I'm not too familiar with the economics. One of the biggest cloud mining platforms is called Bitfufu, which is affiliated with Bitmain in some way. 

I imagine the way it works is that they sell the hash rate for more than they would've earned mining. They have hash rate on standby, mining themselves until someone buys it. 

I am personally very skeptical of cloud mining. If it were profitable, why would the cloud owners not mine themselves and keep the profit? Would you buy a map to buried treasure?

DiedOnTitan

Yeah cloud mining is often a scam. There are some people who offer real products, and there's a market for it, but often it's not a good way to go. 

KaboomracksAlex

bitcoin

The Lifecycle Of Bitcoin Miners, Evaluating Risk On Miner Purchases

I was always interested in Bitcoin mining in the cloud. But after many attempts I discovered that most of the Platforms of that type were Scam😱