user123870: 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. "Why would they want to give you any Bitcoin when they can just mine for themselves?" is the reasoning given.
But then doesn't the same logic apply to actually buying a miner and "mining at home yourself"? Why would anyone sell such a machine when they can just hook up another one to their massive warehouse of miners and get more Bitcoin for themselves? Why bother dealing with charging fiat (or Bitcoin!) from annoying customers, having to deal with shipping and all that stuff? Why not just... mine themselves?
It seems like the very same thing to me. I just don't see any way for me to mine Bitcoin which would actually be profitable or make sense.

user124166: 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, meaning that manufacturers charge a price that is higher than the correct price for their hardware. They reach this conclusion by modeling the hardware as a bundle of financial options, and then applying option-pricing theory to evaluate its correct price.
For example, when looking at the Bitmain Antminer S9, the authors concluded that Bitmain's official price was higher than the correct price for most of 2016-2019:


user62388: 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 space and electricity, do all the work yourself.

Hire a service to do the mining for you.Instead of doing it all yourself, outsource it to professionals.  You should enjoy huge economics-of-scale, while you pay them their cut.

Buy a stake in a mining company.Someone creates a mining-company, using their cash to buy/operate miners.  You give them 10% more cash to do the same, they give you a 10% cut.  Same economics-of-scale, while employees draw salary for working the whole thing.


Problems:

Individual miners are horribly inefficient.Everyone learning and doing small amounts of labor themselves is highly inefficient.  There's too much duplicated effort and too little expertise.

Hiring a service can have trust problems.If you're a customer, then they're trying to sell you something you want – not necessarily something that's best for you.

Owning a stake in a component mining-company would seem best.This is what companies are for: they do some work using their assets, paying laborers for their labor, while capital-owners (people who give them money) can buy/sell stock-shares, collect cash-dispersals from dividends, etc..
Ultimately should work out a lot like the prior case, except instead of being a customer that they're trying to get money from, you'd be a part-owner who the company would have fiduciary obligations to.  "Fiduciary Duties: Minority Shareholder Rights" (2015) looks helpful.  Also, the principal–agent problem.


Note: This isn't financial advice nor legal advice.  And I'm definitely not suggesting anyone invest in Bitcoin.
That said, if someone did want to invest money in mining cryptocurrency, investing in a good, reputable mining-company would seem like the way to do it.  Alternatively, someone could mine for themself, though that'd seem to be mixing in a hobbyist-project rather than a strictly investment-focused strategy.

user26356: 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 for testing purposes. A couple months, up to a year or so of "testing".
Ship the mining rigs after the complaints got too loud.

Customers lost out twice. First, missed a year or so of bitcoin mining opportunities.
And second, by the time they finally received the mining rigs, that was outdated technology and could no longer compete with more up-to-date miners.

user127654: Cloud mining introduces a lower entry fee into mining as you do not need to purchase the hardware. That said, many cloud companies are considered 'scams' because contracts can end abruptly without compensation. This usually happens when the BTC price increases or decreases considerably. Although there are some reputable companies around.
Cloud contract prices are variable and follow the BTC price. And, the longer the cloud contract period, the higher the profit margin. But in order to turn a profit, a cloud miner is making a bet that the BTC price will remain stable or increase.
Cloud mining, selling hardware, and mining yourself comes with risks because the profitability of all of these businesses follows the BTC price which is volatile. Professional miners use the bull and bear cycles to their advantage, and can also move rigs to where electricity is cheaper.

user38618: 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 very low variation depending on Bitcoin's price, so they reduce the risk for themselves. Also, mining is a low-effort investment, while as a large BTC company they might have advance knowledge about many price changes, which could allow them to earn more money holding than mining.

user112775: 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?) manpower to run the mining setup
You may have less pressure from the shareholders for reliable and/or immediate profits
etc, etc...

That's why both you and the manufacturer may be better off in your particular roles. This makes selling/buying a mining hardware profitable for both sides.

user123956: 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.

user18328: 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 significant capital costs. For example if you live in an apartment they'll be limits on the total power consumption the utility can provide and space constraints. Overcoming those by say setting up something in a larger / more industrial area will have a large up-front cost and the inconvenience of moving.


Also on a global scale whatever mining hardware a single individual / company might sell is pretty much a drop in the bucket, so some probably use their expertise to sell some mining hardware to make some additional profit regardless of how BTC travels. Selling the hardware involves minimal risk and can be done with minimal infrastructure.

user85: 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 borrowing money from you and you are somehow expecting that the will pay you more than the normal amount of interest borrowers pay to lenders. That's obviously ridiculous.
In the case of buying a miner, the company just provides you a physical product that they manufacture. It is then up to you to maintain it, to provide it power and cooling, to maintain its internet connection, and to take on risk over months that the value of the cryptocurrency it produces will drop. That is nothing like just lending money to a supposed turn-key profit generator that requires you to do nothing but kick back and collect profit.
Why would companies that make miners have access to cheap power and cooling? Why would companies that make miners have facilities that can house them?

user-1: 
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 money (trade, lend, run away after few months etc.)

Why would anyone sell such a machine when they can just hook up another one to their massive warehouse of miners and get more Bitcoin for themselves?

Mining is a business which requires:

Space
Electricity
Hardware
Cooling
People to manage

Manufacturing ASICs is a business in which you create hardware used in mining, ship it and provide support.
A company which creates ASICs can do both (manufacturing and mining) or just manufacturing. This is similar to lot of other hardware companies that could use the product themselves for business but it has different risk/reward compared to just manufacturing.

I just don't see any way for me to mine Bitcoin which would actually be profitable or make sense.

Mining profitability calculator: https://insights.braiins.com/profitability-calculator

123870: <p>Every time I have asked Bitcoin experts about buying a &quot;cloud mining&quot; 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. &quot;Why would they want to give you any Bitcoin when they can just mine for themselves?&quot; is the reasoning given.</p>
<p>But then doesn't the same logic apply to actually <em>buying</em> a miner and &quot;mining at home yourself&quot;? Why would anyone sell such a machine when they can just hook up another one to their massive warehouse of miners and get more Bitcoin for themselves? Why bother dealing with charging fiat (or Bitcoin!) from annoying customers, having to deal with shipping and all that stuff? Why not just... mine themselves?</p>
<p>It seems like the very same thing to me. I just don't see any way for me to mine Bitcoin which would actually be profitable or make sense.</p>
 124166: <p>One possible explanation as to why companies sell their mining hardware instead of using it themselves is given by the paper &quot;Correct Cryptocurrency ASIC Pricing: Are Miners Overpaying?&quot; (links to a <a href="https://www.youtube.com/watch?v=thfy_ZBuTAo" rel="nofollow noreferrer">short talk</a> about the paper, a <a href="https://www.youtube.com/watch?v=8esvJD0tGuM" rel="nofollow noreferrer">long talk</a>, a <a href="https://medium.com/blockchains-huji/your-asic-is-probably-mispriced-12b5c8daf437" rel="nofollow noreferrer">medium post</a>, and <a href="https://arxiv.org/abs/2002.11064" rel="nofollow noreferrer">the paper itself</a>).</p>
<p>The authors of the paper argue that mining hardware is <em>overpriced</em>, meaning that manufacturers charge a price that is higher than the <em>correct</em> price for their hardware. They reach this conclusion by modeling the hardware as a bundle of financial options, and then applying <a href="https://en.wikipedia.org/wiki/Valuation_of_options" rel="nofollow noreferrer">option-pricing theory</a> to evaluate its correct price.</p>
<p>For example, when looking at the Bitmain Antminer S9, the authors concluded that Bitmain's official price was higher than the correct price for most of 2016-2019:
<a href="https://i.stack.imgur.com/mxOtO.png" rel="nofollow noreferrer"><img src="https://i.stack.imgur.com/mxOtO.png" alt="A comparison of the official and correct prices for the Bitmain Antminer S9" /></a></p>
 62388: <p><strong><em>tl;dr</em>–</strong>  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?</p>
<hr />
<h1>This is why investors buy stakes in companies.</h1>
<p>Consider three scenarios for using your cash to mine cryptocurrency:</p>
<ol>
<li><p><strong>Do all the mining yourself.</strong><br/>Buy your own hardware, use your own space and electricity, do all the work yourself.</p>
</li>
<li><p><strong>Hire a service to do the mining for you.</strong><br/>Instead of doing it all yourself, outsource it to professionals.  You should enjoy huge economics-of-scale, while you pay them their cut.</p>
</li>
<li><p><strong>Buy a stake in a mining company.</strong><br/>Someone creates a mining-company, using their cash to buy/operate miners.  You give them 10% more cash to do the same, they give you a 10% cut.  Same economics-of-scale, while employees draw salary for working the whole thing.</p>
</li>
</ol>
<p>Problems:</p>
<ol>
<li><p><strong>Individual miners are horribly inefficient.</strong><br/>Everyone learning and doing small amounts of labor themselves is highly inefficient.  There's too much duplicated effort and too little expertise.</p>
</li>
<li><p><strong>Hiring a service can have trust problems.</strong><br/>If you're a <em>customer</em>, then they're trying to sell you something you <em>want</em> – not necessarily something that's best for you.</p>
</li>
<li><p><strong>Owning a stake in a component mining-company would seem best.</strong><br/>This is what companies are for: they do some work using their assets, paying laborers for their labor, while capital-owners (people who give them money) can buy/sell stock-shares, collect cash-dispersals from dividends, etc..</p>
<p>Ultimately should work out a lot like the prior case, except instead of being a customer that they're trying to get money from, you'd be a part-owner who the company would have <a href="https://en.wikipedia.org/wiki/Fiduciary" rel="nofollow noreferrer">fiduciary obligations</a> to.  <a href="https://themalawyer.com/fiduciary-duties-minority-shareholder-rights/" rel="nofollow noreferrer">&quot;<em>Fiduciary Duties: Minority Shareholder Rights</em>&quot;</a> (2015) looks helpful.  Also, <a href="https://en.wikipedia.org/wiki/Principal%E2%80%93agent_problem" rel="nofollow noreferrer">the principal–agent problem</a>.</p>
</li>
</ol>
<p>Note: This isn't financial advice nor legal advice.  And I'm definitely not suggesting anyone invest in Bitcoin.</p>
<p>That said, if someone did want to invest money in mining cryptocurrency, investing in a good, reputable mining-company would seem like the way to do it.  Alternatively, someone could mine for themself, though that'd seem to be mixing in a hobbyist-project rather than a strictly investment-focused strategy.</p>
 26356: <p>This is an excellent question, and in fact there have been schemes around companies that did <em>both</em> - they used the mining hardware <em>and</em> sold it.</p>
<p>I don't recall the name of any company that used this scheme; it must have been around 2015 or so.</p>
<ul>
<li>Advertise the sale of bitcoin mining rigs. Prepayment required.</li>
<li>Build the mining rigs.</li>
<li>Run the mining rigs themselves for testing purposes. A couple months, up to a year or so of &quot;testing&quot;.</li>
<li>Ship the mining rigs after the complaints got too loud.</li>
</ul>
<p>Customers lost out twice. First, missed a year or so of bitcoin mining opportunities.</p>
<p>And second, by the time they finally received the mining rigs, that was outdated technology and could no longer compete with more up-to-date miners.</p>
 127654: <p>Cloud mining introduces a lower entry fee into mining as you do not need to purchase the hardware. That said, many cloud companies are considered 'scams' because contracts can end abruptly without compensation. This usually happens when the BTC price increases or decreases considerably. Although there are some reputable companies around.</p>
<p>Cloud contract prices are variable and follow the BTC price. And, the longer the cloud contract period, the higher the profit margin. But in order to turn a profit, a cloud miner is making a bet that the BTC price will remain stable or increase.</p>
<p>Cloud mining, selling hardware, and mining yourself comes with risks because the profitability of all of these businesses follows the BTC price which is volatile. Professional miners use the bull and bear cycles to their advantage, and can also move rigs to where electricity is cheaper.</p>
 38618: <p>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 very low variation depending on Bitcoin's price, so they reduce the risk for themselves. Also, mining is a low-effort investment, while as a large BTC company they might have advance knowledge about many price changes, which could allow them to earn more money holding than mining.</p>
 112775: <p>There are quite a few oportunities (or, at least, an impression of oportunities) to be more efficient miner than the mining hardware business themselves.</p>
<ul>
<li>You may have an access to cheaper (or free, or even stolen) electricity</li>
<li>You may live in favorably cooler climate</li>
<li>You may be one of those gambling types that just want to bet</li>
<li>You may have enough (spare?) manpower to run the mining setup</li>
<li>You may have less pressure from the shareholders for reliable and/or immediate profits
etc, etc...</li>
</ul>
<p>That's why both you and the manufacturer may be better off in your particular roles. This makes selling/buying a mining hardware profitable for both sides.</p>
 123956: <p>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.</p>
<p>People running miners do not.</p>
 18328: <p>There's a couple of reasons I can think of:</p>
<ul>
<li><p>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.</p>
</li>
<li><p>Once you scale up mining beyond a certain limit there can be significant capital costs. For example if you live in an apartment they'll be limits on the total power consumption the utility can provide and space constraints. Overcoming those by say setting up something in a larger / more industrial area will have a large up-front cost and the inconvenience of moving.</p>
</li>
</ul>
<p>Also on a global scale whatever mining hardware a single individual / company might sell is pretty much a drop in the bucket, so some probably use their expertise to sell some mining hardware to make some additional profit regardless of how BTC travels. Selling the hardware involves minimal risk and can be done with minimal infrastructure.</p>
 85: <p>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.</p>
<p>In the case of cloud mining, literally everything is done by the company. All they are doing is borrowing money from you and you are somehow expecting that the will pay you <em>more</em> than the normal amount of interest borrowers pay to lenders. That's obviously ridiculous.</p>
<p>In the case of buying a miner, the company just provides you a physical product that they manufacture. It is then up to you to maintain it, to provide it power and cooling, to maintain its internet connection, and to take on risk over months that the value of the cryptocurrency it produces will drop. That is <em>nothing</em> like just lending money to a supposed turn-key profit generator that requires you to do nothing but kick back and collect profit.</p>
<p>Why would companies that make miners have access to cheap power and cooling? Why would companies that make miners have facilities that can house them?</p>
 -1: <blockquote>
<p>Every time I have asked Bitcoin experts about buying a &quot;cloud mining&quot; 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.</p>
</blockquote>
<p>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 money (trade, lend, run away after few months etc.)</p>
<blockquote>
<p>Why would anyone sell such a machine when they can just hook up another one to their massive warehouse of miners and get more Bitcoin for themselves?</p>
</blockquote>
<p>Mining is a business which requires:</p>
<ol>
<li>Space</li>
<li>Electricity</li>
<li>Hardware</li>
<li>Cooling</li>
<li>People to manage</li>
</ol>
<p>Manufacturing ASICs is a business in which you create hardware used in mining, ship it and provide support.</p>
<p>A company which <a href="https://en.bitcoin.it/wiki/List_of_Bitcoin_mining_ASICs" rel="noreferrer">creates ASICs</a> can do both (manufacturing and mining) or just manufacturing. This is similar to lot of other hardware companies that could use the product themselves for business but it has different risk/reward compared to just manufacturing.</p>
<blockquote>
<p>I just don't see any way for me to mine Bitcoin which would actually be profitable or make sense.</p>
</blockquote>
<p>Mining profitability calculator: <a href="https://insights.braiins.com/profitability-calculator" rel="noreferrer">https://insights.braiins.com/profitability-calculator</a></p>
