What to Pay for Mining - NiceHash

Helping You Mine Profitably

Can I Make A Profit Buying Hashing Power?

Maybe. There are many factors that affect profitability. For the particular example on the home page (zcash) the demand often pushes the price up to unprofitable levels. Here are some of the challenges:
Finding Blocks - Luck All of the estimates shown depend upon finding blocks consistently. The calculations use an average and pool history to project a future profit. However, mining does not always follow an average or follow historic trends. There are a certain number of blocks found per hour for a specific coin across its entire network of miners. Each pool (or solo miner) only finds a portion of those blocks. There is no certainty as to which miner will find a block and if you are not in the pool that finds one, then there are no coins and payout. See this block statistics page on flypool to see how much one pool can vary.
Risk NiceHash.com is a brilliant service bringing miners and buyers of hashing power together. However, ask yourself why a miner would want to mine through NiceHash instead of mining a coin directly. Some of the main reasons are: the miner may not want the chance involved with a new or volatile coin; the miner may prefer a steadier payment stream; or the miner wants less risk. So they sell hashing power in the form of shares found (rather than blocks) and pass the risk on to the buyer. The miner has a more stable payment stream and less risk. This creates an opportunity for many people who would not have mined otherwise to mine coins without the upfront investment in hardware.
Market Based Pricing NiceHash.com is based upon what a buyer is willing to pay. A fair price can be difficult to determine because of all the factors involved. The examples try to take into consideration all the costs associated with using NiceHash.com and show prices that are profitable. Much of the time the price is above a profitable point. If you can figure out why people are willing to loose money on mining, please let us know. Of course there may be situations where someone is renting hash power to test their pool or some other activity.
Price Volatility The price at NiceHash.com seems to cycle as orders run out. When a large order completes it frees up many of the miners and the price can drop dramtically. Also some miners may reallocate to another algorithm they to mine something else that may be more profitable to them. In order to take advantage of price fluctuations, you would need to monitor your order constantly. Since the price of an order on NiceHash can only be changed downward a small amount every 10 minutes or so, it may make more sense to cancel and replace the order at a much lower price. NiceHash has instituted a time delay and maximum amount an order can be lowered to help reduce price volatility (Example: .001 every 10 minutes). If an order is canceled and replaced, the price difference from the old order to the new needs to be large enough to cover the .0001BTC fee to place an order (hover over 'Replace Fees' to see current cost).
Coin Value If you are approaching buying hashing power to mine coins so you can hold them while they appreciate, it may be much easier and less costly to just buy the coins directly on an exchange. If you are going to mine, you will need to factor in the price of the coin while mining as it could loose or gain value just during the time an Order is running.

Strategies

There are more than a few ways to approach paying for mining. If you think its easy to make a quick profit, you may want to consider other activities.
Burst Orders Placing an order with a high limit speed for a short duration is like rolling dice. You may or may not win. You just might be mining during that one period when your pool finds more blocks than usual. But it is unlikely. Also pools uses PPLNS to track and payout miners which discourages burst orders or jumping in and out of a pool by rewarding consistent mining.
Set And Wait Orders This is placing an order for a set price and only mining when the lowest mining price is below the order price. This all depend on the price. If you are willing to pay a higher price consider creating a Fixed order for consistent mining. A low priced Standard order may only run occasionally on price dips.
Time Spread Orders All of the estimates for making a profit are based on mining consistently and are averages. Since pool only finds a portion of the blocks found, in order to hit the estimated profit, the order (or replacement orders) needs to mine as much as possible to average out the low and high periods. Keeping the order price below the Maximum helps hit the averages by allowing an order to run longer at a profitable price. This also helps with PPLNS payouts which most pools use. The ideal is to balance price and mining as consistently as posslible. The Order Manager attempts to accomplish this.