What is Cloud Mining Bitcoin ? Know Cloud Mining Benefits & Types of Cloud Mining
Cloud Mining is the process of mining bitcoin using a remote data center with the shared processing power. This type of cloud mining bitcoin basically allows users to mine bitcoin or any other cryptocurrencies without installing all hardware and related equipment. There is number of organizations that permit users to open an account with them and take part in the process of cloud mining at a basic cost. This cloud mining process makes mining accessible to a large number of users over different locations. It is a mining pool where each participant buys a certain amount of hash power. In this, each participant is having a legitimate share of the profits depending on the proportion of hash power bought by them. As cloud mining bitcoin is done through the cloud so, it ignores some issues like energy cost, equipment maintenance.
Cloud Mining Benefits
There are various possible benefits of using cloud mining process and all of them are discussed below:
- Quick Activation: In this, a user needs not to wait for the delivery of bitcoin hardware, which will waste lots of time. Simply buy GH (Gigahash) and begin the mining process quickly. In cloud mining, a user needs not to send back the faulty equipment as it minimizes the chances of being let down by the suppliers of mining equipment.
- Minimize Risk of Hardware Failure: It is the duty of data center to provide hardware for the mining process and cut downs the hardware failure, maintenance and configuration cost. It is a quiet and cooler home means there will be no constantly humming fans.
- No space for Heat or Noise: In real, the cloud mining bitcoin are very noisy and generates heat. But with the help of cloud mining, a user needs not face any of the noise and heat-related to mining. Moreover, there will be no ventilation issue also through hot equipment. Therefore, no need to worry about the cooling system, backup generators, etc.
- Cut down the Electricity Bill: In general, miners used lots of electricity but if a user is using cloud mining, then all bills will remain the same. It is because the cloud mining organizations usually get a huge discount on electricity depending on their location, or bulk pricing. Thus, there will be no added electricity cost.
Drawbacks of Cloud Mining
There can be some risks also while using cloud mining, which we need to be considered before using and are listed below:
- Risk of fraud: There are lots of fraudsters out their who are using cloud mining bitcoin industry in order to take advantage of the users who want to increase their bitcoin holdings. So, there is always a chance of bog scale frauds through this.
- Less Profit: Total profit margin in the cloud mining is small because operators need to pay off all the conveniences of cloud mining. Thus, it results in lower profits in comparison to expectation. Apart from this, there are some contractual warnings also to cease the mining operations based on the cost of bitcoin.
- Lack of control: Most of the cloud mining firms do not provide total control over the hashing power. In addition, most of them not even allows users to choose the mining pool of their choice. So, there is no proper flexibility and control.
What are the Different Types of Cloud Mining?
However, there are total three types of remote mining that one can use and are discussed below:
- Hosted mining: It is a lease mining machine, which is hosted by the provider. It means a user will send its mining machine to the organization that will offer electricity, cooling, and configuration.
- Virtual hosted mining: In this, a general purpose virtual private server is created and a user can install their own mining program or application.
- Leased hashing power: SO far, this is the most famous and widely used method for cloud mining. Here, a user can lease the amount of hashing power without using a dedicated physical/ virtual computer.
After knowing all about cloud mining bitcoin, users will question is this cloud mining is profitable in actual or not or what are the cloud mining benefits? However, the profitability will totally depend on the type of cloud mining that one is using. And, if the cost of running cloud mining is large then the amount of bitcoin a user is mining, it becomes unprofitable. Moreover, it is really difficult for a user to calculate the actual profit. So, it is always suggested to do proper research and evaluation before using bitcoin cloud mining.