What Is Cryptocurrency Cloud Mining? – dummies

When Are Ethereum Gas Fees Lowest?

Cloud mining operations are mining farms (data centers dedicated to mining) that sell or lease hashing power to cryptocurrency miners. The essence of the service is that a third party hosts the mining equipment and provides access to the rewards associated with the equipment.

Cloud mining has many advantages and disadvantages. On the one hand, the user must trust the cloud provider in a space full of scams and fraud. the user has no control over the equipment or how it is used.

Reading: Ethereum cloud mining for dummies

The advantages, of course, are not having to fill your home with IT equipment, not having to deal with noise, heat, power consumption and maintenance of mining equipment, etc. essentially, you outsource the work.

pool mining versus cloud mining

  • With pool mining, you need your own mining equipment and, by using the pool software, you contribute the processing power of your mining equipment to the mining operation. you’ll need to take care of buying and managing equipment, running equipment, cooling it down, maintaining a strong and working internet connection, etc.
  • With cloud mining, it’s essentially a investor in a mining operation; all you provide is money. cloud mining companies sign up thousands of people to invest various sums in the operation and in return get a share of the profits. all you need to do is find a reputable cloud mining operation (be careful!), send them money, and go about your daily business while they handle everything.

pros and cons of cloud mining

You may also find it more difficult to switch, as some cloud contracts require a longer-term commitment; she may not be able to jump ship quickly. furthermore, on occasion, if the mining of the particular cryptocurrency becomes unprofitable (as it sometimes does), the trader can cancel the contract.

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Carefully do your homework and research cloud mining companies before investing a significant amount of money in these services.

a brief guide to cloud mining

These companies offer hash rate contracts. you buy a certain hash rate, for a certain period of time, and then profit proportionally based on the percentage of the total cloud mining operation that you have financed.

A big advantage of these services is that they are hands-off: no equipment to buy or manage, no space to find equipment, no equipment noise, no heat to deal with. the cloud mining service solves those problems for you.

However, cloud mining can also be somewhat risky. many are not profitable for the duration specified in the contract and can cause purchasers of these services to lose money, in some cases in the long term. users may have been better off simply buying the cryptocurrency their mining contract mines. (That, of course, is often true for pool and solo mining as well.)

Other risks include outright scams. A common mantra in cryptocurrency mining circles is “not your keys, not your coin”. in the case of cloud mining contracts, you could say, “not your mining hardware, not your rewards.”

See also : When Are Ethereum Gas Fees Lowest?

The following services rank near the top of trusted cloud mining operators. however, caveat emptor, buyer beware. For all services, you need to do your due diligence, find out what the community is saying about them, and make sure they are, or remain, trustworthy and trustworthy:

  • mining genesis
  • hash nest
  • bit deer
  • hash flashes

However, that does not mean that the above services always provide profitable mining contracts. it just means that they do, in fact, provide the services they offer and provide the advertised hash rates for the promised period. but that does not mean profitability at all times.

the profitability of cloud mining contracts varies widely between services.

In effect, you are connecting your processors to the pool node, but you are also providing the pool with cash to buy more computing power, which they will then manage for you.

Cloud mining is just one of the options available to cryptocurrency miners. always do your research before beginning any cryptocurrency mining efforts.

Category: Ethereum

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