What is cloud mining: complex things in simple words
Not every user can deal with cryptocurrency mining farms. To build an efficient mining farm, you have to be well versed in software and computer equipment, invest a startup capital, and find a location with an optimal price for electricity. Cloud mining is intended for those people that want to mine cryptocurrency but are not ready perform so much work.
Read further in the article about advantages and disadvantages, types of cloud mining, and examples of services.
What is cloud mining?
Cloud mining is a cryptocurrency mining technique, where the user rents computing power from a mining farm located remotely.
Computing power of hardware or hash rate is a unit of measurement that defines the efficiency of mining. To calculate hash rate, users turn to such online services as WhatToMine. If you specify the model and the number of machines, the service will provide you with the power value of your hardware.
Hash rate influences the profitability of mining. The more power your hardware produces, the higher chances are to decipher a new block.
How cloud mining works
Cloud mining services gather cryptocurrency miners interested in quick earnings with the minimum startup capital. They rent hardware from the service provider, make money on it, and the provider receives fees from every deciphered block.
Types of cloud mining
There are three types of cloud mining: hosting, virtual hosting, and rent of computing power.
Hosting refers to renting of hardware from the provider. The user can manage computing power to his liking, but has to set up machines on his own.
Virtual hosting refers to renting of the private virtual server with the aim to install your own mining software. Here, the set up and maintenance of the hardware is the task of the service provider.
Cloud mining services also offer renting of computing power without access to the physical or virtual server. In this case, the miner has a restricted range of actions. However, this method is a nice match for users that want to make a profit hardly participating in mining. Currently, this is the most popular type of cloud mining.
Advantages and disadvantages of cloud mining
Cloud mining has its pros and cons. Here are its main advantages:
- no need to look for and set up equipment on your own;
- no need to maintain equipment;
- you can make a profit from mining with minimum investments;
- you can try mining in the test mode free of charge;
- you can mine several cryptocurrencies at a time.
At the same time, cloud mining has its disadvantages:
- there are many fraudsters in the market that claim to be mining services;
- overloaded data centers often experience breakdowns;
- the operation of the service depends on the cryptocurrency exchange rate;
- miners cannot sell equipment they do not own.
Cloud mining services
Below you will find the most popular cloud mining services according to ProstoCoin.
IQ Mining is a simple to use service launched in 2016. For a start, you have to register and buy MH/s mining contract. Creators promise that the first earnings will appear in an hour. The website is available in English, French, Spanish, and Russian languages. Home page offers a calculator to assess the average monthly income.
AlienCloud is a cloud mining platform that also offers a cryptocurrency exchange, cold and hot wallets, which can be used simultaneously. Creators state that they eliminate risks of hacking and stealing funds in such a way. AlienCloud is available in Russian, English, and Chinese languages. The service regularly adds contracts for mining of new coins and has convenient trading charts.
Agio Crypto is a cloud mining service established in 2017, also acts as a reseller of Bitmain and Saint. It gained popularity thanks to innovative ideas such as refunds to unhappy customers after a week of the test mode, 24/7 customer support, possibility to resell the contract, risk minimization thanks to data centers located throughout the world, etc.
HashFlareservice is a scam. In 2017, it changed the contract terms and closed SHA-2 contracts. Users raised the alarm, as the service stopped giving payouts.
Cloud mining requires the same serious approach as other types of investments. As the major part of the responsibility for mining lies with the service, one should choose it thoroughly.
Pay attention how its representatives behave on social media, talk to customers, and ask tricky questions to customer support managers. In such a way, you will be able to decide whether the cloud mining service is worth your investments.
To learn more about the cloud mining, blockchain and cryptocurrency, attend the Blockchain Conference Moscow, which will take place on November 20, 2018, at InterContinental hotel.