One possible explanation as to why companies sell their mining hardware instead of using it themselves is given by the paper "Correct Cryptocurrency ASIC Pricing: Are Miners Overpaying?" (links to a short talk about the paper, a long talk, a medium post, and the paper itself).
The authors of the paper argue that mining hardware is overpriced, ...
The most obvious reason I am aware of comes to mind. If you have a cloud server farm for other standard types of cloud services that isn't being utilized heavily, renting off capacity to a new market helps keep you from being under utilized and keeps you in your line of business.
It's the most basic move all businesses make, extend your product into as many ...
That's a great question; here is the thing about cloud mining and ASICS.
1. CLOUD MINING
cloud mining is an act where a company pays users to use their mining software so that customers may use their machines as a proxy. Here is what doesn't make sense about the economics, who gets the money?
1.1. customers make profit
1.2. company makes profit
1.3. miners ...
This is an excellent question, and in fact there have been schemes around companies that did both - they used the mining hardware and sold it.
I don't recall the name of any company that used this scheme; it must have been around 2015 or so.
Advertise the sale of bitcoin mining rigs. Prepayment required.
Build the mining rigs.
Run the mining rigs themselves ...
tl;dr– If you wanted to invest cash in gold-mining, would you buy a pickaxe for yourself or pay someone else to mine for you? Or, would you buy stock in a gold-mining company?
This is why investors buy stakes in companies.
Consider three scenarios for using your cash to mine cryptocurrency:
Do all the mining yourself.Buy your own hardware, use your own ...
Selling hardware is a less risky enterprise than mining bitcoin. The manufacturer knows exactly what their profit margins and unit costs etc are and has a more or less guaranteed result.
People running miners do not.
The difference is that with cloud mining, all you are doing is lending the company money. And you are expecting them, for no rational reason, to pay you back an interest rate higher than they would have to pay if they took out the worst loans in existence.
In the case of cloud mining, literally everything is done by the company. All they are doing is ...
There are quite a few oportunities (or, at least, an impression of oportunities) to be more efficient miner than the mining hardware business themselves.
You may have an access to cheaper (or free, or even stolen) electricity
You may live in favorably cooler climate
You may be one of those gambling types that just want to bet
You may have enough (spare?) ...
Every time I have asked Bitcoin experts about buying a "cloud mining" account, that is, paying fiat money to a company for them to mine Bitcoin for me, I get the response that it's a scam.
Most of them are scams because it's almost impossible to verify that your money is used for mining. You need to trust a company that can do anything with the ...
There's a couple of reasons I can think of:
They might not think mining is profitable and are simply looking to sell hardware and treat BTC miners as a good target market, media attention probably means there's a lot of naive users that believe they can make huge profits by mining themselves.
Once you scale up mining beyond a certain limit there can be ...
There is great difference for large companies between earning X money now or earning X + 20% in two years' time: The former lets them invest for the next miner without waiting years, because waiting a few years to continue innovating. Waiting a few years can cause them to lag behind their competitors for many more years to come. Besides, selling miners has ...