What is Cloud Mining? #Cloud_mining involves purchasing a certain hashing power from a central body that manages and owns one or more mining farms. Let’s say, for example, you want to buy 10 TH/s of bitcoin mining power from one of the cloud mining platforms.
Such platforms will virtually rent out some of their bitcoin mining hardware that can achieve the desired hash-rate at a certain market price. Usually, the users pay an initial fee that varies according to the hash-rate, which allows them to enter into a contract with the entity offering the service for one or more years.
After that, every month a part of the revenue allocated to the users’ hash-rate share is retained by the company, both to pay the operating expenses, such as electricity, cooling, maintenance and other, and as company profit.
In detail, an entity offering a cloud mining service owns one or more mining farms around the globe. All ASICs and devices for bitcoin or other #cryptocurrency mining are located within these farms. So, if a company sells a total power of one PetaHash/s (i.e. 1000 TH/s) on its website, it will need to have a number of machines capable of delivering a total #hashrate of one PetaHash/s.
Usually, a company opts to offer a cloud mining service to minimise ROI times. By selling virtually its own hashrate, in fact, the entity can repay most of the initial hardware investment in a very short time, rather than directly mining cryptocurrencies for itself.
What are the Benefits of Cloud Mining?
1) No technical knowledge required
For the beginners looking on Google for ways to mine bitcoin, this is a very simple and fast service to use. In fact, it requires virtually no real knowledge of cryptocurrency mining.
There is no need to know what an ASIC is, what a mining pool or a mining farm is, it is not necessary to know how to use mining tools, what protocols to use and how to connect to the mining pool (Stratum or otherwise). It is enough to simply create an account, pay the relative fee according to the hashrate one intends to buy, keeping in mind that the greater the hashrate, the greater the revenue will be, and activate the service. The earnings will be credited directly to the user’s account.
2) No need to purchase hardware
Another advantage of cloud mining is that there is no need to purchase any mining equipment. This means that you don’t have to study which are the best ASICs or video cards for mining, which saves an awful lot of time. For the nerdy user, buying, installing and tuning hardware is perhaps the most fun part of mining. However, for those who do not have knowledge of the sector all of this time and studying is spared.
Perhaps the real good thing about cloud mining is that, since you don’t really own a certain ASIC or GPU, there is no need to worry about devaluing and updating your equipment. The actual mining, with all the related technicalities, is a black box for the end users. And of course, all this will end up costing them a great deal.
3) No operating costs, no heat and no noise
Have you ever had the chance to touch an Antminer S9 that mines bitcoin? It is a machine that consumes 1500 Watts per hour, produces a lot of heat and, as a result, emits a deafening noise due to the cooling system.
It is easy to see that these are not devices to be kept at home. These devices require a suitable environment with good ventilation, away from or isolated from the living space. The same goes for mining-rigs with multiple GPUs, although in this case, the noise level is usually lower.
Having one or more ASICs for mining bitcoin also requires a large amount of electricity. Domestic energy supply contracts usually start from a minimum of 3 kWatt. However, with one or more 1.5 kW ASICs each, it becomes unsustainable to power both the home and the mining machines at the same time for small contracts.
Therefore, who for example lives in an apartment, will hardly be able to mine bitcoin in the house due to all the constraints above mentioned. That’s why cloud mining could be the only option.
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