Today I’m going to share my experience with Genesis Mining as a crypto currency cloud mining company. In a nutshell, they allow you to purchase mining contacts which leases their computing power. This is a great option for people who want to mine but don’t want to buy specialized equipment or worry about the additional expenses that come along, like electricity cost, hardware maintenance, software glitches, etc.
The typical questions
The first question everyone will ask: Is it a scam? So far in my experience, I can tell you it’s not.
The next question: How much money can I make? That really depends on how much you invest and what type of contracts are available and the market. I know that’s not a straight answer but keep reading to understand why. To keep you interested I can tell you this much – As of right now my contract is on target to make money. If you really can’t wait to find out the answer, just scroll to the end of the article.
The contracts themselves have changed over the few years. At one point they were lifetime contracts. This was a fantastic deal for the early adopters and probably got Genesis Mining off the ground. However at the time of this writing they only offer contracts with expiration dates. When I signed up about 3 weeks ago, they offered 2 year contracts.
Contract Terms, Fees & Time Period
Purchasing a contract, means you are paying for X period of time and for X hashrate (computing power) and for a specific type of processor and a mining algorithm. This is a flat fee, you pay upfront for a 2 year term (the current contract terms, which may change). When the contracts end, your “lease” of the equipment and processing power are over. If you want to continue you can re-up. If you buy more along the way, that “new” portion of the contract is extended.
In addition to that, some of the contracts have a maintenance fee associated with them. They will charge X percentage of your daily payout which is automatically deducted for you.
Last but not least, some of the contracts also have a loop hole for termination for non-performance. This is where some people may call them a scam, however I think this is more a CYA from a business perspective. If your mining is costing them more in electricity and other maintenance fees than the daily payout, then they are able to cancel the contract. Typically it’s not cancelled right away but after a period of time of non profitability (read your contract). This could happen if the price (value) of crypto currency you are mining starts to plummet and the daily payout can’t cover the fees. This appears to only pertain to the earlier contracts which were life-time or open-ended contracts but read your contract to be sure.
Term’s taken from my contract
Contract (Payment section)
The payment clause in my contract. I highlighted the maintenance part which indicates no fees are associated with this contract.
As a consideration for the Services the Customer agrees to pay to the Service Provider an amount of:
a. 0.829997 USD per H/s one-off upfront payment
b. USD 0 per H/s and day deducted on a daily basis from the generated Coins, called the “Maintenance Fee”
if, on any day, Coins generated on that day do not suffice to pay the Maintenance Fee, the Service Provider may use Coins generated on any day thereafter for such payment.
The provision of section 2b only applies to the extent that the Contract Term is an “open-ended” contract.
This is important and for a novice, you may not understand the implications of the types available. For example, when I signed up the only available contact types were Monero. This is mostlikely due to the type of hardware available. The Monero hashing runs better on nVidia GPU’s, so I’m guessing that was all that is left. Contracts for Bitcoin, Either, Litecoin, Dash and Zcash weren’t available. From my understanding they are adding additional miners but as of this time, Monero is the only thing you can mine on their servers. However not all is lost.
Genesis Mining allows you to buy a contract of a specific type (Monero) but get paid in another type like Litecoin. It’s part of their Advanced Auto-Trader or AUTO for short . The prices (coin to usd) of Monero and Litecoin are pretty close so I decided to buy the 2 year contract on Monero. Buying a contract on Genesis is pretty straight forward however the options on pricing are a bit limited. You use a slider to select your hashing power which affects the price you pay. However the slider doesn’t really slide it basically jumps from point to point and the points aren’t marked. To move the slider, click in the grey area and let the needle jump to a spot. It seems the lowest you can buy is $830.00 worth for 1000 H/s (hashes per second). I did the next increment up at $1079.00 for 1300 H/s.
Buying a contract – Use the slider.
Configuring your mining allocation (how you are getting paid).
Once you’ve made the purchase you can change how your mining payment allocation. Select the Mining allocation option from the left menu. Then Select the type of mining contract. This can be a bit confusing. They show all types, even if you haven’t purchased them. In this case I have a Monero contract, so I need to select the Monero box. Don’t worry if you select the wrong one, you won’t break anything, you will just getting an error when you try to save it.
Once you select the type, you can modify the allocation of what your are getting paid in. By default, Monero will payout in it’s base crypto currency (XRM). It will display 100 (for 100%). I changed mine to payout in Litecoin. Litecoin and Monero are about the same in price so the conversion works out (right now). You can split this up, as long as your total is 100% you can divvy up your payment allocation anyway you like.
To receive your payment you must have a wallet configured in your genesis profile. The wallet type must match the type of your payment, otherwise they won’t have a way to pay you. In the example above I wanted to be paid in Litecoin so I need to add a Litecoin wallet address in Genesis. Since, I use coinbase as my wallet provider, I went to the coinbase web site and created an additional custom wallet, that I can use to track payments. I copied the public wallet key from the coinbase web site and added into my profile on the Genesis-Mining site (My Accounts -> Settings -> Wallets).
Moment of Truth: How much am I making?
I’m making on average $3.50 per day. I know that doesn’t sound like much and as I mentioned earlier, this isn’t a get rich quick scheme, but based on current performance I should make my contract money back in 1 year (or less), then year 2 should be all profit.
For now let’s review. I have a 2 year contract to lease the computing power. It cost me $1,079.00 (one time payment upfront). I’m making on average $3.50 per day. Let’s figure out how long it will take to be profitable: $1,079 / $3.50 = 308. This means, in 308 days I’ll have paid off my contract. That leaves 57 days left in the 1st year plus another 365 days in the second year of the contract (remember it’s a 2 year contract, which I paid upfront and no maintenance fees). This means everything after day 308 is profit. Running the math for the days after my contract is considered paid I have : (57+365) * $3.50 (per day) which tally’s to $1,477.00 of profit.
This is all based on two things. How much Monero I can make in 1 day and then it’s conversion into Litecoin. I’ll want to keep an eye out on the prices and adjust my figures and perhaps my mining allocation accordingly. There’s no guarantee here. If Monero takes off and becomes a success like Bitcoin, this could be a huge money maker or if it just holds stead I should still make some money. If Monero takes a dive in prices, it will affect how much money I’m making, especially if I’m converting it to Litecoin right away. If this happens I should stop converting and simply get paid in Monero. The shares of Monero may go up in the future making it a better deal to keep them instead of converting.
Below is my payout graphs. One taken from the Genesis site and the other from Coinbase, showing my payments hitting their system. I should also note that the first several days of my contract, I was converting Monero into Bitcoin, however I was making pennies on the dollar. So I quickly converted to Litecoin which was closer to Monero’s value. This is why the first several days the chart barely moved. My contract started on 12/8/2017 and will end 12/8/2019.
|My Genesis Mining Payment History. The payment history is cumulative. For example on 12/28, I didn’t make $60, I made $3.25 but over the lifetime of my contract (a few weeks) I’ve $60.00||Seeing the money actually deposited into my Coinbase account each day.|
Taking the plunge?
If you decide you want to try this yourself, you’ll need a couple of things.
2) Open an account on Genesis-Mining.com