What is Cloud Mining?
What if you’re told that mining bitcoin and other cryptocurrencies are as easy as signing up to a website and collecting your coins every day? If you want to earn cryptocurrency, cloud mining is one way to go. Cloud mining is a cryptocurrency mining process that allows users to acquire cryptocurrencies without the need to manage the hardware. In layman’s term, cloud mining is the easier and more accessible version of its physical counterpart, which will benefit you in many ways.
Why Do You Need Cloud Mining?
Traditional cryptocurrency mining requires the constant use and management of a machine—and this machine needs to be maintained, which demands your time and money. That is why you must consider Cloud Mining and its benefits. Here are the reasons why others prefer it:
Small Initial Investments
You have the choice of whichever type of cloud mining you want, depending on your need. Different cloud mining service providers offer different features. This means that you don’t have to own an expensive device to start mining. Thus, making it easier and cheaper for you to mine coins. Also, you won’t have to worry about setting up and maintaining a machine—which could prove to be more expensive in the long run.
Lower Usage of Electricity
Since you won’t be needing a mining rig, you won’t have to worry about your monthly electricity bill or the cost of buying one. Also, there is no need to pay a fixed cost because cloud mining services usually include it in their contracts.
Cooler and Quieter
Standard crypto mining rigs produce a lot of heat and noise. It can create an uncomfortable environment for you and for everyone who lives in your house. With cloud mining, you won’t need to buy a mining rig, which means your home will be free of sound pollution, and you won’t need to arrange cooling equipment for your hardware.
Instant Purchase and Withdrawal
With a legitimate cloud mining service provider, you can start mining immediately and get your first payout 24 hours later. Your coins will then be automatically transferred to your virtual wallet, and you should be able to withdraw your money immediately after receiving your coins.
You will be able to choose which pool you want your hash to mine in, and that will allow you to find the most profitable combination. The greater the number of pools that your hash can mine in, the better your chance is in getting cryptocurrencies. Therefore, it is important to choose a cloud mining service provider that has a good pool allocation.
Cloud mining service providers usually have fixed fees which will not blindside customers and will provide the transparency the miners are looking for. That’s why customers tend to use service providers that are transparent with their fees because they are at ease with how their money is being utilized. Also, you won’t have to worry about unnecessary and additional fees being charged to you.
The whole crypto world is complicated on its own, but with a cloud mining service, you will have an interface that is designed for easy operation. It will also include all the data you need to know, which is available to you whenever you need it. For example, you should be able to see your current hashing power, the pool you’re using to mine, and how much coins you have earned so far. Also, this is beneficial for beginners.
Safe and Private
When you sign up at a cloud mining service provider’s website, the data that they get from you should be kept at a minimum. They are required to ask for information that is only needed from a regulatory perspective. It is common knowledge that cryptocurrencies are encrypted, that's why a lot of people are interested in it. What makes it even better is that cloud mining service providers have end-to-end encryption on their websites as well, which makes cloud mining safe and secured altogether.
Quick Return on Investment
The number of hash power determines how much coins you’re going to mine and how quickly you get your coins. With the present system, you can earn your return on investment within a year. With luck, if the value of bitcoin rises, then you will get extra income from that.
Most miners who have entered into a cloud mining contract have the benefit of receiving as much as sixty percent of their revenue for the year. However, miners should consider which cryptocurrencies they are investing in because this will determine whether or not they’re going to have a high profit. To know which cryptocurrencies have high profitability, look at cryptocurrencies that have above $30m market caps. It is important to note that the higher the cap, the safer your investment is.
Traditional mining with a rig at home would be uncomfortable for anyone who is living there due to the heat and sound. Whenever you think of having mining rigs at your home, you would have to do a lot of customization and modifications to your electricity to make it work. While if you do cloud mining, none of what is mentioned above is your concern as the only requirement for it is a laptop and internet connection.
Easy Setup and Maintenance
To set up a mining farm, you will be required to have six GTX1080 graphic cards. The cost of these graphic cards can fluctuate substantially from $630 to $1260. But, with cloud mining, your cloud service providers maintain their mining rigs, and you’re only asked for a minimal maintenance fee in your contract. With this, you can sit at the comfort of your own home and enjoy earning coins without the hassle of setting up your mining rig.
You can check if your service providers are trusted cloud mining sites if they have a legally registered status. Most of them are in geolocations with transparent legal standards. And, they are usually found in colder regions because of low energy costs and natural cooling climate needed for the maintenance of a mining rig.
Core Features of Cloud Mining
When you’re looking for the best cloud mining service provider—to get started on bitcoin cloud mining—there will surely be a lot of websites available. However, it would be easy to choose a worthy service provider if you check the features they offer. The following features are the ones you must seek:
A blockchain explorer is a browser that displays the contents of individual bitcoin blocks and bitcoin addresses. This feature is mainly aimed at advanced users who want more information on their cryptocurrencies’ status. With this, monitoring your progress is not difficult.
In this context, there are two types of calculators: the generation calculator and profitability calculator. Generation calculator shows you an estimate on the amount of time that you will need to do mining at the specific hash rate before you can earn bitcoins. The profitability calculator shows the estimate of how much profit you can make at the current network and market conditions. Using this feature will make all your calculations convenient.
Pool stats show a user which pool is most profitable to mine in. It also shows the history of how a cryptocurrency is doing. With this, the user can determine which mining pool best suits their needs for the specific cryptocurrency they are mining.
The service monitor is a monitoring system that includes the cryptocurrency, availability to mine, balance confirmation, transfers, withdrawals, and rewards. This is important because users will not be worried about why their cryptocurrencies are offline. Also, by the time they reach customer service, they can point out their main concern, making it more efficient to resolve their problem.
Most cloud mining service providers have wallets for where the coins are going to be stored. However, not all of them offer a mobile wallet application. It is better if a user can access their wallet at any time and still get the full functionality of the website through an app.
Your cloud mining service provider should offer chat support and excellent customer service. That way, you won’t worry if you encounter any problems while you’re using their site.
Multiple Payment Options
The main reason people use cloud mining is that they don’t want to use their cash to earn from cryptocurrencies. Cloud mining providers give users different payment options, such as debit and credit. With this, investing will be seamless.
Types of Cloud Mining
There a different ways to mine cryptocurrency. The best type of cloud mining for you would depend on your experience, equipment, budget, and timeframe in mind. Whatever cloud mining setup you settle with, you should ensure that you are working on something you can commit to.
Hosted mining is when a user leases or rents their cryptocurrency mining equipment from a third-party provider. The set-up and maintenance required for mining are taken care of by the provider. In this type of cloud mining, users have full control over their equipment remotely. This greatly reduces any risk of fraud or theft from the provider because the user solely controls cryptocurrency.
Pros of Hosted Mining
Low Monthly Service Fees
Hosted mining providers usually quote all-inclusive monthly fees. These include installation, electricity, equipment, and maintenance. Most of these providers offer to cancel their services if users are dissatisfied.
Eliminate Electricity Costs
If you choose to lease or rent ASICs, then it will be the company’s responsibility to repair and maintain the device. You won’t have to worry about running it at home.
Since mining rigs use up a lot of energy, it can be hazardous to the environment. Most cloud mining service providers operate with green energy through the use of hydro-power. Using hydro-power and water cooling systems make up for a more energy-efficient method and highly profitable mining operation.
When your contract is done with your service provider, you don't have to worry about disposing or reselling the machine. Mining rigs get easily outdated, and when you choose to buy and maintain one, it can be costly.
Cons of Hosted Mining
If you choose to rent a rig, you will have to maintain it and make sure that it is at its optimal condition. If you are not too knowledgeable about the machine, you can end up damaging it, and it will cost you more than you expect it to be.
Limited to One Cryptocurrency
Unfortunately, each rig can only mine one cryptocurrency. Thus, making your odds for reaping the benefits smaller.
Virtual Hosted Mining
Virtual hosted mining is when you rent a virtual computer to run your mining applications on. It also falls under the category of cloud computing, which means that instead of owning and maintaining physical equipment and services, everything is accessible through a cloud provider.
Pros of Virtual Hosted Mining
Miners are required to choose what type of operating system they would like to use. They are also provided with computing optimization, memory storage, GPU processing, and high performing ASICs.
The software has built-in security features to protect it from malware and trojan attacks.
Cons of Virtual Hosted Mining
Low CPU Power
Physical servers are placed at low temperatures and colder regions to prevent them from overheating and to preserve its optimal condition. The virtual server’s performance is 10% - 20% less compared to physical servers. This makes virtual servers less efficient for mining and can wear down your computer faster than usual since mining requires a lot of computing power.
Operating System Cost
Virtual hosted mining doesn’t require you to own a mining rig, but it still requires you to have a computer that has a high graphics processing unit (GPU). Depending on what the miner would choose, the operating system’s cost is more expensive as it can be priced at around $5000 or more.
Leased Hashing Power
With leased hashing power, users can rent hashing power of multiple, high-powered Application-Specific Integrated Machines (ASICs) machines offered by cloud mining service providers. The hashing rate will depend on the contract chosen by the users. Whichever the chosen agreement would be, it’s the user’s responsibility to check the volatility of the crypto market.
Pros of Leased Hashing Power
Quick and Simple Mining
Beginners in the crypto world choose leased hashing power because it’s the easiest and fastest way to get started with cloud mining. It doesn’t need special equipment and servers because you only have to sign up on a company’s website and wait if you’re going to profit off of them—depending on the current market. It’s also considered to be the fastest way to get your ROI (return of investment) in cloud mining as it generates your coins within 24 hours daily.
Miners Can Choose Their Contracts
When a miner uses a leased hashing power type to cloud mine, they are entitled to choose how much hashing power they should purchase and for how long they are going to stay in a contract.
Cons of Leased Hashing Power
Volatility of Market
Since the crypto market isn’t stable, your hashing power can become weak—depending on the market state.
Reliability of the Service Provider
Some scammers and hackers offer too good to be true contracts and tag themselves as the easiest and fastest cloud mining services that exist. They will initially mine and give you output every day, and then one day, their website will be unresponsive only to figure out that they’ve taken your investment. When choosing a company for your leased hashing power cloud mining, bear in mind that you need to be careful.
Termination of contract
Even if you’re under a contract and a company sees that mining isn’t profitable, they can easily terminate your contract. This means that you will lose your initial investment for the hash power, and you will have to find another cloud mining service provider to mine with.
Lack of Control in Flexibility
With leased hashing power, you don’t own any machine or server, which means that the mining process isn’t within your control. You will have to wait for the mining process currently being conducted by the service provider, and check in the next day how many coins you mined.
Who Needs Cloud Mining?
The number of digital nomads in this generation is growing, which explains why the world of cryptocurrency is growing big as well. If you are comfortable earning online, then considering cloud mining is recommended. As a digital nomad, you can work and earn from cryptocurrencies with ease since mining your earnings is as easy as ABC—with the use of cloud mining, of course. It saves both your time and energy.
If you are a corporate employee, then you would know how hard it is to save just by relying on your salary. Employees would usually want to earn from another source of income, and cloud mining is a great way to earn passive income. However, you have to remember that cryptocurrency investment is not considered to be a ‘high-risk, high-reward’ investment.
Self-employed individuals probably earn more than regular employees and have a lot of time in their hands. They always try to find profitable investments other than their businesses. That’s why it’s ideal for them to try cloud bitcoin mining if they want to generate passive income, and with regular employees alike, take note that cryptocurrency investments are not high-yielding investments.
Even students can earn free bitcoin from cloud mining without having to sign up and pay for cloud mining sites. Many students need additional money for their school and personal expenses too, which means cloud mining can help. It’s convenient and won’t take their time for studying just to mine coins. They can do this by installing extensions on their browsers as it quietly mines in the background.
Frequently Asked Questions
To get started with cloud mining, you need to choose a reputable cloud mining website. Then, you can select the mining contract of your choice. Depending on the cloud mining service, it can provide you with mining one up to ten cryptocurrencies. You can also choose how much hash power you want to buy in exchange for the computing power for mining coins. Once you finalized your contract and you’re happy with the hashing power, you can pay through the company’s website, and they will confirm your contract.
Cloud mining is more accessible to anyone anywhere in the world as long as you have internet and a personal computer. Regular mining requires you to have a mining rig or a separate device for you to mine.
You probably think that regular mining is slightly cheaper than hosted mining. But in reality, there are several hidden costs when you purchase and maintain a mining rig.
If you’re going to search online about brand new mining rigs, they would often be marked as sold out. Or, if there are, they are already used and outdated. The worst thing that could happen is being sold a mining rig that is marked as new, but when it arrives, you’ll realize that it is used and worn down. That’s why you should be wary about buying these mining rigs because they are costly.
Sellers of mining rigs are usually from a different country, and when you’re buying it directly from a company, the shipping fee is another factor for your equipment to cost more than what it really should be. Unless you bought it from a direct seller, you might be able to strike a deal. But most of the time, they will still charge you extra.
Value Added Tax
International deliveries require you to pay customs dues and VAT. Therefore, this is another cost that will top-up the total cost of your mining equipment.
Once you pay for your mining rig, you’ll have to wait for it to be shipped. And since most of the machines are coming from another country, the possibility of it being held up in customs is inevitable. The waiting time for your mining rig to come makes you lose opportunity costs.
Additional Equipment Costs
When you buy your mining rig from large retailers, you often have to buy additional equipment that matches the electricity specification in your country. You also have to purchase cooling units and customized shelves for efficient storing. This adds significantly to the total amount of your mining equipment.
Setting up Your Mining Rig
Unless you are a pro at assembling mining rigs, you won’t have to worry. But even then, it could still take you some time to finish. If you are a beginner and you have no idea on how to assemble and configure your mining rig, it will take you a lot of time and effort to understand it before you complete the assembly. By this time, it would have cost your time and your lost mining opportunity.
This, by far, is the hardest part of owning a mining rig. There will be hardware failures, outages, and crashes that could lead to downtimes, which can last between seconds and weeks. But, if your unit breaks, you have to ship it back and start from zero. Imagine waiting for your mining rig and setting it up for months only for you to return it.
This running cost is something most people would underestimate. They don’t realize it until the bill comes. Not only does it increase your electricity, but it also brings heat and noise to your home.
Yes, but it is minimal. Cloud mining charges fees for the maintenance of their hardware—and their fees are based on the hashing power that you have purchased.
Compared with the cost of owning a mining rig, cloud mining is reasonably profitable. Take into consideration that getting more coins depends on how much hashing power you purchased. Right now, the cryptocurrency market is getting more and more competitive, so huge profits are unlikely. However, it’s still possible to make money over time, but don’t think of it as a get-rich-quick scheme and treat cloud mining as a low-income steady interest investment.
It depends on the cloud mining service provider that you choose because they offer different lengths. Most providers usually offer contracts between 12 and 36 months. But, some companies provide lifetime contracts. Note that companies can terminate your contract once they don’t see the cryptocurrency market’s profitability.
It is possible, but it is difficult. Most cloud mining service providers don’t allow selling of contracts, and they would recommend getting your contract.
No, cloud mining is not regulated. Several countries show their concern when it comes to bitcoin mining, but most have been silent about regulating the industry.
No, because your cloud mining service provider stores your coins in your account. For safety, you can always have a separate wallet to move all of your earnings.
Many risks come with cloud mining, so do your research and be careful. Scammers take advantage of the rise of bitcoin to the general public and offer price drops to entice miners and run away with their funds later. Only use reputable services that have positive reviews. Also, if bitcoin’s value falls, you most likely won’t get your money back, and your cloud mining service provider can terminate your contract.
There are other types of cryptocurrencies other than bitcoin cloud mining. There is even a much cheaper alternative to bitcoin, which is bitcoin cash. Bitcoin cash cloud mining has faster transfer times and can handle more transactions per second. Sticking to bitcoin mining cloud services will still depend on your personal preference. However, with the nature of bitcoin, it possibly still is a better choice as an investment to generate a steady income over time.
There are several ways on how to get bitcoins for free without having to use a cloud mining service provider.
You can earn bitcoin by using bitcoin cashback services when you do your online shopping. You only have to add a browser extension, and they will reward you blockchains for every purchase. Then, the browser extension will notify you if you qualified for the cash-back. Once the cash-back service provider verifies the purchase, you will have confirmed earnings. Every time you purchase, your crypto rewards will be added to your wallet. Once the merchant's reward locking period has expired and your balance reaches $15, you can withdraw your bitcoin from their built-in wallet to your own bitcoin wallet. With this, you incur minimal fees for the blockchain transfer. Another great feature about this browser extension is that if you refer your friends, the amount of bitcoin received per purchase grows.
Opening a Crypto Interest Account
When you earn your bitcoins, you usually store them in your wallet. But, you'll find out later on that there isn't much growth in your overall coins. But, if you store your cryptocurrency in an interest account, then your interest will build over time. It only takes a few minutes to sign up in an interest account, and you will let the cryptocurrency earn for you instead of having it stagnant in your wallet.
Several companies ask questions to help them with their market research. The surveys that will be offered to you will vary depending on which company is partnered to the website giving the survey. There is also a passive way to earn bitcoin, and this is by keeping a tab open on your computer. Then, the website will be able to mine cryptocurrency in the background while you go on with whatever you're working on at the moment. The maximum withdrawal of bitcoins is worth $10 per week. Like with the cash-back service, the website offers a referral program that pays you a percentage of each referral's account earnings.
Become an Affiliate Marketer
If you have a good amount of online following, you can give your followers a unique link meaning that you increase traffic on a merchant's website. For that, they will track your referral's purchase and reward you with bitcoins. There is no limit to how many people you can get to click your link. So, if you have a sizable amount of followers, this is another great way to earn bitcoin for free.
Step-by-Step Guide on How to Get Started with Cloud Mining
Step 1: Educate yourself about the crypto market and cryptocurrency.
Although indeed, you don’t have to have technical knowledge with operating a traditional mining rig, you should have a basic know-how about the crypto market. It will not be difficult because cloud mining service providers have easy-to-understand features that teach you what you need to know about cloud mining before you begin.
Step 2: Register to a cloud mining service provider’s website.
After educating yourself with how cloud mining works, you’re now ready to commit to your cloud mining service provider of choice. Then, you’re going to choose a contract that is suitable for your designated fund and hash power needs.
Step 3: Pay for your contract.
Several contract types cloud mining providers offer, but there is also an option wherein you can customize the amount of hash rate and how long you want for your contract to last. Once you’ve finalized which contract suits you best, you’ll have to pay for it either through a debit or credit card.
Step 4: Start cloud mining.
You will have to wait for a confirmatory email from your cloud mining service provider before the mining begins. This usually takes up to at least 24-48 hours. But, you’ll know that your purchase is successful when the mining begins automatically.
Step 5: Receive newly mined coins every day.
Depending on your contract’s hash rate, that’s how much coins will be distributed to each user. You don’t need to have bitcoin cloud mining payment proof as the coins will be directly placed in your wallet until you decide to withdraw them. This process occurs every day until the end of the user’s contract.