The Ultimate Guide To Cloud Mining
Everyone dreams of mining bitcoins. But bitcoin mining also entails maintenance of hardware. However, there is a solution to this – cloud mining! So, what is bitcoin cloud mining? Let’s see!
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Bitcoin Cloud Mining
In simple words, cloud mining refers to making use of shared processing power operated from distant data centers. You just need a home computer to communicate, local bitcoin wallets etc.
Types of Bitcoin Cloud Mining
Roughly, there are three types of bitcoin cloud mining:
- Hosted: You can lease a mining machine that is, in turn, hosted by the provider
- Leased: You can lease a particular amount of hashing power, without the need of a dedicated virtual or physical computer (it seems like this is the most popular type of cloud mining)
- Virtual: You can create a private virtual server and then install in it your own mining software
Will It Be Profitable?
You might know the profitability of mining. However, those apply to your hardware and not cloud-mining. However, you can use the same calculating methods to this too excluding some factors. For example, hardware parameters ask you about your electricity expenses and even sometimes your initial investment in hardware.
In the case of cloud mining, the electricity bills are paid by your host; so you can fill the section of electricity cost with your monthly mining bill.
However, the conversion is not so straightforward. Hardware miners can find the monthly running expense by multiplying electricity cost by the energy consumption of the unit and with a conversion factor of 0.744 (ratio of seconds every month to joules of power per KWh).
For cloud mining, however, the calculation is opposite, because the host gives you the monthly operating cost. So, you have to calculate an equivalent expense per kilowatt hour to enter into the mining calculator.
Cloud mining has its own advantages and disadvantages.
Advantages of Bitcoin Cloud Mining
- Your home remains cool and quiet, because of elimination of the continuously humming fans
- No extra costs of electricity
- No hassle with selling the equipment when mining stops giving profit
- No ventilation problems in home with the hot equipment
- Increased risk of fraudulence
- Obscure mining operations
- Less excitement (if you love system building)
- Reduced profits
- Contractual cautions that mining may stop based on the worth of bitcoin
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