What is cloud mining?

In the crypto mining industry, there is a service called cloud mining. In this article, we’ll examine what cloud mining is, what the best options are, and what different forms of it look like.

Cloud mining is a specific type of crypto mining. Unlike other forms of crypto mining, cloud mining doesn’t require you to buy or own mining hardware. In order to cloud-mine, you have to purchase contracts with a cloud mining provider. Those contracts equate to a certain amount of hash power. The cloud operator will then allocate that amount of hash power to the client for the client to use. In many cases, the client also needs to pay maintenance fees, including electricity fees, for the operation of the cloud contract.

Depending on the cloud mining provider, the client may be able to choose how the hash power they bought is used. For example, the client may have the ability to select the mining pool or coin. However, some contracts are limited and automatically will mine a certain cryptocurrency.

The pros and cons of cloud mining

While regular mining requires setup time, cloud mining lets you almost instantly ‘mine’ after purchasing the contract. There is also no manual overhead required with cloud mining and it does not take up any space, as there is no equipment. 

On the other hand, you do not physically own any of the hardware. This means that you are wholly reliant on the cloud provider. There is also no way to sell any of the equipment and many cloud contracts have an expiration date. Once that contract reaches the expiration date, you no longer have the hash power. It is also important to watch out for the maintenance fees in relation to the price you would pay for electricity if mining yourself.

Is cloud mining profitable?

Common questions about cloud mining that people have include: 

  • Is cloud mining profitable?  
  • What is the most profitable cloud mining company? 

These are not easy questions to answer because they depend on several factors. 

First, the answer depends on the price of the hash rate and the maintenance cost associated with the contract. The duration of the contract is also important, especially if there is an option for a lifetime contract. However, do take into consideration the small print! In order to make a profit, the mined cryptocurrency will have to be sold for fiat currency. So, the exchange rate of the specific mined cryptocurrency and the expected future value is important.

Conclusion

To summarize, you have important factors to take into account when looking at getting into cloud mining. 

First of all, it would be paramount to decide whether or not cloud mining is something for you. Do you want to own the equipment? How much work do you want to put in yourself? Those are some of the questions you should ask yourself. 

The most profitable cloud mining company will require a decent amount of research to find. It is important to take into account the maintenance fees, electricity fees, and overall cost per hash rate. It would also be a good idea to look into how much freedom the contract gives to use the hash power for yourself instead of a contract that only mines one coin.

Are you interested in owning equity in a crypto mining company? At Elite Mining Inc, a green energy mining operation, we’re raising funds through an Equity Token Offering (STO). Find out more here.