The explosive rate of bitcoin in 2017 made the whole world talk about cryptocurrency. Even those who have never been interested in bitcoin began to discuss cryptocurrencies, bitcoin technologies, and cloud mining. Today, cryptocurrency is intangible, but it is worth more than gold and oil. Interest in bitcoin and mining is fueled from all sides: news stories, Internet publications, and articles. Although the idea of blockchain and bitcoin appeared back in 2008, cryptocurrency is in demand on the market. Thus, cryptocurrencies are a unique and radically new generation of money created and working exclusively online. No state controls the issue and purchase of bitcoin, as the turnover of this cryptocurrency occurs at the expense of a computer’s network.
At the moment, cloud mining is rightfully the easiest method of bitcoin mining. People need to sign mining contracts with proven services and calculate the profits. However, there is an enormous number of resources, each of which has individual characteristics. In this regard, not all of them allow owners to earn money on cloud mining of bitcoin.
In general, it is a collective term used for sites that charge maintenance fees in exchange for cryptocurrency mining. Cloud mining is that miners do not need to build expensive mining farms, calculate power and profitability. Besides, miners do not need to constantly worry about reducing the energy consumption for working and cooling hardware. In this case, the users purchase only the hardware’s power from remote data centers, and the mining process takes place in the cloud.
In this article, you will learn in detail about miners, cloud mining of bitcoin, and the profits of this process.
Cryptocurrency Mining and Services
To understand the whole process of mining, you need to understand the cloud mining of bitcoin. Cloud mining is a collective term that means a company that allows bitcoin miners to rent mining hardware in exchange for a fixed fee and a profit share. Thanks to this method, miners may work remotely without buying expensive hardware.
This method allows a provider to extract cryptocurrencies without significant investment in the device for the arrangement of the farm. Besides, it is suitable for beginners since it does not require technical savvy in setting up equipment and analytical abilities of mining. Cloud mining companies often place their data centers in regions with the optimal costs of electricity. Some services try to reduce the cost of electricity for cooling by placing servers in areas with a cool climate.
It is worth noting that almost all cloud mining companies are engaged in fraudulent activities or work on inefficient business plans. For these reasons, the profits from mining do not grow, although the bitcoin exchange rate increases. Below is a list of all questions that reveal bitcoin mining:
Cloud bitcoin mining
It is no secret that cloud mining at home is unprofitable because of the high spending on the device. Moreover, knowledge, experience, and skills of bitcoin mining are required. For these reasons, users are looking for a cheaper way to make money on cloud mining. In this context, cloud mining is less expensive, as people rent mining rigs with hash power. Usually, such people are mining providers who care about clients and their profits. When cloud miners spend money on cloud mining, they give their share with such miners.
On the Internet, there are many investors and mining companies that work according to similar schemes. Most of these companies promise sky-high results and super-profits on cloud mining. However, in addition to the advantages, there are still disadvantages of such a cloud mining operation. The success of cloud mining directly depends on the terms of the contract and the company’s actions. The cloud mining service is responsible for organizing cost-effective mining. The advantages and drawbacks of this process are presented below.
- Minimal investment and knowledge
- Minimizing energy costs
- Minimizing time
- Mining multiple coins at once
- The possibility of collective mining
Among the disadvantages, miners distinguish the following:
- Fraudulent fraud and deception
- Network complexity and cryptocurrency exchange rate
- Variability of the terms of cloud mining firm
- Probability of terminated mining contracts
- No ability to change the contract
Take into account all nuances and risks of cloud mining to avoid financial losses and to meet with scammers.
Best cloud mining providers
With the growing popularity of cloud mining, there are many offers without attachments. Such mining sites have a fraudulent basis. It is a lie that lures customers with mining without investment and, by any means, pulls money out of customers. For these reasons, it is difficult to recommend any reliable cryptocurrency miners. However, there are some companies that you can trust.
1) Legit service
In this context, a legitimate service is a company that owns real-time mining rigs and mines bitcoins. However, keep in mind that it does not mean an ultra-profitable business and credibility in the global market. Among such firms, the following stand out:
- Genesis Mining
- Bitclub Network
Below is a brief overview of these services to choose the best option.
Genesis Mining is one of the oldest cloud mining services. Data centers are based in Iceland. The minimum contract price is $ 28, and the maximum is almost $ 13 thousand. The system offers several contracts and an individual tariff plan, in which the cloud provider can independently determine the conditions and set the hash power.
This platform is also a well-known cloud mining firm whose cloud mining pool has been operating since 2014. By joining this company, each miner can earn immediately without expensive hardware. As more people join the network, the company invests in even more resources and high-quality mining software. Typically, the primary cryptocurrencies of the transaction are bitcoin due to its transparency, a fast way to transfer funds between members.
HashFlare was created as a subsidiary of HashCoins, a firm that manufactures crypto mining equipment. Connected mining pools:
In 2016, the resource stopped cooperating with HashCoins and began purchasing mining equipment from other suppliers. Thanks to the increase in prices for virtual assets, the firm managed to attract many investors. To buy a hash rate on mining pools, you need to register on the site and create an account. In principle, the company works similarly to others.
The “lose-lose” scheme
The strategy of cloud mining is a “lose-lose” scheme. According to this strategy, an increase in the price of bitcoin means a drop in earnings. If the price of bitcoin falls, miners are unlikely to earn anything and may even lose money.
Typically, in addition to paying for a cloud mining contract, companies charge a maintenance fee. Usually, this indicator is calculated in dollars per unit of hashing power. In this process, the ratio of cryptocurrencies and fiat money occurs. For these reasons, revenue is sometimes not enough to cover this value. In such situations, the companies terminate the contracts without a refund. On the other hand, if the price of bitcoin soars, cloud mining becomes more complicated. It follows that it is better to buy cryptocurrencies and keep them. In this case, you can lose less money or earn more.
There are many reviews about cloud mining, mining pools, and terminated contracts during the crypto winter.
2) Scam mining pools
In addition to legal cloud mining, there are also fraudulent mining services in the market. They collaborate with each other, develop similar schemes to deceive and steal your money. Therefore, be careful when choosing a mining platform. Among such financial pyramids, the most famous are the following companies:
- Bitcoin Savings and Trust
A pyramid scheme is a fraudulent scheme, as a result of which users lose money. You invest money to participate in this activity, and as a result, you lose money. According to the reviews of many miners, cloud mining has something in common with financial pyramids. Such companies do not have equipment with cloud computing power and hashing power. It is a convenient business plan, as many people won’t press charges about stealing a few dollars. As a result, companies will go bankrupt or disappear with money and coins. These issues require a detailed understanding of the mining pool and cloud mining to return the money in force majeure situations.
Own Cloud Mining
Some cloud mining farms run on multiple algorithms (SHA-256, Ethash, and Equihash). Coin mining takes place at the lowest cost of electricity. During the mining process, everyone can switch between different coins, choosing the most profitable ones.
If you want to engage in mining, check these platforms in advance and study the reviews. Below is a step-by-step action plan for this scenario. By the way, it is also necessary to understand the blockchain before starting mining. A blockchain is a continuous sequential chain of blocks built according to rules. Blockchain, as a digital distributed journal, is designed to record financial transactions and everything that has value.
1) Find Links
Fraudulent companies are easy to detect thanks to references and reviews. You need to either find BitcoinTalk for information about this platform or go to BadBitcoin for a list of scammers.
2) Reasonable investment
The most vital piece of advice is the following. If you want to take up mining, do it gradually and never invest more than you can afford to lose. This ratio allows you to stay afloat in the event of a loss of money. Most companies (even one mining pool) operate as financial pyramids. Firstly, they pull money from the miners, and, for these reasons, they close.
3) Fraud test
For a better search for farms, a test has been developed to check bitcoin sites. This test allows you to identify fraudulent schemes and not lose money. It is the so-called series of questions that give excellent results on fraudulent plans. For more information, take the test here.
In such situations, the advertiser disclosure also helps people with non-logical theses and statements. Thanks to such concepts, miners can understand whether the farm is fraudulent or not.
4) Hash power
Pyramid schemes do not offer high-quality and high-speed hardware, which should have a high hash power and a well-established SHA-256 algorithm of the blockchain. You may easily detect scammers by the lack of such equipment with processing power.
Thus, cloud mining is a popular form of earning money online on bitcoins. It is a simple method to start getting cryptocurrencies for beginners with minimal knowledge and costs. The mining pool does all work. The miner can only choose a reliable platform with a good reputation and invest their funds to make a profit in the future. If you are seriously planning to dive into the bitcoin sphere, it is better to buy it rather than mine it. There are dozens of companies in our world, but they do not have reliability and security.
Which Cloud mining is legit?
Not all companies in the world are legal for mining. Among the most legitimate firms with real hardware are Genesis Mining, Bitclub Network, and Hashflare.
Does cloud mining pay off?
Unfortunately, mining is risky and unsafe. Despite a mining company with excellent hardware, an SHA-256 blockchain algorithm, and low energy costs, mining rarely pays off. Most companies are fraudulent and shift the responsibility to the customers.
How does cloud mining work?
It is a convenient way to get digital coins. You are freed from buying equipment, from complex farm assembly, software configuration, and control of the proper operation. With the help of the services, you can quickly and easily invest since you only need to register on the site, choose a suitable contract, and hash rate.
Is cloud mining legal?
Some companies are engaged in legitimate mining. However, most pools are illegal and fraudulent. In our review, we have provided our observation of the most reliable means of cloud mining you can trust and use to mine crypto.