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- 1 Crypto cloud mining is the process where the user utilizes the distant datacenter with a shared processing power.
- 2 Without managing the hardware, the user is capable of mining bitcoin or any other cryptocurrencies.
In simple terms, crypto cloud mining is a process of renting computer power from a remote data center in order to mine cryptocurrencies. The mining rigs are housed and maintained in a facility owned by a mining company. The company will look out the fees and expenses related to mining. The customer has to register and purchase mining contracts or shares.
To start cloud mining in crypto, a few things are needed, the first being an internet connection. The second thing needed is an account with a reputed cloud mining service. Thirdly, to mine any cryptocurrency, one needs to have a cryptocurrency to start with. This can be used to pay for the resources and to invest them in operation. The last but not the least requirement is a crypto wallet which is used to store the mined coins.
Cloud mining is a good source of passive income as one can save big amounts. There is no requirement to purchase the hardware, cooling, and ventilation equipment. Thus, one can save on electricity and money for any equipment.
On the other hand, it is also regarded as a scam because many crypto companies promise unrealistic returns on investments. Many of these companies are Ponzi schemes in which returns are provided to early investors utilizing the money invested by new investors.
Another big reason why it is considered a scam is that these companies do not disclose the reason behind their operations. They lack transparency on the grounds of location, number of data centers, energy consumption, and hardware usage.
Crypto Cloud Mining Models to Earn
There are two types of cloud mining models to earn money from.
- Host Mining: This type of mining model helps to earn more profits. Miners have to buy or rent the mining rigs on mining. Then, miners have to pay for the setup and the required maintenance. This mining model gives more control over the earned rewards.
- Leasing Hash Power: Good hash rate indicates success. It is very important to have a good hash rate in this type of cloud model as one gets a share in the profit made by mining. This is done by mining by signing the plan offered by the mining company. In this model, there are no charges for maintenance or setup. The profit is equally distributed to all the users in proportion to their respective shareholders.
Summary
Cloud mining is very profitable, but it depends on the type of model one chooses. It also depends on the power to the miners and the market state. If the market state is bearish, then it definitely reduces the chance of profit as one has to hold the coin instead of selling it, whereas a bullish market increases the chance of profit.
Thus, it can be said that cloud mining in crypto gives the chance to mine any cryptocurrency and the company takes care of the expenses and issues related with mining.
Nancy J. Allen is a crypto enthusiast, with a major in macroeconomics and minor in business statistics. She believes that cryptocurrencies inspire people to be their own banks, and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning. She frequently researches, and posts content on the top altcoins, their theoretical working principles and technical price predictions.
