The cloud mining has become a trend in the Bitcoin and cryptocurrencies mining world. It’s a known fact that mining is the simplest way to accumulate Bitcoin and Altcoins. Since a lot of miners started to mine the cryptocurrencies using their PC and other mining hardware, the block difficulty has increased a lot which made it impossible to mine Bitcoin and established cryptocurrencies like Litecoin, Ethereum using regular devices. So, the miners had to move to advanced hardware which is very costly and consume high electricity. The Bitcoin cloud mining has become the best alternative to adapt to the changes in mining. The cloud mining companies help the miners to buy hashing power instead of buying their own hardware for mining cryptocurrencies. This article explains what is cloud mining, how to earn Bitcoin on cloud mining sites and lists some of the legitimate bitcoin cloud mining sites in the world.
What is cloud mining?
The cloud mining is the process of mining Bitcoin or other cryptocurrencies by using the hashing power of the direct/third-party data centers(cloud mining companies) which is specially designed for mining cryptocurrencies.
The cloud mining data centers will be fully managed by the companies, where a user can buy/rent or purchase the mining contract from those companies for mining cryptocurrencies.
How does Bitcoin cloud mining works:
- The cloud mining companies will manage data centers which are specially organized for cryptocurrency mining purpose.
- Those mining companies sell mining power for certain cost to the miners. Most of the Bitcoin mining sites allows contract, based on the hashing power the miner chooses.
- The cryptocurrency mining site will have set of plans where the miner can choose a plan based on his budget and requirement.
- Once the miner purchases the contract, the mining process will be started and will be stopped when the mining contract ends. The mining contract period basically starts from six months and lasts up to few years.
- During the contract period, the miner doesn’t have to worry about the hardware maintenance and other failures. The mining company will take care of the entire maintenance till the contract ends.
Types of cloud mining:
There are two types of cloud mining. Based on the technical knowledge, the miners choose the best one that fits their requirement.
Hashing power contract(for beginners):
The hashing power based cloud mining contract is the most common and preferred by miners. In this type, the cloud mining site will sell the hashing power to the miners with zero maintenance contract. The miner can make a contract to use certain hashing power for certain period. The miner will receive the payout till the contract ends while the amount of the Bitcoins/Altcoins mined using the hashing power will vary each day based on the difficulty of the block which is not controlled by the miner or the cloud mining companies.
The hosted mining is similar to the hashing power contract, but here the miner will lease the hardware instead of hashing power. The miner will have to install the miner software himself to mine Bitcoin or Altcoins. The hosted mining is operations will be apparent because the miner will know that the entire leased hardware is used for mining. To lease mining hardware to mine, the miner should know how mining works and how to use the mining hardware to mine different cryptocurrencies.
Why hosted mining is better than hashing power contract:
- In the case of the hashing power contract, the miner can make a contract to purchase hashing power for certain period only for a specific cryptocurrency.
- But in the case of hosted mining, the miner will get the full control over the leased hardware. The miner can mine whatever cryptocurrency he wants by analyzing the profitability of the cryptocurrencies at that time.
- The functions of hashing power contract are not apparent which leads to many new scam companies target the inexperienced miners.
- Though hosted mining has better points to prove it is worth, there is best hashing power contract selling companies which reduce all the hardships that a miner will have to face running miner software using own hardware or third-party hardware.
- Few hashing power selling companies also protect the miners during the transition of a cryptocurrency to proof of stake.
Should you go for cryptocurrency cloud mining:
- The cloud mining is a legitimate way to mine Bitcoin and other cryptocurrencies. It’s like hiring a taxi when we don’t have a car or if we don’t know to drive a car.
- It’s about choosing the best company to invest your money to get profitable returns.
- I 100% recommend you to go for cloud mining if you have no idea how to mine using own hardware or if you don’t have time to manage the mining process.
Drawbacks fo cloud mining:
- It’s a known fact that the value of cryptocurrencies will change each second based on trading, proof of work etc. It is almost impossible to predict the value of the Bitcoin and Altcoins.
- So, when the miner buys a mining contract for a certain period, there are chances for the value of Bitcoin* against USD might decline. In such cases, the miner will have to face a huge loss. So, it is recommended for the miners to invest in contract with the minimum period.
- Similarly, the difficulty to solve a block will keep on varying as the miners solve the block easily. The Blockchain will increase the difficulty of the block to find the right one. In this case, the hashing power required to solve a block will increase.
- So, the older hardware with less hashing power and the mining contract for fixed hashing power will struggle to maintain its speed.
Pros and cons of Bitcoin/Altcoin cloud mining:
Advantages of cloud mining:
- The cloud mining is the best way to mine cryptocurrencies without mining device(s) and technical knowledge.
- Cloud mining requires zero maintenance from the miner part.
- The cost of cloud mining contract is low when compared to the profit until there is a huge decline in the value of the cryptocurrency.
- The cloud mining sites offer various plans to the individual miners to the big companies.
- We don’t have to worry about the heat, noise generated by the mining hardware.
- No worries about the electricity cost.
- The miner will not face a loss in the situations like the mining hardware becomes outdated and fails to make the profit.
- The cloud mining contract can generate us a huge profit just for investing a little money when the market price of the cryptocurrency increases.
Disadvantages of cloud mining:
- There is a risk of miners losing their money to fraud cloud mining companies.
- The miner will have zero control and the mining operations are opaque. The miners must buy hash power based on their promise.
- The miner cannot learn anything about mining. The best way to mine Bitcoins/Altcoins is by building own rig.
- The miners will face a huge loss if the difficulty of block increases and if the value of the cryptocurrencies declines.
- If the cryptocurrency switch to proof of stake, the entire contract is a waste unless the cloud mining company promises to arrange an alternative solution.
- Beware of cloud mining Ponzi and HYIP schemes.
List of best cloud mining sites to mine Bitcoin and Altcoins:
1. Genesis Mining:
- The Genesis mining is one of the oldest and established cloud mining sites in the world started in 2013.
- Genesis mining has become the leading hash power provider with over 1M people customers throughout the world.
- They have located their data centers all around the world to provide the best services to their customers.
- Genesis uses green energy to run most of the data centers and they are located in the coldest places in the world to reduce the heat effect and to exempt environmental issues.
- The Genesis mining contracts are mostly sold out within days due to increased popularity. So, new users should pre-order the hashing power.
Supported crypto coins – Bitcoin, Ethereum, Litecoin, Monero, Dashcoin, Zcash, Dogecoin, Peercoin.
Accepted payments – Credit card, Wire transfer, BTC, LTC, BCC, Dash.
- The Hashflare is the most transparent cloud mining company located in Estonia and deserves the first spot for their instant services.
- Hashflare promises its customers to provide the best service in throughout the world with low cost, maintenance free plans.
- They are already connected with the best mining pools and once the miner buys the hashing power, the mining process will start.
- The payouts start to flow just after 24 hours from the time of initializing mining process.
- If you’re planning to start with minimum custom investment, I recommend you to go for Hashflare.
Supported Crypto coins – Bitcoin, Litecoin, Ethereum, Dash, Zcash.
Accepted Payments – BTC, Credit cards, Payeer.
- The Minergate is the mining pool created by the cryptocurrency mining enthusiasts and it is the first pool provide services for merged mining.
- Minergate provides two types of services where the miner can buy hashing power to join their cloud mining services or join their mining pool use rented hardware or own hardware to mine cryptocurrencies.
- Minergate supports most of the cryptocurrencies. The Minergate is recommended for both beginners and advanced users.
- The Minergate will schedules daily payout and you can expect your first payout within 2 to 3 days from the day of commence.
Supported crypto coins – Bitcoin, Litecoin, Bitcoin cash, Zcash, Dogecoin, Monero, Bitcoin Gold, Digital note, Dash etc.
Accepted payments – BTC.