Mining Bitcoin is a process in which new bitcoins are calculated by very complex computers. After performing these calculations, new bitcoins enter the circulation and are under the supervision of the blockchain ledger. Bitcoin mining has attracted a lot of fans due to its many profits. Despite these fans, one of the most popular ways to mine Bitcoin or other digital currencies is cloud mining.
What Is Cloud Mining?
Using cloud services is not limited to saving files, rather, it is possible to mine bitcoins and other digital currencies. In this service, a person can mine bitcoins without using his system and without the need to process any mining device. By renting cloud computing power and opening an account and renting these devices, people can participate in bitcoin mining. Bitcoin cloud miners can start the mining process by joining the mining pool. As a result, these companies lease different hashing power to their users. Hashing power is used to solve Bitcoin mining algorithms. In the end, each user receives bitcoins according to the amount of hashing power leased.
Types of Cloud Mining
There are two types of cloud mining:
- Hosted Mining
- Leased Hash Power
Hosted Mining is the most popular form of cloud mining. This type of customer leases mining hardware located in a miner’s facility or can even buy them in full. The mining company is responsible for maintaining and monitoring the operation of these devices. In addition, the customer is charged for the maintenance of the miner’s facility and its services. But the good thing about this method is that the customer has direct control over the extracted values.
The second type of mining, Leased Hash Power, leases mining farm, hash power, or computing power to its customers for a certain period of time. The customer gets his share of the farm’s overall profits from Mining Digital Currencies. Of course, it should be noted that cloud mining companies that provide these services mostly use the Leased Hash Power method for other digital currencies (except Bitcoin).
Benefits of Bitcoin Cloud Mining
This method is very useful for people who have little knowledge of bitcoin mining or little capital. Also, the costs of mining and not using electricity and multiple devices and not using expensive cooling equipment as well as easier setup are among the benefits of using cloud mining services.
Disadvantages of Bitcoin Cloud Mining
One of the largest shares of scams in the world of digital currencies is related to cloud mining companies, which after receiving a lot of money from users, did not provide them with a service and cheated. But we have mentioned these companies in an article on this site. I recommend you read this article. Also, this type of investment requires a lot of patience so that you can receive your profit in the coming months. It’s not like investing $200 today and turning your $200 into $400 the next day. Before investing in such sites, be sure to do your research and go to industry news sites to make sure the performance of these projects.