What is Cloud Mining for Cryptocurrency and How Does it Work?
Today, the methods of earning them, and this is only possible with the help of mining, have expanded, and the creation of farms is gradually giving way to a more progressive and convenient way – cloud mining. Let’s try to understand what it is, how it works, and how it differs from standard mining.
Cloud mining, how it works
In English, the word mining means mining. The name is reserved for the activity of maintaining a distributed platform created to conduct transactions and create new blocks in order to receive rewards in the form of commissions or emitted Bitcoins. Individual cryptocurrency mining requires a large financial investment and is becoming less and less justified, with the emergence of large data centers built on the use of specialized ASIC devices.
Cloud mining began to gain popularity about two to three years ago. The method is quite simple: instead of buying equipment and creating your own farms, you buy the power at a cloud mining service. The algorithm of its creation and functioning can be represented as follows:
- The company creating the service buys equipment, installs and configures it (as a rule, these are very large computing capacities);
- A website is created, where all the information about the company, its technical capabilities, prices for services, and terms of contracts is posted;
- A user wishing to purchase part of the capacity registers on the site, chooses the terms suitable for him and rents this capacity for a certain fee;
- As a result of the deal, the lessee receives a portion of the company’s profit in accordance with the investment made.
Today there are several of the largest, most reliable and proven services for cloud mining. The most reliable of them is minery mining hosting service.
Advantages of cloud mining
Unlike individual standard mining, working with a cloud service has a lot of undeniable advantages:
- No large initial investments are required because ASIC devices are not cheap at all, but they are purchased by the company itself;
- There is no load on the home power grid and no electricity bill;
- No responsibility for the operation and maintenance of equipment, these worries are assumed by the company, and the user gets a passive income;
- High, predictable profitability, which makes it possible to double the investment in a year;
- Opportunity to earn various types of cryptocurrencies;
- Additional earnings from referral programs.
Is cloud-based cryptocurrency mining legal?
Cryptocurrency mining is legal in most countries and the process is fully covered by the law. Note, when we say “legal,” we don’t mean reliable, reputable or profitable. We only mean the fact that the cloud mining provider actually owns and operates the bitcoin mining equipment itself. In that case, the cloud mining process is a win-win model where both the provider and the customer receive a steady profit from the cooperation.
Unfortunately, in addition to legitimate cloud mining companies, there are many scammers on the Internet. One of the common signs is the so-called “pyramid scheme”. In this case, you have to invest money to pay those who came in first. In other words, the company doesn’t actually own any mining installations. And the funds you pay are used to pay the “senior” members of the pyramid and the company itself. We strongly recommend avoiding any fraudulent schemes in cloud mining. There are many expert reviews on the internet to help you choose a reliable legitimate cloud cryptocurrency mining site in a completely legal way.
Summary
In general, cloud mining is a breakthrough technology that allows you to earn cryptocurrency without using the most advanced equipment and technical knowledge. There are many legitimate providers that allow crypto investors to earn bitcoins and altcoins by renting hash power mined by installations in remote data centers.
The profitability of cloud mining depends on many factors, such as the type of contract, hash rate, and so on. You also need to find a reliable cloud mining platform to earn cryptocurrency with zero risk. If you’re new to cloud mining, you’re better off investing a little bit at a time to create a stable passive income within a year or something like that.
