Cloud mining is the process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware.
Why do data centers rent out mining equipment?
The answer is simple, really. While their business model in one way relies on Bitcoin, they are not building their whole business model on the price of Bitcoin, since the price is highly volatile. They are basically providing shovels and picks in a gold rush. It’s a Pick-And-Shovel Play.
They get their return on investment without relying too much on the price of Bitcoin. If Bitcoin crash to $0, their capital if they mine Bitcoin and kept it themselves, would be worth $0. It’s a more secure way of doing business by renting out the equipment, as of now at least.
However, since the price of Bitcoin keeps rising, its users make more and more profit from their service. So it’s a win-win situation; the user doesn’t need to invest in bitcoin mining hardware and pay for the electricity (the price of a miner can be $3000+, and electricity bills can add up quickly). And the data center does not rely fully on the price of Bitcoin.
What are the advantages of cloud mining
- No stress of upkeep, electricity costs, software installations or expensive hardware
- You don’t need to listen to humming fans running wild all day long
- You can quit at any time if/when Bitcoin mining becomes unprofitable
- No ventilation needed for the hot equipment
- Don’t wait to get start mining bitcoin
- No out-of-stock equipment to wait
The disadvantages of cloud hashing
- Many scams: Many companies that have popped up that exploit newbies, making it hard to find a trustable provider
- Your hands are tied to the decisions of the provider. You cannot upgrade the gear yourself.
- Lower profits long-term
- You rely on a cloud mining provider that can close down anytime in case of too low of a price on Bitcoin
These are some of the pros and cons of the cloud hashing, you can use them to make your mind on which method is the best. Although, for most people that aren’t that tech-savvy or have money to put down on expensive hardware, cloud mining contracts is the best choice.
Bitcoin Cloud Mining Service Providers
The sites where you can safely invest, without fear of being robbed. Engage Cloud Mining is not too much. I have personally collected the best. This kind of financial investments involve risk, do not put the amount that can not afford to lose. Warning: We do not own any of the presented programs.
Cloud Mining Genesis: Provide services and SHA256 SCRYPT mining lifetime contracts is not limited to, daily payments to purse, promotion code for discount 2.5% – IFAGZi
Genesis Mining Is a well established Scrypt and Bitcoin cloud mining provider. They are the largest Scrypt cloud mining provider and furthermore are now offering Bitcoin mining contracts as well. All their contracts are lifetime contracts, which is a big plus! Currently, they have 3 undisclosed locations in Europe, America and Asia. They represent their service on all the important Bitcoin conferences/events and are more transparent than any cloud mining service out there!
HashFlare: You can buy SHA256 or scrypt X-11 most profitable power, duration of contracts are not limited to, the conclusion, at any time.
MinerGate: Make your computer mine for cash. Cryptocurrency GUI miner and Mining Pool. Get most profit while mining. Always.