CEX.IO Bitcoin Mining Return on Investment Calculation

Latest Update: September,11, 2014

The Bitcoin Difficulty is now at: 7428630902.
BTC mined per GHS/day approx.: 0.0000184447389 BTC
Maintenance Fee: 65,69% of BTC mined;
Price for 1 GHS: around 1.80 USD/GHS – good way to compare with other options see
https://tradeblock.com/mining/ – This price for 1 GHS in USD seems to be mainly driven by the cost for the KNCMiner Cloud Mining Price USD/GHS.
To calculate the price for 1 GHS I use the price for BTC in USD and the price for 1GHS in BTC on Cex.io.

The Bitcoin Difficulty is now at: 23844670039.
BTC mined per GHS/day approx.: 0.0000246935218 BTC
Maintenance Fee: 48,72% of BTC mined;

The Bitcoin Difficulty is now at: 19729645941.
BTC mined per GHS/day approx.: 0.0000286744BTC
Maintenance Fee: 36.25% of BTC mined;

The Bitcoin Difficulty is now at: 17336316979.
BTC mined per GHS/day approx.: 0.000024091995706 BTC (includes maintenance feed)
Maintenance Fee: 30.36% of BTC mined;

The Bitcoin Difficulty is now at: 16818461371.
BTC mined per GHS/day approx.: 0.0000271791429 BTC (includes maintenance feed)
Maintenance Fee: 57.34% of BTC mined;

The Bitcoin Difficulty is now at: 13462580115.
BTC mined per GHS/day approx.: 0.000036195 BTC (includes maintenance feed)
Maintenance Fee: 40.7% of BTC mined;
Next Bitcoin Difficulty change in approximately 5 days

The Bitcoin Difficulty is now at: 11756551917.
BTC mined per GHS/day approx.: 0.0000399844 BTC (includes maintenance feed)
Maintenance Fee: 30.85% of BTC mined;

The Bitcoin Difficulty is now at: 10455720138.
BTC mined per GHS/day approx.: 0.0000581341461852 BTC (includes maintenance feed)
Maintenance Fee: 27.5%; 503 USD/BTC is used to calculate the maintenance fee in BTC.

Each time the bitcoin difficulty goes up 1 GHS will mine less bitcoins.
Accordingly the prices for 1 GHS on CEX.IO will go down.
Use a mining calculator to calculate the difference before and after the change in bitcoin difficulty. Cex.io recommends this calculator.
The next change of the difficulty is estimated in 10 days.

Change of Difficulty Difficulty Price 1 GHS before Price 1 GHS after
April 29, 2014 8,000,872,136 April 27: 0.0079 April 30: 0.00689
April 17,2014 6,978,842,650 April 15:0.01023 April 17: 0.0092
April 5, 2014 6,119,726,089 April 2: 0.012 April 6: 0.0115

Prices of 1 GHS can actually drop also before the new difficulty will start.

Additionally there is a maintenance fee for each GHS.
It is calculated each time the owner receives a reward (mined bitcoins).
At the moment it is at around 30.88%. This is not an exact percentage that will substracted each time. Sometimes it is less than 10% sometimes more than 100%. See below for more explanations.

Currently the price for 1 GHS today on CEX.IO  is 3.2 USD (0.0071 BTC / Bitstamp: 450 USD / BTC). If you buy a KNC Miner with 3 THZ for 13 000 USD you will pay 7 USD/GHS which is higher than 3.45 USD/GHS on CEX.IO . However on CEX.IO you do not have to look after the equipement and you can sell your GHS at any time. The price for 1 GHS used to be 4 times higher on CEX.IO versus bying your own equipement now it is down to 0.5. At this ratio you are better of trading GHS on CEX.IO .  See the watch out below before you make your decision!

It looks like prices on CEX.IO will still go lower. One of the reason is the maintenance fee for mining at CEX.IO. During a day of mining it can happen several times that the fee is higher than the reward. Thus an amount is substracted from your already mined BTCs. The maintenance fee is calculed based on the BTC/USD exchange rate. CEX.IO uses the average price of 503 USD (see  maintenance fee  ) to calculate the maintenance fee per share. If it takes several shifts to mine a bitcoin it can happen that based on the number of shares you have as miner in the round that the fee is higher than the return. So you are actually losing money in this round. At the same time when the bitcoin difficulty increases you will have a smaller return, because the number of total shares will increase and thus the ratio between your shares to the total number of shares will decrease.
The following formula is used to calculate the maintenance fee:
26 cents (USD) / 30 days (month) / 24 hours / 60 mins * amount of GHS * block duration

Watch out: At some point in time a miner will have more and more negative rewards. Therefore the price for one GHS needs to drop further so people will increase there shares in order to have a postive return. Now the question how long can it go until CEX.IO (Ghash.io) is out of businesss, I do not know. The question is also if people in the exchange willl pull all their investments out if this happens and then the exchange will crash.

Status of my investment in January: I am below my investment due to the drop in prices per GHS on CEX.IO. Please see the list of cautions at the end of this post. Additionally from time to time the mining fees are higher than the reward so it will drain on my already mined bitcoins.

March 2013: An Interview by the CIO Jeffrey Smith. Now CEX.IO offers futures on GHS Mining.
For tomorrow April 26th 1 GHS is now at 0.0079 BTC and for 26th of May, 1 GHS trades at 0.0041 BTC. Today the price for 1 GHS is at 0.00793 BTC.

Status 20. January 2014: As it stands of today I am about to make around 199% on my investment in Bitcoin Mining at CEX.IO .
On the platform CEX.IO you can instantly buy so called hashrates (GHS) of computer mining power or if you do not need those sell them again.

I bought 1 GHS on January 17th and after 3 days mining I am currently at a 199% return of my investment. I paid 0.0455  BTC for 1 GHS. And I will continuously update the calculation.

At CEX.IO you are not only mining Bitcoin BTC but at the same time 3 other cryptocurrencies are mined. These cryptocurrencies are Namecoin NMC, IXCoin IXC and Devcoin DVC.

After 72 hours of mining I have:
0.00073126 BTC
0.001148024 NMC (Namecoin)
0.00578684 IXC (IXCoin)
0.21625056 DVC (Devcoin)

After converting the NMC (exchange rate on CEX.IO) and the other cryptocurrencies IXC and DVC (exchange rate on www.cryptsy.com) into BTC I mined so far 0.00074321.
Based on the current amount of BTC mined I would make a 199% return of my investment in 1 year. What I have not calculated is the effective interest rate. The payouts of the mining is immediately, therefore the effective interest rate should be above 199%. As you have a constant payout of the BTCs mined – a fraction at least once per hour, the payout now has always more value than if you get paid in the future. As an example if you invest in shares and hold them for a year you will only get paid once per year the divident of the share and only realize any gains of the share price after you have sold you shares.

Also if I would sell my 1 GHS now I would also make a small return as the current price for 1 GHS is now at 0.04367. Plus if I would change the BTC back into USD I would make an additional return as the rate for BTC against the USD recently went up.

Before you get too excited there are some words of caution.
Please consider these risk factors:
With the increase of mining power added continuously the return from mining Bitcoins BTC with 1GHS could decrease over time. This might be the case also for the other cryptocurrencies.
The value of 1GHS can decrease.
The value of 1 BTC can decrease against the FIAT currencies.
Theft. Your account could get hacked.
The provider needs to stop services due to legal constraints or goes out of business.
Your assets are not secured nor is the legal framework fully cleared.

Also consider there is 0.0001 BTC fee for withdrawal of BTC from your account at CEX.IO.

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2 Responses to “CEX.IO Bitcoin Mining Return on Investment Calculation”

  1. Avastar Says:

    Cex.io is a BAD investment. Look at the ROI over the last month. Share price has dropped 50%.
    Buy 1Thash for 24btc 1 month ago, mine 7btc, pay 1btc in hosting fees, and then sell it today for 11.8btc.
    You just lost 6.2btc (-25.8%).

  2. popubiz Says:

    Reblogged this on Cryptonest .

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