Top 5 Cloud Mining Facts
With cloud mining a remote datacenter with shared processing power is utilized in the process of bitcoin mining. Cloud mining can be useful for those who aren’t technically minded, those who don’t want to run their own software, and in locations where the cost of electricity is high. Initial set up cost of a bitcoin mining rig can leave a nice hole in your wallet. MinerGate can be recognized as a reliable cloud mining and pool provider, where the only fee is maintenance to make up for electricity and mining resources cost.
Ease of Use
A Problem with the traditional bitcoin mining set up is that a miner may encounter problems such as high costs, broken machinery or slow hardware. Cloud mining can solve these problems as many cloud mining companies allow you to make a deposit into your account, select a mining plan, and as if by magic, you’ll start earning your bitcoin. Cloud mining can therefore cater for complete beginners who don’t have a technical understanding of the bitcoin mining process. There are also less equipment-related risks.
Beware of Ponzi Schemes
A Ponzi scheme can be described as a fraudulent investment operation where the operator generates returns for older investors through revenue paid by new investors. Most of cloud mining websites may not take part in any mining whatsoever, and generate income by involving you in referral or signature campaigns. A few simple ways to protect yourselves from a Ponzi scheme is to beware if there is no public mining address, and if it has zero endorsement from any ASIC vendor.
Successful or Not?
All investment opportunities come with risks. Especially with the price of bitcoin being so volatile, but the general direction of bitcoin’s price is up. It is possible to enjoy a successful investment from cloud mining. You hear success stories all the time. Is it possible to believe these success stories? Could they be just another Ponzi scheme? There are some good, reliable companies out there. Most require a commitment for year or 2-year periods. Who’s to know what could happen to that company by then. Some experts suggest you may be better off buying bitcoin and keep them for a while. Or go through the struggle of becoming a miner and start bitcoin mining. Again, this is where cloud mining comes into play. The ease of use for ‘miners’.
You have 2 options here, you can either lease or buy some digital mining equipment. You would then find a hosting provider to give your digital mine a place to exist. With hosted mining, you would be responsible to pay to lease or buy the mining equipment and pay for the services the provider provides. This way of hosted mining is also harder to monitor. A less expensive option for hosted mining would be if you purchased a virtual hosted mining option. This reduces costs as you are the one who is creating the server (You would be the hosting provider in this case). You’d also be installing your own mining software. Hosted mining lowers your electricity expenses as well as making a less heated and noisy environment. You are also reduced with any maintenance uses that require you to attend to.
Buying Hashing Power
Arguably the most common process in bitcoin cloud mining. It’s the process of owning your own virtual or physical computer. People may buy hashing power to increase the hashing power of their pool to increase their luck. Or to mine on different pools with different luck factors and reward schemes. It is believed that buying hashing power to obtain bitcoins is cheaper than buying the coins. When a miner buys hashing power they can also test the mining performance and compatibility of their pool.
Cloud mining is arguable a risky investment to get into. You have the risks of scams and Ponzi schemes, then comes the risk of relying on a business that are not well established for many years, and finally the price of bitcoin. No equipment to sell at the end to try and make back as much money as possible. Then you have the positives, a miner interested in bitcoin but does not have the initial startup funds available can use cloud mining as an alternative. Indications show the price of bitcoin can only go up, so any investment in bitcoin could be a smart one. From what is said, if you want to get into bitcoin, cloud mining is one of the easiest ways. If a trusted provider is used such as MinerGate, a mining pool with 3 years of a good history, cloud mining is a proven higher return of investment.