Mining in the Cloud, or Cloud Mining, allows you to mine bitcoins without owning any mining equipment (or mining hardware) or owning any mining hardware. By purchasing some of the mining power, you benefit along with other customers instead of buying Bitcoins or mining with your own equipment. With only a contract and bitcoin wallet,…
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The process of mining Bitcoin involves solving puzzles in order to create new bitcoins. The competition involves the use of special chips in computer systems to solve mathematical problems. Bitcoin mining options currently number in the thousands. Fraudsters use countless scam platforms to extort people, some of which are real. The reason some people are…
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Bitcoin mining is the process through new bitcoins get created while the transactions on the blockchain are being verified by the miners. The mining machines are solving complex mathematical problems in order to decide the validity of a transaction which requires either GPU, CPU or ASIC hardware to run continuously.
If somebody wants to join the cryptocurrency mining business but does not necessarily want to deal with the noise and heat the mining hardware can cause. If they want to forget all the maintenance involved with the mining rigs, cloud mining is the best opportunity to still enjoy the benefits of participating in mining. During the cloud mining activity, clients can purchase hashing power from a provider in exchange for certain daily or monthly fees. After the contract is started, the earnings from the mining – that is running on the mining rigs of the cloud mining provider – benefits directly the client’s account.
There are many cloud mining providers on the market who offer wide range of services. Prospective clients however must be very careful when choosing the right provider as there are several scammer working on the market whose only goal is to build a ponzi scheme or directly steal bitcoins.
When looking for possible cloud mining providers it is advisable to always check their ‘About’ section on the website. This page can tell a lot about the company, especially if there is no information on the site. If somebody is trying to hide themselves from the public on a market where trust is one of the main principle of the industry, it should be a warning sign that the company might not be providing legitimate services. Many providers just list general mission statements and nothing specific about the background of the firm, such as owners, founders or executive officers. It also worth doing a quick search whether the cloud mining names are coming up on and forums as unsatisfied customers are usually very loud in terms of complaining.
The mining facility is the heart of a cloud mining company. This is where they can buy the client’s trust or loose it forever. Due to security reasons, the cloud mining providers never disclose the exact location of the farms, to protect the equipment from damages and theft. However if the company doesn’t even provide the city where the mining rigs are located, that should be again a red flag, that the hardware, which should provide the cloud hashing power, doesn’t even exist .
As proof, providers often post pictures of the facility, these images worth careful examination. The pictures can tell a lot about the environment of the farm, like whether the heating is adjusted regularly and the electricity supply is sufficient. They can also provide information on the overall scale of the cloud mining business as the more machines they have, the more hashing power they can sell over the cloud. If the rigs are not organized and cables are hanging everywhere, it is not certain the provider can guarantee 100% uptime. As when a mining rig goes wrong, it can take a lot of time to fix it, if the rig is not even reachable.
Causion: The term cloud mining company is often abused by bitcoin high yield investment programs, which are nothing more than online scam sites. Those website interfaces trick peole into thinking they’d be serious investment companies, making their money basically with cloud mining or crypto trading. But that’s mostly not true as they use to be ponzi schemes which only live from user deposits and only as long as new users make new deposits, so the older users can get parts of those new deposits as their “return on investment”. Those Bitcoin HYIP sites mostly only last for a couple of weeks till they are again offline. Here is an overview about such investment sites running at the moment. So stay away from them – those are no real cloud mining firms.
Cloud mining providers are usually specified for bitcoin mining under SHA256 algorithm. However there are some company on the market who offers services for other altcoins under scrypt and X11 algorithms as well.
Depending whether the provider has it’s own pool, they can restrict the free selection of mining pools to their own pool only. This can significantly reduce the earnings from the mining activity if their pool is not profitable enough. The pool fees are around 1-2% and the payouts can be share based (PPS) or pay par last N share based (PPLNS).
It also worth checking the security level of the platform, since significant amount on money can be stored on the website, in terms of the mined coins. Using CloudFlare to protect the site from DDoS attacks is the minimum. It is advisable to use two factor authentication whenever it is possible and try to reduce the amount of mined coins in the wallet on the platform. Have them stored rather in cold bitcoin wallets. The registration process gives a first impression about the security measures of the site. If no captcha is asked for and the email confirmation includes the password given are strong signs that the service provider probably doesn’t care much about safety and security.
The pricing of the cloud mining contracts consist of two elements. One is the regular charge for the contract to obtain the cloud mining service. This fee can be one time fee or paid regularly. The other element of the pricing is the maintenance fee that should cover the electricity and cooling costs of the mining rigs and deducted daily from the earnings. Hashnest and Bitsrapid on the other hand opted to remove maintenance fees and they have built it intp the contract prices.
The pricing range of cloud mining is very wide. The cheapest bitcoin cloud mining contract on the market costs 0.99 USD per GH/s at OxBTC. The average price of the contracts are around 5-15 USD per GH/s. Some provider offers better unit prices if more hashing power is purchased, others just price bigger contracts just like small ones.
It is important to understand that the higher price does not necessarily mean better service, so prospective clients should always examine thoroughly the services of the providers as a whole, not just their prices. Also you should take a look into other options to get your crypto currency – you can just buy it online or you can trade bitcoin and other crypto currencies.
Understanding the bitcoin mining process can be a difficult job due to the process’s technical nature. However the providers can ease the decision making of their prospective clients by offering detailed guides on their services.
Many providers does not disclose the price of the contracts before registration on their landing page. In case users does not want to sign up right away, it worth checking the FAQ section and the Terms and Conditions pages to see whether it has information on the prices and fees.
A transparent, easy to use platform can build trust and direct many future clients to the cloud mining providers.
Participating in cloud mining is a great way to earn some side income as well as a fun way to obtain cryptocurrencies. Prospective clients however must pay attention to where they sign up to cloud mining services as there are many scammers and ponzi scheme available online. For those wanting to invest in hyip or ponzi schemes: Think twice if its worth the risk, all hyips / ponzis are scams where only the early adopters win and all others lose. If you enjoy the thrill, try a bitcoin broker instead and test-drive your trading skills.
