Does crypto cloud mining make things easier? Cloud mining is one good way to mine crypto coins including Bitcoin without needing to invest in costly mining equipment or any related software.
There are no maintenance costs or energy costs to bear by the users. In this mechanism you use rented cloud computing power.
This is the process in which the cloud mining service providers allow people to take part in crypto mining acts remotely through them.
All they have to do is pay the basic cost for renting the equipment and open an account with them to start mining.
When you use the cloud mining process to earn crypto coins, you eventually become a part of the mining pool.
It is a place where the users buy hash power and you will be rewarded based on the amount of hash power you have purchased, or rented from the third-party sources.
This hands-off way of earning crypto coins however applies only to the PoW or Proof of Work systems such as Bitcoin and not to PoS or Proof of Stake systems and it helps in mining new coins with pure computational brute force.
It sounds very tempting and easy but the question is: does cloud mining really make things so easy for the users.
Well, this article will let you know everything about crypto cloud mining including its working process, profitability, types and differences along with the advantages and the risks involved in the process.
If after reading the article you find it to be good enough to get engaged in, there are also a few reliable websites mentioned in this article for you to get started.
Contents
Does Crypto Cloud Mining Make Things Really Easier?
Cloud mining is gaining popularity with each passing day because it relieves the users from the burden of maintaining a costly mining machine and paying monthly energy bills that are quite high.
There are many different models offered by the cloud mining service providers to the users who want to earn crypto coins using leased hash power.
Ideally, you can choose between host mining model and leased hash power model depending upon your purchasing power (more on these models is discussed later).
Cloud mining practice typically leverages cloud computing, which, ideally, is one of the fastest growing technologies as of now.
The cloud service providers allow the users to enjoy several different services and offer several other things that include and are not limited to:
- Data processing
- Database services
- Server capacity
- Software
- File storage and more.
All these are accessible easily over the internet from any place in the world and often by using any device.
The service providers charge the users on the usage basis, which is much, much lower as compared to the cost of direct involvement in crypto mining.
Cloud mining has changed the entire concept of crypto mining but follows the same basic principle of mining – verifying and validating a transaction through hashes and authenticating them before they are added to the blockchain as new blocks.
The miners get rewarded in the same coins for their contribution.
Working Process
Crypto cloud mining is nothing different from the traditional crypto mining process as you know.
As said earlier, in both the methods you will need to verify the transactions before these are added to the blockchain and earn new coins for your efforts.
Therefore, as it is in traditional crypto mining, crypto cloud mining also does not involve any actual mining in that sense.
Ideally, it is all about preserving the security of the blockchain, which is a distributed ledger.
Difference
The only difference between crypto cloud mining and traditional crypto mining is that the participants in crypto cloud mining do not own the mining equipment and do not have to bear the burden of any monthly costs to mine new crypto coins.
They can rent or buy hash power which makes cloud mining so cost effective in spite of its shared returns.
As said earlier, a huge computational power is required in the Proof of Work mining process.
This involves a huge cost which is not possible for most of the people to bear and therefore is not economical.
On the other hand, in the crypto cloud mining process they share the computational power from a third-party having a huge infrastructure and maintaining it.
This mining service provider is the sole owner of the mining hardware and the place where it is located.
The users are only allowed to use these facilities for a cost.
Types
As for the cloud mining models, one of the most popular ones is the hosted mining model.
This form of mining needs the user to buy or lease the mining hardware which is located at a facility owned by the miner.
And, the miner owns the equipment and pays for and looks after the maintenance of it to ensure that it performs at the highest level at all cost and at all times.
The good thing about the hosted cloud mining model is that the users have direct control over their crypto coins.
It is for this reason you can streamline the use of hardware so that you can optimize your chances of gaining new crypto coins.
In addition to that, in this model, you will be allowed to receive 100% of the mining reward received by you without having to share it with the third party.
Another model of cloud mining is the leased hash power model. In this particular model, the mining farm leases the computing power or hash power needed to mine crypto coins.
However, you will not be able to tweak the hardware to increase its efficiency.
The users are paid a share of the profit made by the mining farm overall from the crypto mining efforts.
This means that the mining farm is entitled for the rewards you have earned by validating a transaction made on the blockchain.
The amount of profit you will receive will entirely depend on the amount of hashing power you have leased out of the mining farm.
This is also quite a popular form of cloud mining especially when it involves Altcoins or in other words, crypto coins other than Bitcoin.
In this process, you will need to open an account with the crypto mining farm through their website and select a few specific things such as the hashing power and the contract period.
Profitability
If you are wondering whether crypto cloud mining is a profitable option given the fact that you simply have to rent the equipment and mine your coins, yes, it surely is.
However, there are a few upfront costs in the form of rents you need to pay as well as the cut on your profits.
However, it is still a worthy option to go for.
The profits you can make from crypto cloud mining will largely depend on the strength of the mining pool you have selected which, in turn, depends on the power of the miners used by it.
If there are newer miners, they will have newer models of equipment with better specs and therefore will be more likely to compute more and generate higher returns.
The magnitude of your profits will also depend on the state of the market.
For example, if the price of the coin mined by you is high and you wish to sell it off, you will gain more but if you ‘have to’ sell it at a low price you may end up on the losing side.
Moreover, if you wish to hold on to your crypto rather than sell it off to get fiat money such as US dollars, you will still be exposed to the price which can swing either ways dramatically and quickly.
Getting Started
You will not need to spend hours on setting up your equipment in order to start crypto cloud mining as you would have if you opted for a regular crypto mining process.
You will not need to spend hours on research to buy a reliable and powerful mining hardware, find a place to set it up, arrange for a cooling system and more.
All you have to do in order to get started with crypto cloud mining is:
- Choose a cloud mining provider
- Sign up with them for an account
- Rent the hardware
- Choose the crypto coin you wish to mine
- Select a winning mining pool and
- Wait for the pool to generate returns.
At this point, it is good to know that each site may have slightly different requirements.
For example, a site may need you to download or configure special mining software.
Therefore, it is better that you do your research and due diligence before you sign up with any one of them.
The Advantages
There are several advantages of crypto cloud mining which is over and above the recurring costs and initial cost of a mining hardware.
The most significant reason for the popularity of the crypto cloud mining process is that it allows the everyday crypto investors and users who lack adequate technical knowledge to take part in crypto mining as well.
Since you will be a part of a mining pool during crypto cloud mining, you will also have a significant edge over those who mine solo with much more computational power with you which will increase your profitability and chances to earn more rewards than them more frequently.
Crypto cloud mining also comes with a few significant disadvantages.
It is good to know these disadvantages along with the advantages of crypto cloud mining because that will make your knowledge much more comprehensive.
First, industry scams in this field have multiplied as rapidly as cryptocurrencies have gained popularity.
However, apart from that one of the most significant downsides of this process is that it is a centralized process for mining crypto.
This promotion of centralized cloud mining models is in contradiction to cryptocurrencies itself which is supposed and believed to be typically a decentralized ecosystem.
And, the profits earned are shared among all the participants in the mining pool.
This is because you are outsourcing the computational power needed to mine crypto coins, which is significantly huge.
Therefore, your profits will surely get reduced and shared since you are using a mining pool.
And, the returns get further diminished as the number of participants in the mining pool increases. Therefore, it is vulnerable to demand.
However, as said earlier, the rewards earned through cloud mining are much more frequent in comparison to solo mining and therefore the lower rewards add up to quite a high amount after some time.
Then, there is also the effect of the Altcoins being so susceptible to demand, which, once again, results in diminishing returns.
The profits are further reduced with the decrease in hash power.
The Risks
There are some risks associated with crypto cloud mining. You should know these before you even get started with it in order to avoid the pitfalls.
Firstly, you will need to be very cautious when you select a website because a majority of them are scams.
Do your research to select one that is legit and trustworthy.
Secondly, your profit margin may vary depending on the site you have chosen because different sites may offer diverse profit margins from the crypto cloud mining process.
Remember, even a small difference can add up to a huge sum later on when combined. Once again, reach is necessary.
Thirdly, you may not choose the right coin to mine.
If the value of it falls due to the changes in the market conditions, you stand to lose a huge amount of money.
Therefore, choose the coin you want to mine after thorough research.
Then, there is the risk of relying on a third-party for crypto cloud mining without being able to check their hardware physically.
This is a significant risk involved in this process that you should be more concerned of.
In order to save you from falling into a trap, there are some red flags that you need to know to avoid the risks and select a reliable cloud service provider. These are:
- Spelling errors on the website
- Anonymous testimonials
- Stock images of people
- False company address or no address at all
- No information on who manages the platform and
- Promises of returns that are too good to be true over a very short period of time.
Therefore, it is best to stick to well-known mining pools. This will reduce the risks significantly.
However, add to that, there are also some regulatory risks involved in crypto cloud mining.
In a few countries mining crypto coins is banned, such as in China.
If you rent miners for any of the countries that do not support crypto mining will equate to lost income.
Considerations
Now, before you finally go on to choose a crypto cloud mining service provider and get indulged in the process, here are a few considerations that are good to make.
- Consider the cost of it so that it covers the rewards that you may earn over time
- Consider the hash rate that is offered so that it is reasonable and adequate enough for the amount you are paying to buy or lease it and
- Consider whether or not you will have control over your crypto mining rewards.
You should stay away from sites that do not satisfy these particular queries and lack transparency.
At least some degree of it is necessary. It is only when you have easy access to information you will be saved from being defrauded and also have more control over the process and your coins.
Also, it is needless to say that you should consider the privacy and safety aspect of your crypto wallet before you become hand-in-glove with these third-party crypto mining farm owners.
Due diligence is always important in this regard.
Checking their plan, seeing how they work, looking at their site, checking their background, going through the stats of their previous work and track record, and reading their reviews are few essential things to do in order to choose the right host.
Crypto Cloud Mining Sites
Well, here are some of the best sites that you may consider while choosing one for your crypto cloud mining endeavor.
All of these crypto cloud mining sites come with almost similar features.
Be advised that these are not the only ones you should look for.
There are several others as well that are good enough to consider and therefore you should always do your own research.
ChickenFast
This is one of the most popular and trusted sites for crypto cloud mining that came into existence in 2015.
The best thing about this site is that it uses Artificial Intelligence to choose the best and most lucrative cloud mining tariff for you from its three premium tariffs namely Silver, Gold, and Platinum based on the amount that you have deposited.
Also, based on the same amount, it will calculate immediately the projected income that you may make daily, monthly, and annually.
Not only that, the amount of power required for your specific plan will also be determined by the site.
The site also guarantees return on your deposit as well as ensures that the payments are made daily without any delay.
You can mine different types of crypto coins on this site such as Bitcoin, Ethereum, and Bitcoin Cash with a focus on eco-friendly mining and not have to worry about any issues since you will get 24/7 customer support from ChickenFast.
ECOS
ECOS is another reputed and reliable crypto cloud mining site that you will find with a lot of useful features and functionalities that will make it a good choice.
The minimum contract amount is pretty low and affordable for all and the contract length is pretty long, in fact for 15 months. However, you can choose longer contracts of up to 50 months.
This site also allows you to see how much profit you can make on your investments on a daily, monthly, and also on an annual basis along with the amount of energy you will need to mine your chosen coins.
Yes, you can choose from a variety of crypto coins to mine such as Bitcoin, Ethereum, Ripple, Litecoin, Tether, and Bitcoin Cash.
You will also have a convenient user experience when you use its free to download mobile app to use in your Android or iOS device.
Genesis Mining
Genesis Mining is also a solid and very popular crypto cloud mining site.
You will be offered a large range of crypto coins to choose from such as Bitcoin, Ethereum, Monero, and Dash.
You will also have a large variety of mining contracts to choose from. However, this will depend on the demand.
You will not have much difficulty in using this site since all your queries will be answered by the customer service support as well as the broad FAQ section.
However, you will need to find out first whether or not the site is taking on new users because there are periods when the site restricts any new users from signing up.
This is because the mining power of this site is pretty limited and can support only a handful of contracts.
But if you can wait and follow them on Twitter to know when they open up to new users, your wait will be worth it in terms of the benefits that you will be offered.
TrustCloudMining
TrustCloudMining is also a well-known cloud mining site that was launched in 2018.
You will be able to choose from three different hash power alternatives such as SHA 256, Equihash, and Ethash.
The type of coin you can mine will depend on the hash power option you choose.
The site will allow you to see the amount of profit that each of these three hash power options can generate on a daily, weekly, and monthly basis.
This will help you to choose the plan that is most suitable for you.
And, you will also get 24-hours customer service from TrustCloudMining to clarify all your doubts.
IQ Mining
IQ Mining has also made its mark as a reliable cloud mining site. This site, founded in 2016, will also offer you with a variety of mining contracts.
However, make sure that you check for the hash rate, income amount, type of payout, and the price and all these will vary depending on the type of the mining contract.
Also, depending on the type of the mining contract, the type of crypto coin you can mine will also vary.
Therefore, choose the type of crypto mining contract that suits you the best but whether or not you will get it will depend on the demand for it.
In addition to that, you will also be able to use an income calculator while using IQ Mining so that you know how much profit you can make every day, every month, and in a year along with the amount of energy needed for the same.
You will also get customer support round the clock when you need to resolve any issues related to your mining contract or with the payouts.
Google Cloud and Crypto Mining
Finally, before you eventually sign with one of the crypto cloud mining service providers, you should know what Google, or Google Cloud in particular, are planning to do to prevent malware threats in crypto mining.
Google Cloud is one of the most popular and widely used remote storage systems.
All files and data of the customers are stored in this remote server by the tech giant. If this is hacked then the personal details of the customers can be used fraudulently for crypto mining purposes by the bad actors.
Therefore, Google Cloud has planned to add a new service called the crypto mining malware threat detection service.
The search engine major found that nearly 86% of the Google Cloud accounts were compromised and were used by the malicious actors for mining crypto coins.
Typically, Google Cloud has introduced Virtual Machine Threat Detection or VMTD that comes with an ability to identify any malware or malicious software that may be mining crypto coins using a compromised Google Cloud account.
VMTD can scan the memory without any agents or additional software and detect crypto-mining malware, ransomware, and other threats that may be residing inside the virtual machines of the users who are running it on Google Cloud.
Google says that this device will prevent the cyber criminals from hacking the Google Cloud accounts while mining crypto coins.
This machine will also prevent attacks that may result in data extraction.
If you have a Google Cloud account and want to enable VMTD on it, go to the Settings page, click on the Security Command Center and then on Manage Settings under Virtual Machine Threat Detection. Finally, select a scope for the VMTD.
Conclusion
In spite of the risks and downsides in crypto cloud mining, it is still a worthy option to go for since the advantages offered to the users by this specific process is much more.
You surely will agree to it now that you have read this article.
I have special interest in crypto and intend to help common people to gain knowledge about the digital asset as well as its potential. Follow Me at Linkedin.
