What is cloud mining?
Cloud mining is the production of Bitcoin, Litecoin, Zcash, Dash, Ethereum, and other cryptocurrencies (more than 1400 altcoins), using special cloud services, accumulating capacities in their data centers, and farms. This is a new model of earnings, which creates groups (mining pools), with one goal: to obtain more revenue, in comparison with the usually distributed mining, due to the management of equipment on the part of the contractor, which solves all issues on the technical and software components.
The profitability of cloud contracts is because the companies providing the service themselves are usually producers of production equipment (ASIC). This significantly reduces the cost and cost of mining, and the consolidation of data ASIKov in large data centers minimizes the cost of maintenance.
Thus, this model of work is beneficial for all participants, since it allows to significantly increase profitability and get a more significant profit.
That is, in simple terms, a specific company produces or purchases equipment for mining, and then sells its capacity to end customers, while maintaining equipment, electricity costs, setting up, and connecting to the Internet entirely fall on the company’s shoulders.
Cloud service deprives customers of most of the problems and difficulties accompanying the production process:
- interruptions in the operation of the Internet and electricity network (there is no equipment downtime),
- setting up and maintaining the equipment in a working condition (the paid capacity is constant),
- high noise and heat generation (there is no need to cool the room)
- legal issues in the field of legislation and taxation (became relevant at the end of 2017).
Some companies charge a small commission for their work, which consists of electricity fees and equipment maintenance. But in any case, it is much more profitable for the end-user than to keep the equipment at home or rent a separate room for it. Since the farms and the data centers of these companies are usually built in places with cheap electricity and heat generation. Most often, such companies are occupied by cloud mining of bitcoins and light coins, using the so-called ASIC equipment developed for the extraction of cryptocurrency for the production of cryptocurrency.
In connection with the disappearance of video cards and ASICs from the market, cloud mining services are gaining huge popularity, and many contracts are redeemed just a few days after the appearance (commissioning of new capacity). The most reliable ones are HashFlare and Genesis Mining. They are guaranteed not to burst like bubbles of HYIP projects that work for several months, gain the right amount of money, and curtail, and users lose their investments. Specifically, our editorial staff uses the HashFlare service (approximately 80-85% of the total capacity), for more than a year of working with the service, we did not have any problems or delays in payments.
If you decided to do investing in mining now, when it’s complicated to get video cards and ASIC, and if you do, then at the huge prices, the easiest mining is the easiest and most effective way to profit from investing in cryptocurrency production. Agree, buying your equipment two or three times more expensive is silly.
Advantages and disadvantages of cloud mining
The main advantages of cloud mining:
- The user gets rid of all the disadvantages of mining: monitoring of cloud mining, setting up equipment, paying bills for electricity.
- Quite high profitability – services allow you to receive an investment of 200% to 400% of revenue for the year, which, coupled with a constant increase in the rate of cryptocurrency makes this very interesting.
- Companies have a legally registered status, are in geolocations with clear legal norms (mainly Europe), and are quite reliable.
- The total capacity of the hotel data center will always be higher, therefore, when collecting your farm and leasing the size “on the side,” the compensation indicators will differ – each mining of the cryptocurrency on the machine has its balance of costs and profits. At the same time, the difference will be in favor of contracts for cloud mining – even taking into account the profit laid by the service, the profitability for the user will be higher.
- Profit can be predicted: investing in contracts for cloud mining has nothing to do with the purchase of shares on the stock exchange – where the price may fall due to reduced demand, and the production of cryptocurrency is protected from such force majeure, due to the average complexity of the network and the exchange rate. Using this service, in any case, brings you money, and a fixed amount of compensation and well-known indicators of the complexity of calculations allow you to quickly predict the profitability and use the cloud mining Bitcoin (SHA-256) or another coin.
- On the same service, you can simultaneously purchase contracts for different crypto-currencies, which will help to protect yourself against occasional falls of one of them. A competent distribution of investments between them, may, and will reduce the total expected profit, but also minimizes the damage – in this respect from security, the best strategy for mining will be diversification in two or three of the most effective algorithms.
- The ability to carry out auto mining of bitcoins on a large number of resources simultaneously, searching for the most profitable contracts without any restrictions. But be careful with new services, the bulk of the investment should be on proven platforms (HashFlare and Genesis Mining).
- Referral programs – for the invitation of the user, you can rely on a fixed amount or a small additional percentage of the profits on his contracts. So, the creators stimulate the demand for their services, so that cloud-based crypto-currency mining becomes more popular and accessible. This is not a significant income, but still a small bonus.
- Quick and easy scaling! This is a critical aspect that is not fundamental at the first stage but is critical in further development. Unlike the classical production of cryptocurrency, in cloud mining, we are always able to scale our capacities in just a few minutes and at no additional cost (who was engaged in production on his equipment is familiar with the problems of scaling).
The main disadvantages of cloud mining:
- There is a possibility of a drop in the rate of Bitcoin itself. To mitigate this defect, we recommend not to withdraw the received cryptocurrency immediately in Fiat and wait for the most favorable rate. You can also take coins to the exchange and place inflated orders for sale, so the assets will be sold only after reaching a specific mark with the growth rate.
- The likelihood that the seller of contracts will be unconscionable. The significant demand for cloud mining has activated some scams offering non-existent production facilities and exploiting interest in BTC – cloud mining has become for them just a godsend. It is worth using only proven services with numerous recommendations and not “peck” on promises of sky-high interest, laying out in the first bitcoin cloud. In its majority, figures above 300% of profitability (per year) cannot exist in theory – the best and reliable cloud-mining websites cannot give such data.
- The site of the company with an online wallet is subject to hacking attacks and hacking – from this, the services of cloud mining are not entirely protected. If such an event happens exactly with the site, you have chosen – the money that is not deduced will leak irrevocably in an unknown direction. In this regard, it is worthwhile to beware of services with too long a period of return of funds or conditions that prevent the immediate transfer of profits to your account.
- A sharp increase in the complexity of extraction of the selected cryptocurrency, which in turn will result in fewer coins for leased power (hashed). However, for assets with a large net capacity, such as Bitcoin (BTC), Litecoin (LTC), and Ethereum (ETH), this is not a significant risk, since it is physically impossible to produce and run a considerable amount of equipment that will significantly change the complexity of the network.
Selecting a cloud-based service
If you choose four main parameters:
- publicity – photos, blogs, video with equipment and employees;
- time – the mining market is quite young, and the company’s existence time here means much more than in more established niches;
- capacity – the total volume of the size that the company has and, as a consequence, the number of service users;
- multicurrency – the ability to obtain various crypto-currencies within the same service, is necessary because the rates can change dramatically. But in most cases, it is more reliable to invest in the production of bitcoins (algorithm SHA-256), so this criterion is not fundamental.
We have prepared for you detailed reviews on the two most reliable and time-tested services for cloud mining. In addition to profitable tariffs, they have the most scarce quality of cloud services – publicity (confirmation of actual availability of equipment) and stability of payments, tested not by one year of stable operation.
TOP-9 of the most reliable and large sites
In the list below you will find the most proven services that provide services for cloud mining bitcoin and altcoins in the form of contracts. The contract offers a cloud of the capacity that you choose, and the proceeds from mining by this cloud will be your daily profit in the form of the cryptocurrency that your algorithm produces.
We advise you to register only on the first four sites because their reliability and credibility are much higher than all the others on the market.
- Genesis Mining is a well-known service offering cloud-based Bitcoin mining and other advanced crypto-currencies (currently five coins). High confidence in him is due to irreproachable feedback from the miners themselves and daily payments, as well as numerous photo and video confirmations of their vast data centers. Especially indicative are the regular fees: you can not steal, or else somehow take away the enigmatic bitcoins from you. Guests of the resource “Mining Crypto-loans” have an exclusive discount – when ordering capacities enter the promotional code YeyRLA
- ShansiS – the company ShansiS Systems for four years is engaged in leasing facilities for the mining of crypto-currency. The location of data centers with equipment in Shanxi Province is selected because of extremely cheap electricity. With this service, the company can offer excellent conditions for customers.
- IQ Mining – was founded in late 2016 by a team of experts in the development of the blockade and IT area. The uniqueness of the service lies in the fact that the algorithm monitors the performance of the mining and automatically disables the low-profit chemicals.
- Hashing24 – less preferable than all facilities listed above. Aggregates the power of third-party data centers, but it also works stably. Regularly gets to the lists where the best sites for crypto-currency mining are located. But due to its dependence on its contractors, we do not recommend this service as the primary investment.
- BitMiner – owners of several data centers with ASIC devices. Like most severe services of clouded minings, they sell not only the catch of the cue ball but also other crypto-currencies – the site lists a whole list of algorithms that they extract. Purchased capacity can be sold at any time on the exchange. Less advantageous than the first four, this is not so popular.
- OXBtc – good contracts for their money, but a terrible interface and support. Sell cloud-based mining bitcoins and ether, as well as just sell devices ASIK (ASIC), which you can turn on yourself. There are two types of deposits – current and fixed, maneuvering between which, you can quickly repel the invested funds. Sometimes coupons are given with discounts on capacity and other bonuses.
- EOBot – the occupation by Bitcoin mining on this site is not the only solution; you can successfully drop a lot of other cryptocurrencies. The service provides its own software installed on your PC. There is a crane, each day distributing a considerable amount of satoshi and another cryptocurrency. But in general, the service did not gain much confidence, since there is no real evidence of the existence of its own mining capacities.
- Cryptomonitor – works since the end of 2016, the contract will be completed only after reaching 200% of invested funds, which is similar to other services offering cloud mining. Themselves did not work with this site. Therefore we can not recommend it.
At the moment, Cloud mining is the only working way to get a cryptocurrency and minimize its risks with such an investment. This is a modern solution for users who are confident in the stability of the chosen payment facility and are not going to do the assembly of the farm and the maintenance of a noisy installation.
In fact, cloud mining services are analogous to investing in stocks, but with much higher returns and favorable forecasts regarding their prices. Given the general trends in the bitcoin market, your contract is very likely to be very profitable, according to statistics over the past year, the return on investments was 300-800% (depending on the deal and the algorithm).