What is Cloud Mining?
In its simplest terms and for the sake of pedantic clarity, cloud mining can be thought of as a virtual model of mining cryptocurrencies which entails acquiring Central Processing Unit (CPU) power or cloud from dedicated hardware resource centers, which effectively bypasses the needless hassle of having to set up the physical hardware requirements. These dedicated hardware resource centers that you are doing business with are the real players in the mining of cryptocurrencies like Bitcoin, Ethereum, Litecoin, and lots more. Essentially, it’s like investing in their business so as to reap specific dividends. Cloud mining effectively eliminates the need for any kind of in-depth technical know-how of mining hardware; there is no purchasing of expensive hardware or obtaining of classified devices and no ordering, setting up and maintaining of cryptocurrency hardware. All that is really required is getting in touch with the best cloud mining companies (some of which will be revealed in the course of this work), and financially committing them via a cloud mining contract to do the mining with their already-established resources on behalf of the investor, with a view to securing specific rewards. The concept generally involves using shared processing power run from remote data centers. This enables users to acquire cryptocurrencies without necessarily managing the hardware, as the mining rigs are housed and maintained in a dedicated facility under the mining company’s ownership and the customer is expected to register with the mining company and purchase cryptocurrency mining contracts or shares. A home or personal computer for communications and optional cryptocurrency wallets make up the only necessities.
How Does Cloud Mining Work?
Subscribing to cloud mining services is the ideal method of acquiring cryptocurrencies for those who are lacking the technical knowledge and/or can’t afford to run their own software or hardware (staggering electricity bills inclusive). And since we all can’t be geek and rich, the vast majority of people fall in this category. The onus is on you to determine which service provider you want to do business with. And to helping you in making this vital decision, you can take a cue from a number of cloud mining services reviews where top mining platforms are x-rayed on a regular basis, including the most trusted crypto mining sites. Once this is done with, you can then proceed with determining which deal is best; be it a 500GH contract or a 1000GH contract, and whether it’s for the long term or short term. There are reputable websites all over the web that offer solutions when it comes to going over the contracts of renowned mining companies and enabling users to make the best choice of investment. What follows after these initial phases is payment of the upfront cost as stipulated in the mining contract, either in cryptocurrency or in its fiat-equivalent. All things being equal; the company will take care of the mining and remit a regular amount of cryptocurrency into the personal wallet of the investor. In a world crawling with conmen and charlatans – each promising its own idea of Valhalla and the Seventh Heaven, the trick is in finding trusted avenues that will guide the user towards reaching out to genuine providers to ensure that he/she invests in the safest choice
Types of Cloud Mining
Generally, there are three forms of remote mining available at the moment. Hosted Mining: This model is ideal for users with some degree of knowledge of what crypto mining entails and who seek high level of control over their mining hardware. In this model, a remote data center plays host to the mining hardware and the setup and configuration of the mining hardware are under the full control of the user. It is just like leasing a mining machine that is hosted by the provider. It also entails that maintenance and electricity costs be taken care of by a fee which the miner pays to the hosting company. Remote hosted is advantageous in that it gives the user tight control over the mining process, maintenance support and subsequent ownership of the hardware. The risks associated with the procurement of expensive hardware and very high cost of entry, both in terms of investment and technical experience, are still problems to contend with, though. Leashed Hashing Power: This is unarguably the most popular type of cloud mining. In this model, a miner purchases a part of the mining power of hardware hosted and owned by a cloud mining services provider. It is service provider’s job to configure the hardware, maintain uptime and select the most efficient and reliable mining pools. It allows users to lease an amount of hashing power, without having a dedicated physical or virtual computer. Instant connection, fixed maintenance and electricity fees are guaranteed with this model. There is also no need for any technical knowledge. Users have to be up to speed with the mining process for obvious reasons, the model, however, significantly cuts down on the need for any form of hardware expertise or significant configuration/implementation cost. The leverage afforded users to purchase as much mining power as they wish indicates that the level of investment is only an index to the miner’s ambition, and this entails that the entry cost and subsequent risk are significantly cut down than when compared with the remotely hosted model. Virtual Hosted Mining: This type of mining requires a certain degree of knowledge of crypto mining on the part of the user. In this model, the user is expected to create or design something of a general-purpose, virtual private server. What then follows this virtual server creation is an installation of the user’s mining software. It affords users the luxury of exerting some amount of control over the mining activities by virtue of the mining software which the user can monitor.
Cloud Mining Risks and Profitability
Like every other investment opportunity, cloud mining has inherent risks and there are many factors which affect its profitability. Although finding a trustworthy mining company is one way to minimize risk, cloud mining is still not immune to the occasional flaw. This stresses the need for users to invest only as much as they can afford to lose. In recent times, eyebrows have been raised over such issues as transparency, changes to active mining contracts, hacking, price volatility and legal issues with cryptocurrency affiliate programs. The profitability of the mining contract is hinged on the current price of the cryptocurrency. Basically, the purchase of a mining contract is for a specific algorithm. Mining any cryptocurrency using this algorithm is a prerogative of the mining company. The current value of the cryptocurrency remitted by the mining company in the fiat market is what comes in the way of profit. And the prices of cryptocurrencies are so unstable and unpredictable, they are always fluctuating. So, profitability is always relative to the current price of the cryptocurrency in the market. Cloud mining provider failure/mining hardware failure, upfront hardware cost, hardware delivery time for pre-orders and the tendency of hardware to become obsolete, are other factors that affect cloud mining profitability for the Average Joe.
How to Choose the Right Cloud Mining Company
With so many dubious schemes and scam sites out there, one would want to cautious when choosing a cloud mining site. Vetting and background checks are two things that cannot be overdone when making a choice of a mining platform to sign up on. In making that decision, it is important to be on the lookout for these tells;
- Duration of Service: Longevity is usually an index of sustainability and reliability. A platform that is known to be paying and profitable is sure to be around for a very long time. Reputations are built with time and banking on a newbie in the business is a risk every user should rethink.
- Proof of Mining Activities: Platforms that cannot provide proof of their cloud mining activities, such as their mining pool payout address, should be steered clear of. Such data should be made accessible to and verifiable by the public and if mailed privately by the company to the user, it is a bad sign.
- Percentage of Income on Invested Amount: If the deal seems too good to be true, chances are it is. Incredibly high profit on a meager deposit is a huge turn-off and a scam alert.
- The types of Cryptocurrency on Offer: Scam sites tend to have a compendium of cryptocurrencies in the offing. Each cryptocurrency has its own nuances of working with the mining algorithm and requirements for hardware, which makes it very expensive to deal with too many of them.
Between Data Mining and Cloud Computing
Pitting data mining against clouding computing is like looking back to a WrestleMania Main Event featuring ”Computers vs Electronics” that happened two decades ago. It is best advised to view cloud computing as the serving side and data mining as the side that is being served. And this should not be misinterpreted to imply that data mining cannot be done without cloud computing or cloud computing’s only application is data mining. It is like cake and icing – better together. Cloud computing is built on the backs of clusters of servers, which may be remotely located, handling tasks. Data mining is in the business of extracting structured information from the coffers of unstructured or semi-structured web data sources. Organizations are enabled to centralize the management of software and data storage, with an assurance of efficient, reliable and secure user service, through data mining in cloud computing, Reliable cloud mining platforms can be discovered from online reviews. These reviews are available in a number of trusted websites. Cloud mining can prove advantageous for the average crypto enthusiast and reap the benefits, a thorough scrutiny of the deals on offer and the ratings earned by various cloud-based platforms is imperative. Cloud mining eliminates any need to buy hardware or pay for exorbitant electricity bills. On the leaderboard, Hashflare and Genesis Mining make up the largest and most reliable cloud mining platforms. They are pacesetters in the industry and are currently leading the rest of the chasing pack in the grandest scheme of things.