The concept of “cloud mining cryptocurrency” appeared relatively recently. A few more years, the cryptocurrency was perceived as something ephemeral, because the optimists were engaged in mining mainly for personal purposes only. The situation changed dramatically in 2016, when large international corporations became interested in Bitcoin. Up to this point, large farms (computer systems for mining – creating block chains and issuing cryptocurrency) were located only in China, which accounted for about 85% of all transactions with cryptocurrency.
Everything changed radically in early 2017. A number of fundamental factors led to the growth of not only Bitcoin, but also other cryptocurrencies several times. Miners instantly bought up video cards and hardware, taking up the most profitable cryptocurrency. However, they could not compete with no less rapidly growing farms. This is how the earnings on cloud servers appeared.
Cloud mining cryptocurrency: the essence and benefits
Cloud mining cryptocurrency has replaced classic mining and collective pools. Its emergence was preceded by increasing competition and complexity of mining algorithms. At the dawn of mining, the capacity of a private miner was quite enough for work. Later, to speed up the process (from 2013), private miners began to unite in collective pools. Their essence was to combine the capacity for competition with the farms and the distribution of the resulting cryptocurrency proportional to the capacity.
Pooling remains now, but the combined power of pools is inferior to the capacity of special servers. The essence of cloud mining cryptocurrency is that the miner rents part of the server. Miner is not tied to the capacity of the pool (which may change as users leave the network), he already knows the characteristics of the server in advance. Mining does not occur on the miner’s computer (solo mining), but on a dedicated server (cloud mining).
The advantages of cloud mining cryptocurrency:
- no electricity costs, quiet home environment without a constantly working computer;
- no need to invest money in the purchase of special equipment and its subsequent upgrade;
- there are no problems with equipment maintenance (cooling, repair, etc.).
Disadvantages of cloud mining cryptocurrency:
- with the growing popularity of the service, more and more services appear that are disguised as powerful servers. Their task is to collect rent from the miners and disappear;
- longer payback. Renting a server is also worth the money. And let in comparison with the costs of personal equipment is not so simple, in some cases, cloud mining may be more expensive than solo mining. It depends on the rate of cryptocurrency and its volatility;
- lack of excitement that miners receive from home cryptocurrency emissions.
The principle of working with the cloud service consists of the following actions: first, the miner passes the registration on the service and pays the rent. The return on investment is about 6 months, payments are automatically distributed every day. The equipment belongs to the service for the rent of which the miner pays. The main parameters of the cloud service: type of equipment, type of remuneration, fee for capacity (H / S …). The contract is usually for 1 year.
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