The last couple of months the internet and all media platforms have been buzzingon the overly booming cryptocurrency rather known as Bitcoin.
Before you do here is a little schooling. Bitcoin is a digital form of currency that uses cryptography to enable transactions and asset transfer. Every Bitcoin investor is currently interested in knowing how they will make the most out of Bitcoin through mining.
The transactions in the ledger bring about the formation of the blocks which is eventually chained to another longest available block forming what is called the blockchain. There are various types of mining but the one I will break down for you here is cloud mining.
Bitcoin Cloud Mining
I know you are thinking, so many technical/fancy terms, right?
Not to worry am thinking that too, the only difference is that am the one explaining this to you, but yea, I think the terminologies here are a little over the top, I mean cryptocurrency, Bitcoin Mining and now Bitcoin Cloud Mining, calm down I got you on this one.
In simpler terms, cloud mining is leasing Bitcoin mining hash rate from a remotely located Bitcoin mining data center via a service provider, which is a company acting as an intermediary. If you want to cloud mine, all you have to do is go through the different tokens available and purchase a given amount of hashing power often quoted as GH/s-Giga Hash per second. Later, depending on your goals, you can decide to mine alone or join a mining pool. I advocate the later for obvious reasons. The more you gang up, the more the bounty.
Often, these data centers are located in areas where there is cheaper electricity. This enables easy mining.
The data miners do the entire job for the investor like hosting it and enabling remote connection of these miners as you continue earning BTC as compensation from your leasing “your” computer hashing power.
Advantages of Bitcoin Cloud Mining
To start off, with Bitcoin cloud mining you get instant activation to mining. You start experiencing the gains of mining right away and the delay of valuable mining days is eliminated.
There is also no risk of hardware failure. The data center provides you-the investor with an up-time and payout that is guaranteed. It covers all the cost in case of hardware failure or maintenance.
Cloud mining spares the investor from the high electricity bill, heat and noise generated from owning mining hardware. You don’t have to cool anything neither are you required to locate your computer in a garage somewhere. As an investor, you access everything from your desktop. All you do is join a mining pool and watch the money pile up.
Disadvantages of Cloud Mining
Like every other thing under the sun, cloud mining also has its disadvantages.
First, you should be fully aware that many Bitcoin cloud mining companies will not give you full hashing power. This means that as an investor you will be limited to the mining pools you can access and use.
You also should be aware that the conveniences of cloud mining certainly comes at a cost and the gains will definitely be lower compared to those of investors who use their own hardware.
Cloud mining is also somewhat a risky venture as there are so many fraudster companies coming up using Bitcoin mining to scam people.
How profitable your cloud mining is depends with the kind of cloud mining company, the token chosen and if you decide to join a mining pool or not.
Whichever choice you make, you should understand that in cloud mining, you will only make the profits when the Bitcoin you are mining is valuable than the cost spent running the cloud mines.
Do you due diligence and of course, stay of the radar lest you be scammed.