4 min reading
Have you ever heard about cloud mining? Here is an interesting write up for you.
With the rise of the cryptocurrency industry, new unique opportunities have emerged, one of which is crypto mining. Conventional mining refers to solving mathematical puzzles to create the next block on a blockchain. Every miner receives a reward for participating in the puzzle-solving process. These mining processes require high-definition computers, computer knowledge, and maintenance that will facilitate the mining process. There is also another type of mining called cloud mining. This article is set to talk about what it is and how it works.
Cloud mining is about utilizing a remote data center with shared processing power. Cloud mining helps users to mine cryptocurrencies without necessarily using the hardware. With cloud mining rigs, participants either lease or rent hash power. A mining rig is a hardware responsible for adding coins into the existing circulating supply. With cloud mining, a user does not need to go through the stress of having the required computing power in his home, thus having to deal with the noise and the high electricity consumption. Rather, the user can rent these computing powers to a company that is into mining and receive commensurate profit with the said investment. However, the easiest way to benefit from this type of mining is by registering on a platform that offers these services and then benefits from the shares or profits that come with it. There are about two different cloud mining: Host mining and Lease hash power.
Lease hash power is a model used in cloud mining. In this model, computing power associated with cryptocurrency is leased on a mining farm. With this, you do not need to worry about maintenance or setup fees. Just subscribe to a plan, open an account with any cloud mining company through its website, and select the contract period as well as the hashing power. When the farm finds a new block and receives cryptocurrencies as rewards, the users share the profit among them depending on the share of the hash power they control.
Host mining on the other hand is one of the most popular forms of cloud mining. In this model, the customer purchases mining hardware from a miner’s facility. The miner on his part is responsible for maintaining the equipment and ensuring it functions well. The advantage of this is that overhead costs associated with electricity are managed. Also, the customer has full control over the rewards he receives since he will have to pay for set-up fees to the cloud mining provider.
Cloud mining provides quite a good solution for those who want to reap benefits without dealing with the stress that comes with acquiring hardware equipment like finding space to place the equipment, the noise produced by this mining equipment, and the heat produced by it. Also, the cost of running mining rigs reduces because the customer can fund a portion of the mining operation and the cloud miners do the rest.
However, there are potential setbacks when it comes to cloud mining, meaning you will have to think before opting to use this model. First and foremost is the existence of fraudulent platforms in the cloud mining sector. Since investors may not have the opportunity to assess the mining farms, it is therefore difficult to assess the claims made by the cloud mining provider. Another drawback is the fact that some of these service providers run Ponzi schemes where they pay early investors with the money provided by new investors. It is better to explore reviews, investigate the credibility of the crypto platforms, consider the withdrawal limits, and avoid offers that promise outrageous deals.
In conclusion, cloud mining is a model that can generate very promising returns. However, as we mentioned in this article, it is not void of pitfalls. Therefore, it is very important to carry out extensive research on the platform you desire to invest in and obtain adequate information before diving into any investment. Note that if a company does not reveal much about who they are and how they operate, then be watchful.
4 min reading
Banks getting involved in cryptocurrencies to the extent of having their own digital currency! How interesting! Discover what their digital currency is and how it works.