I've been thinking about the reinvestment method and I'm starting to have my doubts about it. As far as I understand, when you reinvest automatically what the system does for you is to create a new one year contract for the amount earned on that day. This means that if I'm reinvesting every day for the full duration of the initial contract, at the end of it all what I'll have is 365 one year contracts; and each day one of those contracts will expire. That is, the reinvestment contract that I did on the second day will expire one year and one day after the initial contract was open.
If after a year I stop reinvesting, what I think will happen is that each day I'll see how the hashing power will start declining as each day one contract will end. As I'm not reinvesting anymore, I'll start seeing payouts every day, the first payout corresponding to the maximum hash power accumulated over a year, the second a slightly smaller payout as one contract would have terminated already, and so on...
So the first day of the second year you will get the biggest BTC payout but each day it will start decreasing until the end of the second year that you will receive no BTC.
I have prepared a spreadsheet in google docs with the simulation for one year reinvesting and one year cashing out.
https://docs.google.com/spreadsheets/d/1odkPFjBg867O01UTuBmNttuDqefBy3pOsKUb-GFBn5g/edit#gid=1740029288
It does take into account the fees, but it does not take into account the BTC price (which is unknown obviously) neither the difficulty increase. Maybe we could assume that the diminished payouts due to the difficulty increase will be compensated by a BTC price increase, but that is a big assumption.
In that simulation, the final return of an investment of $1100 would be $53122. It is not a bad return at all, but it is a big gamble in my opinion because we have to unknown variables, the difficulty and the price of BTC, plus a "long" investment term (2 years) which in crypto is probably more like 10 years in normal markets.
What do you think? are my calculations correct?
Let's see now what has happened today
This is the update on the account history for the two days:
Payout 0.00066106 (@14000 = 9.254) this time the 50/50 allocation to Antpool / BW didn't work that well, so maybe sticking to the pool recommendations from the spreadsheet.
When we take into account the fees (0.00013355) the net payout is 0.00052751 ($7.385).
My current hashrate is 5.25 TH/s:
The best pools today:
So it says 100% BW and this time I'm going to follow it :D
Today the earnings per month have decreased! It says $274.71 per month (before maintenance fees)
The calculations done taking into account fees:
So 4.96 months to recover, too close to my 5 month limet :(
What do you think? Is it worth it?
Please leave your comments below!
If you want to try investing in cloud mining like me please use the link below and I'll get a few bucks for the referral... everything helps! :D
https://hashflare.io/r/70E314F
History:
- BTC price fall: can additional hashrate compensate it?
https://steemit.com/cryptocurrency/@freedomvigilante/btc-price-fall-can-additional-hashrate-compensate-it-day-7-of-bitcoin-mining-in-hashflare-5-23-th-s-usd1150 - Day 7 of Bitcoin Mining in Hashflare [5.23 TH/s = $1150]
- Day 5 and 6 of Bitcoin Mining in Hashflare: 5.18 TH/s
https://steemit.com/cryptocurrency/@freedomvigilante/day-5-and-6-of-bitcoin-mining-in-hashflare-5-18-th-s - Day 4 of Bitcoin Mining in HashFlare: the effect of bitcoin price drop. Hashrate 5.07
https://steemit.com/cryptocurrency/@freedomvigilante/day-4-of-bitcoin-mining-in-hashflare-the-effect-of-bitcoin-price-drop-hashrate-5-07 - Day 3 of Bitcoin Mining in HashFlare: earnings rate increases. Hashrate 5.07 TH/s
https://steemit.com/tag/@freedomvigilante/day-3-of-bitcoin-mining-in-hashflare-earnings-rate-increases-hashrate-5-07-th-s - Day 2 of Bitcoin Mining in HashFlare: first results, time to break even. Hashrate 5.04 TH/s https://steemit.com/cryptocurrency/@freedomvigilante/day-2-of-bitcoin-mining-in-hashflare-first-results-time-to-break-even-hashrate-5-04-th-s
- Day 1 of Bitcoin Mining in HashFlare: would it be profitable? Investing $1100 initially
https://steemit.com/hashflare/@freedomvigilante/day-1-of-bitcoin-mining-in-hashflare-would-it-be-profitable-investing-usd1100-initially
Other interesting posts:
- Do we create our own reality? What is reality?
https://steemit.com/meditation/@freedomvigilante/do-we-create-our-own-reality-what-is-reality
This article took me some time to compose, please support my work by upvoting and following me if you are interested in the subject so I get incentivized to publish more, I also post about health and politics ;)
Thanks for sharing such a nice thought, I am really impressed. Upvote and follow for you.
very nice article/research. Id say at worst after 2yrs you break even unless btc literally goes under. Which wouldnt be far from holding it in cash for 2yrs..... But if BTC even just stays relatively even then you would make a nice return. But if it climbs like we know it can you could possibly retire. Its a little risky but every investment is. Sounds interesting how you planned the 2yr term though. i might have to think about that.
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