Cloud mining allows you to access data centre processing capacity and obtain cryptocoins without the need to purchase the right hardware, software, spend money on electricity, maintenance, and so on. The essence of cloud mining is that it allows users to buy the processing power of remote data centres.
The whole cryptocoin production process is carried out in the cloud, which makes cloud mining very useful for those who do not understand all the technical aspects of the process and do not want to run their own software or hardware. If electricity is costly where you live – for example in Germany – then, outsource the mining process in a country where electricity is cheaper, such as the US.
Types of Bitcoin cloud mining:
There are currently three ways to conduct mining in the cloud:
1. Leased mining. Lease of a mining machine hosted by the supplier.
2. Virtually Hosted Mining. Creating a virtual private server and installing your mining software.
3. Renting hash power. Renting a certain amount of hash power, without having a dedicated physical or virtual equipment. (This is by far the most popular method of cloud mining).
What are the advantages of Bitcoin cloud mining?
– Not dealing with the excess heat generated by the machines.
– Avoiding the constant buzz of the fans.
– Not having to pay electricity.
– Not selling your mining equipment when it is no longer profitable.
– No ventilation issues with the equipment, which is usually heated a lot.
– Avoiding possible delays in the delivery of hardware.
What are the disadvantages of Bitcoin cloud mining?
– The possibility of fraud,
– Operations with bitcoins can not be verified
– Unless you like to build your own Bitcoin hash systems, it might be boring.
– Lower profits – Bitcoin cloud mining services carry expenses.
– Bitcoin mining contracts may allow cessation of operations or payments if the Bitcoin price is too low.
– Not being able to change mining software.
Risk of mining in the cloud:
The risk of fraud and mismanagement is prevalent in the world of cloud mining. Investors should only invest if they are comfortable with these risks – as they say, “never invest more than what you are willing to lose.” Research social networks, talk to old clients and ask all the questions you consider appropriate before investing.
Is cloud mining profitable?
The answer to this question depends on some factors that affect the profitability of investments. Cost is the most obvious factor. The service charge covers the cost of electricity, accommodation and hardware. On the other hand, the reputation and reliability of the company is a determining factor due to the prevalence of scams and bankruptcies.
Finally, profitability depends on factors that no company can predict or control: just remember the high volatility of Bitcoin in the last three years. When you buy a mining contract, it is better to assume a constant price for Bitcoin, since your other alternative is to buy bitcoins and wait for the price to rise. Another important factor is the capacity of the entire network, which depends on the number of operations per second. Over the past few years, power has increased exponentially. Its growth will continue to rely on the value of Bitcoin and innovation in the development of integrated circuits for particular applications.