Mining stands at the heart of the crypto industry. Without crypto mining, new coins cannot be put into circulation. Mining usually involves multiple software programs and pieces of hardware, the latter of which can be both expensive and energy demanding.
But did you know that there's another kind of mining that is considerably less intense, known as crypto cloud mining? So, what exactly is cloud mining, and is it better than"regular" crypto mining?
What Is Crypto Cloud Mining?
Like regular crypto mining, cloud mining still involves putting crypto coins, like Bitcoin or Ethereum, into circulation. How coins are mined is also the same, as is the equipment used, but individuals can pay to receive some of the profits a mining farm makes.
The mining company itself is responsible for running and maintaining the necessary equipment to perform its function successfully and provide a profit to users. A person does not need to run a blockchain node for cloud mining, as one would need to in typical crypto mining. It's a great option for those with limited technical knowledge but who want to reap some of the rewards offered in crypto mining.
There are two different kinds of cloud mining: host mining and leasing hash power.
Host mining (currently the most popular method of the two) involves either renting or buying mining rigs in a separate, secure facility (rather than buying them and bringing them home). A crypto mining rig is essentially a computer with multiple GPUs (which are usually considerably more powerful than most individuals own), or an ASIC crypto miner, a specialized bit of hardware that performs just one role (mining, in this case).
Host mining allows a user full control over their mined crypto, along with how they want to distribute hash power among mining pools. Doing so may increase a user's chance of finding a new block and, with it, the block reward. While a customer's level of control is higher with this form of cloud mining, there can be some painful upfront costs that they would have to pay for the setup and maintenance of their leased rig.
Alternatively, one can opt for leasing hash power produced from a mining farm. The upside of this method is that a customer doesn't need to pay any large initial setup or maintenance fees, which can be much kinder on the wallet. Furthermore, by subscribing to one of the plans offered by the cloud mining company, one can receive a share of the mining profits passively. However, this method doesn't give the user as much control over their crypto or hash power.
With both of these cloud mining models, users don't need to download any mining software or purchase any mining equipment. Several different companies offer cloud mining, including Chicken Fast (which can be seen above), ECOS, and Trustcloudmining. Prices differ depending on the company you're interested in, as well as the contract period (which relates to the window of time for which you pay to have cryptos mined on your behalf).
So, now we've discussed what exactly cloud mining is, it's important to move on to another important question: is cloud mining worth it, and is it safe?
How Safe and Profitable Is Cloud Mining?
First things first, it's very important to note that a lot of cloud mining websites are scams. In fact, most cloud mining websites are created for the core purpose of conning users out of their money. So, it's crucial to know which sites are legitimate and which aren't to avoid falling for a cloud mining scam, as the sheer number of phony websites makes it easy for this to happen.
But are cloud mining sites safe? Well, it's important to keep in mind that, with cloud mining, you are relying on someone else to mine crypto for you. It is, in its essence, a form of investment, and so you're betting your money on someone else's success.
In terms of profit, you certainly can earn a nice sum of money via cloud mining. For starters, cloud mining users don't need to buy any hardware or software to make money. Mining equipment can be very expensive, both to buy and maintain, so eliminating the need to purchase this hardware cuts the costs significantly, which leaves more room for a healthy profit.
However, the profit you make depends on the third-party provider you use. Their success rate, mining power, and mining hardware may differ, and so your profits may be affected by these factors. Again, you must do your research before setting your sights on one cloud mining site. Checking what a site offers, customer reviews, and other important elements will allow you to find the right site for your preferences or needs.
Additionally, make sure you know which coin is best to opt for in the mining process. If you go for a coin that has little to no value, you're not likely to make much of a profit. You might mine a lot of it, but it might not be worth anything, and you've wasted your cloud mining lease in the process. In short, the demand for a coin will directly affect the profits you can make from having it mined remotely. Remember that your chosen site may not support mining for the coin you want (many cloud mining sites only support Bitcoin).
Therefore, you should be sure that your chosen coin is a viable option for selling before paying to have it mined on your behalf. Websites like CoinMarketCap are great options for checking if a coin is doing well. It's also worth checking whether a cloud mining site has a solid customer support service before investing so that you have someone to speak to if you run into any issues.
Cloud Mining Is Risky, but It Could Pay Off
Cloud mining is a great option for those who want to reap the rewards of crypto mining without dealing with hardware maintenance and multiple software programs. Not only does it help the mining farm itself deal with the overhead operation costs, but it can provide you with a nice bit of passive side income. If you do your research and ensure you're using a legitimate mining site, cloud mining could indeed be a profitable move for anyone!