Genesis Cloud Mining Review – It’s Not as Profitable as You’d Think

Last updated on April 12th, 2017 at 09:39 pm

About every other Bitcoin question I get is “should I invest in cloud mining?”

I’ve talked a lot about Bitcoin investments in the past. One of the things I always tell people who ask me about cloud mining is that I think 99.99% of the companies who offer cloud mining services are probably scams.

Meaning, they don’t actually mine Bitcoins with the money you give them, they only use it to pay out other users until the owners run out of money and vanish. However there is 0.01% of companies who actually do run mining hardware and mine Bitcoins for you. Genesis Mining is one of them.

Genesis mining was founded in 2013 an is one of the oldest Bitcoin companies around. It’s definitely one of the most well known companies when it comes to cloud mining. Genesis has a publicly known mining farm set up in Iceland as shown in this video:

The miners on the farm are able to mine Bitcoin, Ethereum, Dash, Monero, Litecoin and Zcash. However all of the information I brought in this post up until know is somewhat general knowledge. Today I want to dig in deeper into the cloud mining business model and try to answer the question – is it profitable to cloud mine Bitcoins?

Since there are six different currencies that can be mined I want to focus only on Bitcoin cloud mining for the moment since I believe it’s the most popular product on Genesis Mining. Before I begin I just want to mention that I did a previous write up on this matter almost 2 years ago.

How does Genesis Cloud Mining work?

The idea of cloud mining is very simple. Instead of spending thousands of dollars on Bitcoin mining hardware, you can pay someone to lease their hardware and keep the profits to yourself. The company that rents out the miners takes care of the maintenance and all of the hassle of setting them up.

However, you are required to pay a fee for their service but we’ll get to that in a minute. To begin with, I wanted to determine what’s the difference in the ROI (Return Over Investment) between cloud mining and “normal” Bitcoin mining.

At the moment I have 1.19 TH/s with Genesis mining which would cost a new customer around $170 (0.139BTC at today’s exchange rate). This mining capacity generates around 0.00035BTC a day after maintenances are is removed. So at the current BTC price it will take me around 400 days to break even.

In the screenshot below you will see different BTC earnings from different contracts. It took me a while and several emails to the company’s support to understand exactly how revenues are calculated and displayed. I would appreciate it though if the fees were mentioned as well so I would be able to see how big they are in relation to the actual payouts.

genesis mining payouts

each line of BTC payout refers to a different contract. Some of the lines are totals of previous payouts so there are some duplicates listed here. If you’re having a hard time understanding this table (as I had) let me know in the comment section and I’ll do my best to explain.

The Bitcoin cloud mining contract on Genesis mining is “Open Ended” meaning it will run until it stops being profitable. If you take a look at their customer service page you find the exact definition for it:

In the event of a contract becoming unprofitable (i.e. the payout can’t cover the maintenance fee), the resulting daily payout will be zero. After that, the contract will continue to mine for 60 days. This means that we will take care of the maintenance fee in the hope that your contract becomes profitable again. This may happen if the mining network difficulty decreases and/or Bitcoin price increases. If the contract does not return to profitability in this period it will be terminated because the mining machines are consuming resources (electricity, cooling, hosting, servicing, etc.) which cannot be paid with their generated payouts.

I.E. the contract will run as long as it can cover maintenance fees which include electricity, cooling, maintenance work and hosting services. And I think this is the thing most people miss.

Bitcoin’s difficulty has been more than doubling itself every year for the past 3 years or so. In fact, between 2016 and 2017 it tripled. This means that if you buy a certain package expecting a certain reward, in a year or so you’ll probably be getting anywhere between 33%-50% of that reward. In my case I’ll probably be making 0.00014BTC per day a year from now.

Bitcoin difficulty

Bitcoin difficulty rate throughout 2014-2017

So my previous calculation of how much time it will take to recover my initial investment is actually wrong. It would take a lot more than a year, and that’s just to break even. There’s a fair chance my contract will stop becoming profitable before I earn any profits, or that the profits I earn will be very minimal.

Of course you could say that there’s the chance that Bitcoin’s price will explode during the next couple of month and then you’ll be profitable way faster. If for example the price goes up to $10,000 I will be able to get my initial $170 in a few months right?

Not so sure about that..

If price goes up so does difficulty since more people start mining. This means that the Bitcoins you’re making will be worth more but you’ll be making less of them. That’s exactly what happened in 2016 and why the difficulty more than tripled. Here’s the change in price vs difficulty for the past 3 years:

2014-2015 Bitcoin difficulty vs. price

Bitcoin price: down 2.45x

Bitcoin difficulty: up 34x

2015-2016 Bitcoin difficulty vs. price

Bitcoin price: up 1.36x

Bitcoin difficulty: up 2.5x

2016-2017 Bitcoin difficulty vs. price

Bitcoin price: up 2.29x

Bitcoin difficulty: up 3.05x

As you can see the difficulty is always going up, no matter what’s happening with the price. And for the past 3 years it’s been going up more than what the price itself has.

So should I mine Bitcoins at home instead?

If you mine at home with the same hash rate at today’s difficulty you’d be making twice as much (according to our Bitcoin mining calculator). However, you will be paying for the hardware, cooling and maintenance for yourself. So it’s not safe to say that mining at home would be profitable as well.

In the past I’ve written a very detailed post that discusses Bitcoin mining profitability. For now let’s just say that if you don’t have any access to cheap electricity and cooling systems I suggest to avoid mining in general and just buy coins instead.

What other users are saying?

As part of my research for this review I tried to find as many user reviews as possible to get different perspectives. Most, if not all, of the positive reviews I found were accompanied by a promo code. Promo code reviews are questionable in my opinion since the user reviewing gets a commission if you sign up with his promo code, so they have an incentive to write a positive review.

One interesting review was from a guy who actually used Genesis Mining to buy Ethereum. He states as follows:

I bought a 1 year contract for 1MH/s ETH mining. I’ve paid 0.11BTC for it (equivalent of 45$ at the time). In one year, Genesis gave me back 2.38ETH (equivalent of 69$ now), so you could say that I’ve made a profit. But you would be wrong!!! That’s just because the price of ETH is high now (29$ versus 12.5$ one year ago).

If I would have kept my 0.11BTC, now it would be worth 135$.

If I would have bought ETH with the 0.11BTC back then (I would have gotten 3.66ETH, that’s 1.3ETH more than what they gave me back), now it would be worth 106$.

So even though he could have made a better deal by not investing in Genesis Mining he still made a profit. Please keep in mind that his profit was with Ethereum mining and not Bitcoin mining. In this post I concentrate mostly on Bitcoin mining. Some other altcoins may still be profitable to mine, but I will review them in a different post.

There are also several BitcoinTalk posts about the company. It seems that most people claim that you can’t make a profit with their contracts however few supply evidence of actually trying. Bittrust shows some positive reviews but I will let you judge for yourselves on their legitimacy.

Genesis Mining – The bottom line

Finishing up my review about Genesis Mining all I can say is this – The company seems legit but I doubt if it’s a good investment. Seems like I would be much better off just using my money to buy Bitcoins instead of using it for cloud mining contracts. If Bitcoin’s price goes up – I would be making more money, and if it went down, I would be losing less.

The one thing that really bothered me though is that Genesis Mining doesn’t seem to share a lot of info regarding my mining performance. I’d except a company that is serious about making money for their investors to supply additional information such as:

  • Cloud mining calculators
  • Service fee statements
  • Which blocks were mined and how much was earned on each block (including mining fees)

One might suspect that these pieces of information aren’t supplied in order to keep the questionable profitability of cloud mining obscure. If you are invested in Genesis Mining I urge you to contact their support and try to get answers for this (they answer fast from my experience).

On a final note, this review is about Genesis Mining but I think you can probably copy and paste its characteristics to most legit cloud mining companies out there. The not so legit mining companies will probably show greater profits because they usually hold stop paying at some point.

Keep in mind that this review was made especially for mining Bitcoins, other currencies may still be profitable in these cloud mining schemes.

Ofir Beigel

Owner at 99 Coins ltd.
Blogger and owner of 99Bitcoins. I've been dealing with Bitcoin since the beginning of 2013 and it taught me a lesson in finance that I couldn't get anywhere else on the planet. I'm not a techie, I don't understand "Hashes" and "Protocols", I designed this website with people like myself in mind. My expertise is online marketing and I've dedicated a large portion of 99Bitcoins to Bitcoin marketing.

Genesis Mining

Varies
Genesis Mining
6.6

Profitabliity

5.2/10

Transparency

5.5/10

Support

8.0/10

Reputation

7.7/10

Pros

  • Fast support
  • Easy to set up
  • Reputable company

Cons

  • Doesn't seem to be profitable in the long run
  • Doesn't supply full information to users

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136 Comments on "Genesis Cloud Mining Review – It’s Not as Profitable as You’d Think"

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Elias
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Elias

I was interested why is it so hard to get your money out of this? You have no one to answer the phones. I have a friend trying to get a hold of you which is impossible right now and has been invested since 2013 when Bitcoin was only $2500.00. How do we get a hold of you? Why invest in you?

Swede
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Swede

I’m seeing some decent results with Genesis. Be sure to check out this site as well if you’re in to mining: **affiliate link removed**

You invest in mining their Bitconnect coin and get paid between .8% – 1.8% daily! I’ve already earned back around 25% of my initial investment in less than three weeks. Don’t take my word for it, check it out and do your own research.

Mark
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Mark
the ceo of Genesis was on CNBC and couldn’t answer a simple question, “Do you mine for your clients or for your own account?” I was expecting he would say both, but he dodged the question like 2 or 3 times. Maybe he didn’t want to have to answer any possible follow up questions also. Seems pretty dodgy. I suspect from my own experience, they are using their clients funds to profit big time on mining for their own account, and giving their clients scraps. You’ll basically be lucky to break even, and they’ll get all the profits.
M Sen
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M Sen

Never ever go with genisis mining. It is not at all profitable…

Kevin
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Kevin

Have to give them a 5 star review. I love that they let you see the panel before buying contracts as well. Everything is in real-tim. Payments always on time. Super clean, easy, and PROFITABLE!
Get a warm Christmas bonus by registering using this special link:
**affiliate link removed**

Alfonso
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Alfonso

I join genesis mining maybe 8 months ago, as today with BTC at $11,500 dlls, in my earnings charts of genesis mining appears that im makin 1,000 dlls per day!! But guess what, im only receiving 2.3 dlls per day, i didnt understand but also i never get an answer from support, so my recommendations. Save your money and invest directly in BTC or other Crypto

Alex Thomas
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Alex Thomas
Great tips! Renting hashing power online is a great way to start mining cryptocurrencies without having to make the investment in mining equipment. NiceHash allows you to buy hashing power for Bitcoin, Ethereum, Monero, Dash, Zcash, Litecoin and other coins and get paid in bitcoin. There’s no contracts so if mining doesn’t turn a profit for you, you can immediately stop your investment. NiceHash has real miners who use their own mining equipment which is connected to the NiceHash multipool so you’ll never have to worry if the mining equipment actually exists. So if you want to start cryptocurrency mining… Read more »
Adam B
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Adam B

I’ve been using it for 6 months and have been getting my payments, in fact I made my initial investment back already doing a 2 year Bitcoin contract. I highly recommend them. **affiliate link removed**

Can Tokcan
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Can Tokcan
Hi Everyone. I also tried out Genesis Mining. Have received payment until a certain point. I sent them 60 USD for the heck of it, 3 years ago. I think I got back only 20 till now since they stopped sending due to difficulty levels increasing which I am over since the amount that they sent increased well above 60 due BTC value increasing. What I don’t understand is that say the BTC I received from GM increased to 200 USD. Now when I am trying to send it to my bitcoin wallet I am asked to pay 130 for… Read more »
Kevin
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Kevin
I invested six months ago and agree with the cutline of “It’s not as profitable as you think” One would be MUCH better off buying and holding a coin rather than cloud mining. Even if one did not have to deal with missing payouts, which I am, the profitability is not there. In the past six months the coins you can mine through genesis have gone up 600% on average, check the charts. I haven’t even got my entire investment back let alone a return. Sure I still have 18 months left to receive payouts but I doubt I will… Read more »