Cloud mining: how it works and whether it is possible to earn on it

Now, it is quite difficult to obtain crypto-currency on own mining farms, due to the constant increase in the complexity of calculations and the deficit of expensive equipment. Not so long ago, a solution to this problem appeared in the form of “cloud mining”. What this is and how to make money on it – we will tell in this article.


What is cloud mining? Types of cloud mining

Cloud mining is the process of extracting crypto currency using a remote data center with a total processing capacity. In simple words, this is a simplified mining that relieves you of electricity costs, round-the-clock monitoring, software configuration and other complexities associated with the classic production option on your equipment.

Its essence lies in the fact that the user buys the power of special equipment installed in remote data centers, and the process of extracting crypto currency is conducted in the cloud. Each user independently chooses what kind of crypto currency, the level of power it can be purchased based on its financial capabilities.

If we talk about types of cloud mining, then there are three main forms:

  • Hosting – rent of capacities, which are installed at the supplier;
  • Virtual hosting – rent a virtual server and install your software;
  • Rental capacity – rent without physical access to hardware and software.

Miners who connect to the “cloud” accelerate the extraction of crypto currency and earn on it. Services that lease equipment, earn on commissions and on rent charges. Most often, such companies are occupied by cloud mining of bitcoins and lightcoins, using for the extraction of ASIC cryptographic equipment, equipment designed specifically for the production of a particular crypto currency.

This method is great for those who are not very well equipped and are not ready to independently assemble the equipment or customize the software. In addition, this is an appropriate opportunity for people living in countries with high cost of electricity. Cloud mining, in turn, allows the production of crypto currency in places where electricity is much more affordable.


Pros and Cons of Cloud Mining

Like any method of mining the crypto currency, cloud mining has both advantages and disadvantages. Of the obvious advantages, we can distinguish the following:

  • The user gets rid of all the shortcomings of the usual mining: constant monitoring, setting up equipment, paying bills for electricity and so on.
  • The total capacity of the hotel data center will always be greater, therefore, when collecting your farm and renting capacity in the cloud, the compensation indicators will always be greater on the side of cloud mining.
  • Quite high profitability – services allow to receive on the enclosed means from 200% up to 400% of the income for a year, considering that the course криптовалют basically grows.
  • On the same service, you can simultaneously purchase contracts for different crypto-currencies, which will help to protect yourself against occasional falls of one of them.
  • Referral programs – for the invitation of the user, you can rely on a fixed amount or a small additional percentage of the profits on his contracts. So, the creators stimulate the demand for their services.
  • Absence of excessive heat, noise and additional costs inherent in ordinary mining farms.

Despite the serious advantages, cloud-based mining has obvious shortcomings. For example:

  • Fraud. A large demand for cloud mining has activated a number of scams offering non-existent production capacities. It is worth using only proven services with numerous recommendations and not to be on the promise of sky-high interest.
  • The probability of a strong fall in the rate of bitcoin.
  • The site of the company with an online purse is subject to hacking attacks and hacking – from this, the services of cloud mining are not completely protected.
  • A sharp increase in the complexity of extraction of the selected crypto currency, which in turn will result in fewer coins for leased power (hashed).


How to choose a service for cloud mining?

Before you start a mine in the “cloud”, you need to study reviews about companies and choose the one that seems most reliable to you. It is necessary to understand such concepts as speed of hashing, what algorithms there are. After that, you need to decide how much power you need and for how long you want to sign a contract.

To date, the most reliable and proven services for cloud mining are:

Hashflare – has the highest yield – <200% of the contract value. Most importantly, Hashflare has an impeccable reputation. It is easy to use and automatically makes payments. In addition, the tariff plans on the service are not limited. The data center is located in Tallinn and belongs to the company HashCoins – the world producer of miners. On the service you can buy SHA-256 and Scrypt (forever) and Etherhash and X11 (for a year). The annual contract for 10 GH / s costs $ 1.5.

Genesis Mining is a well-known service offering cloud-based Bitcoin mining and other advanced crypto-currencies (currently five coins). High confidence in him is due to irreproachable feedback from the miners themselves and daily payments. Data centers are in Europe, America and Asia. The contract can be purchased, starting at $ 26 – the cheapest option that gives you 100 Gh / s. Profitability is from 80 to 150% per annum.

Shansis – the company ShansiS Systems has been engaged in the leasing of facilities for the mining of crypto-currencies for several years already. The location of data centers with equipment, Shanxi Province, is chosen because of extremely cheap electricity. On this service the company can offer good conditions for customers.

CCG Mining – service offers rental of the highest computing power. For the test, an unlimited time DEMO contract for Bitcoin is available, costing only $ 75 for 200 GH / s. Also on the site you can buy a miner. The service is translated into 27 languages, including Russian and Ukrainian.


Earnings and risks of cloud mining

How much can you earn on cloud mining? A single-valued answer to this question is very difficult to give. This largely depends on the company that provides the services. The maintenance fee covers the costs of the cloud company for electricity, hosting and equipment.

In addition, earnings depend on fluctuations in the exchange rate, which no one can predict. If the value of the crypto currency begins to fall sharply, the cloud company will suspend the work and stop paying for time. Also, earnings depend on the power of the entire network, which depends on the number of hashing operations per second.

Despite the fact that the concept of cloud mining is quite attractive, you need to understand that any manipulations with the crypto currency carry risks. To cloudy mining it is necessary to approach with the same care, as well as to any investments. It is never possible to exclude cases of fraud or hacking. In cloud mining, you should invest only the money that you are ready to lose.

Post Author: MizOne

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