Cloud Mining is the process of mining utilizing a remote datacenter with shared processing power often contracted through a Cloud Mining company. This type of mining allows users to mine Bitcoins without having to manage their own hardware. Since cryptocurrency cloud mining is provided as a service there is generally some cost, and this can result in lower returns for the miner. Most of all, the services of the bitcoin cloud mining are used by the users from the countries with an expensive electric power supply, which doesn’t allow them to create mining rigs by their own.
What is cloud mining?
Users of hosted Mining equipment can either lease a physical mining server or a Virtual private server and install mining software on the machine. Instead of leasing a dedicated server, some services offer hashing power hosted in data centers for sale denominated in Gigahash/seconds (GH/s). Users either select a desired amount of hashing power and a period for the contract or in some cases can trade their hashing power. Finally, a user may take the computational powers themselves by using already the results of their work and not coming in touch with physical or virtual servers.
Cloud mining companies
The main locations of such farms for the extraction of cryptocurrency are countries that have any advantages in this direction:
- China — cheap electricity and affordable equipment,
- Iceland — the possibility of natural cooling,
- Estonia — tax incentives for this type of activity.
In such industrial farms using specialized equipment — ASIC. The profitability of cloud mining consists of the product of leased capacity (the number of coins mined) and the current rate of the extracted cryptocurrency. During the validity of the contract (usually 1-2 years), you get the extracted cryptocurrency, which is displayed on a personal wallet or reinvested to rent additional capacity (of your choice).
Is cloud mining profitable? The answer to this question depends on a number of factors affecting the profitability of investments. The most obvious is the cost (which is why the rating of cloud companies depends on the price). The service charge covers the cost of electricity, hosting and equipment. On the other hand, the determining factor is the reputation and reliability of the company due to the prevalence of fraudulent schemes and bankruptcy. Money did not succeed, if a five-year contract will cease to exist after two months.
Finally, profitability depends on factors that no company is able to predict or control: remember at least the fluctuations of bitcoin over the past three years. All you need to know about the volatility of bitcoin when buying a contract is best to proceed from the constant value of the cryptocurrency, because to earn on the increase in the rate, you just need to buy bitcoins and wait for the growth of their prices. Another important factor is the power of the entire network. It is determined by the number of hashing operations per second. Power has been increasing exponentially in recent years. Whether the growth will continue depends on the bitcoin exchange rate and innovations in the development of special-purpose integrated circuits.
When Bitcoin Cloud Mining is an optimal solution:
- You have no possibility and desire to deal with mining by your own.
- You live in a country with high electric power supply rates.
- You have enough resources to invest in the cloud mining, while this is the money that you are ready to risk.
- You have calculated necessary powers to ensure that your expenses have been repaid.
- You have carefully investigated the cloud mining market and found a company, which can provide these powers at an affordable price and possesses a positive reputation in the users’ community.
- Absence of fans noise and overheating because of processors.
- Decrease of the electric power consumption.
- No need to control, set up or repair the equipment.
- No excess heat.
- No noise from spinning fans.
- No energy costs.
- No need to buy expensive equipment.
- The lease expenses increase the final mining cost, which influences the final income.
- Minimum control and absence of a possibility to select one or another service (as a rule, providers themselves distribute the tenants between them).
- Fraud risk. Companies in this segment usually don’t work transparently and there are no leverages for them.
- A lot of scams.
- Non-transparent mechanisms of the companies.
- Absence of pleasure from creating their own mining system.
- Decrease in profit is a cloud — based company is also interested in receiving some income.
- Cloud the company may suspend or disbursements, if the course of bitcoin will fall.
- Lack of equipment which later could be sold.
- Inability to change the software used.
Cloud Mining Services
- Hashflare. Offers production contracts using the SHA-256 and SCRYPT technology. The payouts are made in BTC. The clients have to buy no less than 10 GH/s. A one-year contract costs $1.5.
- Genesis Mining. Is the biggest provider of Bitcoin cloud mining. Contracts for the production of the Zcash cryptocurrency are also available. A two-year lease contract for the power of 30 MH/s costs $869.
- Hashing 24. Has been dealing with the development of Bitcoin cloud mining since 2012. Has mining rigs in Iceland and Georgia, where modern chips ASIC by BitFury are used, ensuring the maximum productivity and efficiency. A one-and-a-half-year plan for 100 GH/s costs $34.
- Hashnest. At the moment it has over 600 Antminer S7s for lease. One Antminer S7 can be leased for 22900 RUR.
- Eobot You can launch Bitcoin cloud mining from 10 dollars.
See Also on BitcoinWiki
- ASIC mining
- Mining farm
- Web mining
- Mining profit
- Bitcoin address
- Bitcoin wallet
- Pooled mining
- Transaction confirmation
- Bitcoin transaction