The process of creating bitcoins or any other cryptocurrency is mining. And if you are unable to afford the whole system by yourself, you will work on rented ones. Thus, using rented computing power, hardware and software to mine any cryptocurrency is cloud mining.
Furthermore, just like we rent out apartments through real estate agents, there are firms for cloud mining too. They offer all of their services so that you can mine cryptocurrency. All you have to do is to create an account and you can work remotely, no need to go there too. Furthermore, you have to pay the rent too.
Through these firms, mining cryptocurrency is becoming widely accessible for a huge number. Therefore, if you are intelligent enough and want to mine coins, no need to worry about the equipment. You can pay some rent and make use of someone else’s equipment.
Once you are done mining your coins, the next step is more important.
What will you do with them?
Source: medium.com
Of course, you cannot always mine cryptocurrencies, you have to manage them as well. And by management, we mean that how you invest it or sell it to earn more money. For example, you can use Ecos, which is a crypto investment platform, check out their various deals.
Besides, creating an account and buying and selling crypto, you can also get free giveaways. Once you install their app, they will provide you with some giveaways. Likewise, they also carry out auctions. You will need to use Telegram to take part in it. Similarly, they also offer lucky games. You can play the game, take part in the contest and earn more.
How it works
Cloud mining is no different from local mining. The only difference is of facilities. In local mining, you will buy high-power computers and the best software. Furthermore, you will also need chillers and air-conditioners to keep the facility cool. All this will require a huge sum of amount and you will also need to pay for the electricity bills. Because everything will consume a lot of power.
However, in cloud mining, you can get everything from someone else. All you need to do is to pay them for making use of their facility and mine as many coins as you can. You can either get full control over the coins you create and pay them for their services or you can pay them with the coins and they will manage the crypto coins and pay you through the profit.
In the end, you can just leave the equipment to the facility provider. It is no more your headache to manage them.
Different models in cloud mining
Even though you are renting out the services from a firm, still there are two models of cloud mining. These include;
- Hosted mining
- Leased hash power
1 – Hosted mining
Source: popularmechanics.com
This is the most popular model that various miners use. In hosted mining, you will either purchase the hardware or will get it on a lease from the miner’s facility. The miner is completely responsible for taking care of the equipment and hardware and also software. In short, he will be responsible for managing everything related to the equipment. He has to make sure that everything works smoothly.
Thus, through this model, you will have all the control over your coins. Whatever you mine will be yours and you will have all the rights to manage it. Furthermore, through a shared facility in hosted mining, it will be easier for you to manage the expensive rates of electricity and the management.
2 – Leased hash power
Source: phemex.com
The other type of model is the leased hash power. If you do not know, hash power is the other name for computer power. So now it makes sense? Instead of the whole equipment and facility, you are going to lease the computing power from someone else.
In addition to this, you won’t mine coins for yourself. Instead, you will do the job and get your share through the overall profit of the firm. This is just like doing a job for a company. You will do the work and get your salary. Likewise, in this model, you will mine coins and the firm will manage them. And you will get your share of efforts through the profits.
This is the best option for miners who are not good at managing things. They can do the technical work but are unable to understand the market and make profits through this. Through the use of this model, miners can earn more than what they will get while doing a job. Furthermore, they won’t be under the control of someone else. But are their boss. This is just like doing a freelancing job.
Are there any advantages of cloud mining?
Source: pexels.com
Cloud mining offers amazing benefits for miners and for everyone else too. For example, it requires less investment in terms of equipment facilities, hardware and also recurring cost.
Furthermore, if someone is earning less through doing a job, he can make use of his technical skills and earn more. After all, the most important job in the crypto industry is miners. They are the backbone of cryptocurrency. If they do not mine coins, what will we do? Because there won’t be any coins and everything else becomes useless.
However, cloud mining is not only a positive approach. Although the intention was to earn more profits but there are always negative aspects too.
There is a possibility of an industry scam. After all, you are using someone else’s facility. What if they do not give you the return you deserve?
Likewise, there is another possibility of fewer profits. Although miners earn the most but if the demand is vulnerable, miners won’t be able to earn more. A vulnerable demand of a cryptocurrency means that there will be a reduction in the hash power and thus, the miner won’t get what he works for. The profit margin will reduce to a high extent.
