What is Bitcoin Cloud Mining?
At its very core, cloud mining enables miners to lend/buy mining capacity from outside hardware (data centers). Two companies, Hashflare and GenesisMining, have emerged as the top options on the market.
To put it simply, cloud mining is the best option for people who want to get into the promising world of cryptocurrency AND skip the hassle of buying/setting up hardware and so forth. With cloud mining, you are using outside computing power from remote data centers. You will only need a Bitcoin wallet and a working PC to communicate with people.
Pros of Cloud Mining:
- Your home is now quiet and cool. No humming, no tropical climate due to the constant mining.
- No shocking electricity bills.
- Your equipment won’t become obsolete in a couple of month.
- Reduced risks thanks to lower investments.
Cons of Cloud Mining:
- There are many scammers on the market.
- Some people consider setting up their rig “fun”, so this option is “no fun”.
- Lower profits due to lower risks and the involvement of a 3rd party.
- Less control, less flexibility.
Types of Cloud Mining:
There are 3 types of cloud-based mining available for you at the moment, including:
- Hosted mining.
- Virtual hosted mining.
- Leased computing power.
The third option is the most popular among crypto-enthusiasts, because the first two still require a dedicated virtual/physical rig. The leased computing power option is as close to free Bitcoin cloud mining as you’re going to get. It’s cost-effective and it’s hassle-free. No wonder it’s the most popular one.
Profitability of Cloud Mining
As mentioned above, there’s no such thing as free bitcoin cloud mining, so you’d have to calculate the profitability. It’s a tedious task, but it is 100% necessary. There are some websites that offer you readymade mining profitability calculators, so maybe you will only have to punch in the numbers.
There are many factors to take into consideration before committing to a mining option, be that cloud-based one or not. You have to think about your electricity bills, hardware costs, contract costs, and so on and so forth. Just to reiterate: you HAVE TO do your math here or otherwise you risk running your financial stability into the ground.
Risks/Rewards of Cloud Mining
Some of the worst risks we have covered in the cons section. The very first one (plethora of scammers) is the worst one. You are always at risk of running into some double-dealers, so you need to use your common sense: if an offer seems too good to be true, it probably is. Only do business with well-known, established cloud mining websites.
You must have calculated the rewards while figuring out the overall profitability of this method of mining. One thing you have to keep in mind is that the difficulty level of Bitcoin increases. There’s also the fact that its exchange rate is fluctuating, that could prove to be bothersome.
At the end of the day, it is all up to you. Every single thing under the Sun has its own risks and rewards. Whether or not you should get in on cloud mining depends entirely on how much time/money/effort you are willing to invest.
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