Bitcoin or any altcoin mining requires a relatively big investment if a miner plans on using their own mining machine. If the miner doesn’t want to buy the necessary hardware there is always the possibility of cloud mining. Cloud Mining is the process of bitcoin mining using a remote datacenter with shared processing power. This means one only needs a home computer for communications and optional local bitcoin wallets. The mining machinery is held and managed in a facility owned by a mining company and the customer simply needs to register and purchase mining contracts or shares.

At the moment, there are 3 types of cloud mining. Hosted mining refers to a lease on a mining machine that is hosted by the provider. There is a form of cloud mining based on a virtual hosted mining. This is possible by creating a (general purpose) virtual private server and installing one’s own mining software. The third and most popular form of cloud mining refers to leasing hashing power. One can lease an amount of hashing power, without having a dedicated physical or virtual computer.

Advantages of cloud mining, as opposed to mining with a mining machine, include a quieter home (mining machines make a lot of noise). Also, there are no added electricity costs. Mining machines can use up a lot of electricity. There is no equipment to sell when mining fails to be profitable and no ventilation problems with hot equipment. In the end, there is a reduced chance of being let down by mining equipment suppliers.

Disadvantages of cloud mining include frauds, as there are many cloud mining scams. In comparison to a mining machine, it’s less profitable, because cloud mining is a provided service, meaning that there are some extra costs. Also, it could be said that cloud mining is less flexible than mining with a machine.

It is important to note, before any mining, whether one mines with a machine or through cloud mining, research should be done. Write down how much profit is expected and how much is realistic. Earning big is more likely to happen with machine mining but if one wants to earn smaller amounts of Bitcoins, and is also prepared to be potentially scammed, cloud mining is an option.

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Posted by Min Park

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