Bitcoin Cloud Mining
The basics when it comes to bitcoin cloud mining
Bitcoin cloud mining is referred to as the practice of mining bitcoins using bitcoin miners shared processing power at remote data centers i.e. leased hashing power. However, As opposed tophysical bitcoin mining hardware on the user’s premises, they would essentially pay for their bitcoin mining power offered by companies practicing bitcoin cloud mining. The process of bitcoin mining was developed to be profitable enough to provide sufficient incentive for more miners to stabilize the network.
How does Bitcoin cloud mining work?
You can earn your bitcoins using the cloud if you do not want the struggle of managing hardware yourself while still investing in bitcoin mining. Cloud mining generally means you would share processing power being run from data centers that are remote. All you need is a wallet!
The user typically purchases hashing power or/and a contract from the data center in form of Gigahash/seconds (GH/s). The data center customers purchase the amount hashing power they desire for the duration of the contract. This type of bitcoin cloud mining usually has data centers situated in regions with cheaper electricity or areas where it is easy to cool the miners. Sometimes it could be both cases. The data center hosts the miners on the user’s behalf and one can connect remotely to the miner and control it.
Types of bitcoin cloud mining
Generally, there are 3 kinds of remote mining currently available
1. Leased hashing power– the user leases a specific quantity of hashing power without the need for a dedicated virtual or physical computer. This is one of the most popular bitcoin cloud mining methods.
2. Virtual hosted mining- the user creates a virtual private server (general purpose) and installs their own mining software
3. Hosted cloud mining- the user leases a machine hosted by their provider.
1. No increase in your electricity bill. Using a bitcoin cloud mining company ensures your bill remains constant. The companies typically get cheaper or discounted electricity due to bulk pricing or because of their location.
2. No space, heat, or noise- bitcoin miners generate a lot of heat not to mention they are quite noisy but using a cloud mining company ensures you will not have to worry about any of this
3. No chance of hardware failure- the data center provides you with working hardware and they will absorb any costs of hardware configuration, maintenance, or failure to offer users guaranteed payout and up-time.
4. Immediate activation- you just need to buy GH and begin mining immediately instead of waiting for your bitcoin mining hardware to be delivered wasting valuable time.
In addition, cloud mining can also have some disadvantages.
1. Being that you do not own any of the equipment, you cannot sell any of it
2. There are many scams. Consider the company being unable to meet the promised payouts so the owners decide to cut their losses and run.
3. Some providers may halt your selected cloud miners operations if their threshold for profitability is too low
Bitcoin cloud mining has its risks and its rewards as is the case with any investment. So please do your due diligence before spending money you can’t afford to lose.