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Cloud mining specifics, advantages and disadvantages

23/08/2017 00:00
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Constantly growing rivalry in the sphere of cryptocurrency mining and algorithms becoming more complex by avoiding axes to rival with large scale mining farms have caused the notion of “cloud mining” to appear. So what is the essence of this process and is it really worth that miners pay attention to it? What should we know about the advantages and disadvantages of cloud mining before using this service?

Cloud mining notion, specifics and development

If to say in simple words the cloud mining is the process of BTC and other digital currencies mining via remote common data processing center. Such mining way allows cryptocurrency getting without the necessity of direct participation at the organization of equipment operation.

The evolution of digital currency mining has overcome several stages starting from solo mining till the formation of collective pools, farms and equipment rental. Generally since year 2013 solo mining without specific equipment became non-profitable. This resulted at the appearance of first collective pools – organization of society participants and then the appearance of stands – real giants on digital coins mining.

Appearance of cloud mining has occurred at the time when cryptocurrency mining including Bitcoin became extremely complex. Cloud mining has no difference from common mining. It is more like a service provided by the company doing digital currency mining.

In most cases the company providing cloud mining services offer services packages on cryptocurrency mining. Depending on the price of the latter miners rent specific equipment physically located at this company office. At the same time miner bears the expenses for electricity and rented equipment maintenance despite the fact that maintenance will be done by the organization itself. Making such expenses estimate is done taking into account the profit obtained during the course of mining. Just to set an example. In case if you have managed to mine 3ETHthe total profit will be 519USD meaning that the price of 1ETH makes 173USD. Be sure to abstract around 50USD as electricity costs and get net profit in the amount of 469USD. Then remember to abstract fixed commission fee you select before launching currency mining with the help of cloud mining.

«Cloud mining» can be done at various types of equipment:

  • With the help of remote rented equipment: it is possible to use “axes” in specific data center. You provider should provide you with the list of data centers having various calculation capacities and your profit will depend on the power of data center you have selected
  • With the help of virtual server: user can purchase desired calculation capacity with the help of public sales. It is rather hard to forecast final net profit as your bet can “play” today while tomorrow the luck will be in the hands of another user;
  • With the help of rented calculation capacities: you can stat cryptocurrency mining right away after purchase.

Advantages and disadvantages of cloud mining

Cloud mining has the following significant advantages:

  • Minimum mining expenses related to energy consumption;
  • Quiet surrounding without constantly working PC
  • Absence of equipment constant update necessity in order to follow its topicality and mining requirements;
  • No issues with PC maintenance such as cooling, repair etc.

Cloud mining has the following disadvantages:

  • Risk of running into fraudulent companies;
  • Lower monthly income;
  • More prolonged pay-back term;
  • Possibility of mining stop in case of exchange rate sharp changes.

Recommendations on mining company selection

If you run into the task of selection of mining company, providing cloud mining services it is recommended to make thorough assessment of all possible organization taking into account various factors starting from licenses and customers review at various specialized internet portals.

Though the most important criteria is the company official web site. Honest organizations have nothing to hide so they will describe all procedure of cloud mining services provision and other related aspects.

While it is worth paying attention to the reviews of currently acting customers of the mining company. The better feedbacks are the more warranties you have that you are making investments into reliable company. Taking into account high rivalry in this domain remember that such feed-backs can be paid, so it is not recommended to form opinion about the company basing at such feed-backs.

You can minimize the risks of “collaboration” thieves using the services of several cloud companies at the same time.

Making some sum up we can mention that cloud mining is a reliable way of digital currency getting for the users who don’t have experience at cyptocurrency domain, specialized equipment or time for coins mining at pools or independently. But even such approach supposes constant control of current exchange rate of Bitcoin and knowledge of all the details of such way for profit getting.

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