Cloud mining is divestment!

With the low Bitcoin prices the cloud mining bubble has finally burst. Many operators have closed doors due to lack of profitability while others such as GHash.IO have their contracts under a temporary (?) freeze.

However, we found out that Mintsy, a joint mining op between Cryptsy and DigitalBTC, is still operating. Here is a quick review of their contracts:

SHA-256
100 GH/s during 60 days for $19.
Mining revenue at BTC’s current difficulty = $14.78
Profit = $−4.22

250 GH/s during 3 months for $59.
Mining revenue at BTC’s current difficulty = $55.44
Profit = $−3.56

Scrypt
10 MH/s for 3 months at $59
At LTC’s current difficulty = $42.36
Profit = $−16.64

Conclusion: buying one of these is nothing more than money waste. Better give it to a charity ;).

Now we may ask: Why is Mintsy still selling these contracts? Perhaps they expect people to buy them for speculation purposes, in order to resell after a new Bitcoin price rise. There are actually signs of a possible Bitcoin price trend reversal on the medium term. Though things won’t change much on the mining market. All these frozen mining ops have rooms filled with mining gear waiting for better times. Thus, if in fact the long downtrend is over, prices will soar but difficulty will rise accordingly. You can only expect some profit if Bitcoin goes over the $650 mark. Good profit can only come if it rises quickly to $1000, a point where reconnecting all the idle mining hardware won’t be enough to drive back profitability.

But hey, if you believe Bitcoin is going back to new highs, why don’t you just buy Bitcoin directly?