Not long ago, bitcoin mining was the domain of nerds and computer programmers, but with the advent of Cloud mining, this changed completely. With Cloud mining, you do not need mining material or technical knowledge. This has made the complexity of the Cryptocurrency mining world simpler and accessible to everyone, especially to people who are not technically oriented. Thanks to cloud mining, many people have started mining and the entire Cryptocurrency market is becoming more and more common. Mining in the cloud is great for beginners who want to get an income through mining as well as for advanced users who do not want to mess with the equipment and take a significant risk. But first, let’s talk about what Mining is.
What is Mining?
Mining is an incorrect name to properly imagine what actually happens. The easiest way to understand is that miners are computers that do “accounting”. A computer will run a special program 24/7, performing an “accounting” for a given network (eg Bitcoin or DASH). This means that in real-time transactions, the network occurs in a “Ledger” or “logbook” called Blockchain. The network then rewards the “accountant” with digital currency. Everything is based on complicated mathematical rules. In traditional Bitcoin mining, the miner owns and maintains the Bitcoin mining hardware. With the traditional Bitcoin mining facility, the miner purchases build and maintains his own material. This requires extensive technical knowledge and sufficient ventilation for cooling and will lead to an increase in electricity costs.
What is Cloud Mining?
On the other hand, in Bitcoin cloud mining, Bitcoin mining hardware is housed and maintained in a facility owned by a company. The customer simply has to register and invest in an account where you sign a one year contract to start. After this, the mining of, for example, Bitcoin, Ethereum, Litecoin, etc. will start immediately, which will then be paid to the user daily. The user does not have to worry about ordering, setting up or maintaining Bitcoin mining hardware.
This model of mining appeared through the combination of two factors: the decrease in the price of Bitcoin and the exponential growth of the degree of difficulty of mining, which made this process unprofitable in a home environment due to energy costs.
Cloud mining gives anyone the opportunity to start getting cryptocurrencies without massive investments or deep technical knowledge. Despite the simplicity of this model, it is necessary to clarify some subtleties and nuances. In particular, note that there are two modes of Cloud-mining.
Remote Hosting Model
This method of crypto-fetal extraction is convenient for those who understand mining and want to have complete control over the hardware. The disadvantage of this model is that it requires a significant investment of time and money. The equipment is expensive and requires an understanding of the mining configurations.
In this model, all hardware is housed in the technical center, being the responsibility of the user to control the equipment and use the remote mining. The responsibility for the installation and configuration of the mining is of the user who pays the equipment and the electricity.
In short, we can say that the advantages of this model are the control of the mining process and the subsequent possession of hardware after the contract expires. As a disadvantage, we may highlight the need for high investment and therefore greater risk.
Hashrate Purchase Model
This method is more accessible in financial terms – is the purchase of hashrate available from the company equipment, installed in a secure data center. The company technicians choose pools of pools based on efficiency and profitability, also guaranteeing the maintenance and proper functioning of the equipment.
This option offers a number of important advantages: it does not require the need to wait for receiving the equipment and worry about its delivery, as well as bother with the noise and pay huge electricity bills. Most importantly, you do not need to be an expert to understand the ins and outs of mining settings or make significant investments. You can purchase any amount of processing speed (hashrate). As a result, the risk is much smaller than the remote hosting version.
Cloud Mining is an online process for producing a certain type of cryptocurrency without having to worry about advanced hardware requirements or technical knowledge. Everyone who uses cloud mining has direct access to a data center with a managed shared-processing capability. This way, you do not need to have your own expensive hardware. All you need is your own digital wallet to get paid.