of hashrate can be changed by the contract owner at anytime, and active contract owners can find a large amount of potential measure of profitability in sinking productivity.
This is an often over-looked function on Genesis Mining that I wanted to highlight for all of you that may be new to this sort of 3rd party contracting. I often see people in despair over the quick loss of returns on their smaller contracts and want to garner some interest into how self-configuration can provide a better experience as well as a better return.
Remember fellow Steemians not to despair at declining returns -- Just do your research, diversify, and take control.
@rabbt
Genesis should offer this automatically.
@hotdogs They do, to an extent. If you are running a contract, say 2-year Ethereum contract at 10 MH/s, and the output begins to return a fractional level too low to receive any accumulative gain, GM will convert this automatically to a new algorithm that produce a return for the remaining duration of the contract. However, it's only at this point that GM will tweak allocation.
I think the output has to be as low as ≤ 0.0001 for this function to kick in if I remember the contract terms correctly
Genesis should unlike Omnia mining offers lifetime mining contract. Beautiful thing is when your contract becomes unprofitable, Omnia will automatically assign your hash power to other profitable Altcoins. https://crypto-goldrush.com
Great Article. I do agree that Allocation is a really important thing.
I did a complete Analysis of Dash Mining X11 with 2000 MH if you want to check it out:
https://steemit.com/bitcoin/@hw-enthusiast/we-need-to-talk-episode-2-genesis-mining-x11-deeper-analysis
i am also user of Genesis Mining . profit not stable up down daily
As market prices and block difficulties vary from coin to coin, re-configuring your mining allocation to a coin on a current uptrend can yield better return on a daily basis if you watch the market closely.
If you are mining the ethereum, then try switching the hash power to the ethereum classic. The difficulty is not the problem with it.
what is the best coin to mine on Genesis at the moment?
This again leads back to cost-basis. If you spend a higher initial amount on the contract this could make a more significant return on one algorithm over another. However, the same hashrate on one coin wont produce the same result on another, due to the difficulty in the block at the time and the value of 1.0 coin. You really have to run the numbers through a profitability tool and decide how much you want to spend before choosing one coin or another. If you aren't picky and simply want the highest return, you can determine this pretty easily.
I guess I put the question in the wrong way and you gave me a super complete answer... was looking for something much easier :) Let's say I have 10-20 Mh/s and I care only about generating coins, not the return and the value. What is the coin that I can generate higher in terms of units?
If gross accumulation is your only concern, you only need to compare the hashrate, 10-20 MH/s, and evaluate which block this is most effective against. A low hashrate like 10 MH/s will probably have higher return of whole coins in a fractional algorithm such as DOGE. That doesn't mean you can't apply 10-20 MH/s into LTC or DASH over ETH and see a better return of value, but if return of whole coins are your target then fractional mining is your best avenue.
Though keep in mind, if you have 20 MH/s in an Ethereum contract currently, you are better off switching to ETC as you can yield 0.1256 ETC for the same hashrate as opposed to the 0.009674 ETH this same mining power can give you. This is a good example of how shifting allocation can produce a more desired output based on what YOU want.
I suggest running your own numbers through a profitability tool as seen here : https://www.cryptocompare.com/mining/calculator/etc?HashingPower=20&HashingUnit=MH%2Fs&PowerConsumption=140&CostPerkWh=0.12
Awesome! Thank you very much for the info :)
Also a genesis customer here.
I was thinking exactly the same yesterday and searched for a site which calculates the currently most profitable coin to mine. I found WhatToMine, according to them Z-cash is most profitable right now.
So i switched my BTC power to ZEC. I have more ETH hashing power which is currently mining ETH but maybe ETC is better?
@cryptatomic Monitoring sources that provide comparative data like you see in WhatToMine is exactly essential to forcasting these re-allocations of hash. You made a good move when I input the numbers myself. As of yesterday I switch all my ETH mining power to ETC as well, I like the profitability potential better, especially with the possibility of long-term price increases on ETC.
I recently started to implement a strategy where I reallocate my hash power, depending on the profability calculations at coinwarz.com
@mcoinz79 This is a necessary step to making 3rd party mining successful.
I just bought myself a Dash contract for 1000Mhz. Recovery should be in 4-5 months. I like Dash because there is a limited supply of these X11 miners because they sell out so quickly. So difficulty won't increase drastically overtime. We'll see what happens though but this is my thought process.
@everdaycitizen I have seen that Genesis has placed a 100 MH/z daily cap on the X11 contracts now. Did you have to purchase the 1000 in increments or did you accomplish this in a single order?
Good post, Thanks for the information.
You're welcome.
It's better to just own your own - same with the keys. You can give them all of this money and they can turn it off. If you have miner, say an s9, you can change pools or even SHA256 coins. The more I learn about Genesis, I think most of the money is in MLM referrals.
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Great post! I was trying to figure this out for a while :)
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