What Are the Benefits of Cloud Mining Bitcoins?
Generally, when the discussion turns to mining bitcoins, talk revolves around building the right mining rig for processing capabilities and power savings, of the right software, or of joining mining pools to get a share of the blocks discovered. However, there are other options out there, including cloud mining bitcoins. What is this method, and what benefits might it offer?
What Is Cloud Mining?
Bitcoin mining facts prove that Crypto mining is very expensive, and even if you join a pool, your return is likely not enough to even pay your electric bill. That’s because a decent rig can cost thousands of dollars, and your share of the pool might come down to less than $30 per month. Cloud mining is an option that allows you to cut out the cost of buying and maintaining your own hardware and software.
Cloud mining relies on a couple of things. First, you need to have a high-speed Internet connection. Second, you need to purchase a cloud mining package that uses a data center with shared processing power. All of the hardware needed for mining is purchased, housed and maintained by the data center owner. All you need to do is register with the company, and purchase a contractor or a share.
So, what are the advantages to cloud mining, rather than doing it yourself?
The Benefits of Cloud Mining Bitcoins
You’ll find a host of different benefits associated with outsourcing your hardware and maintenance costs. Some of them include the following:
- Lower Upfront Cost: The data center owner will foot the bill for all of the hardware, the software, and the maintenance, as mentioned. However, because cloud mining is a service, you will have some costs, but these will vary from cloud mining platform to cloud mining platform.
- Reduced Energy Consumption: Bitcoin mining rigs can consume an immense amount of electricity. By outsourcing the hardware portion of the equation, you cut your own power consumption significantly.
- No Hardware: In addition to not having to purchase or maintain your own hardware, you’ll find that cloud mining bitcoins allows you to keep a cooler, more comfortable home with less noise.
With all that being said, you do need to make a few choices when it comes to cloud mining bitcoins. For instance, do you want hosted mining? Do you want virtual hosted mining? Do you want to lease hashing power? Each is different, and comes with a different cost. Hosted mining lets you lease a machine hosted in a data center.
Virtual hosted mining lets you install your own software on a leased machine. Leased hashing power allows you to lease just the hash power of a machine, without having a dedicated server.
The Drawbacks of Cloud Mining Bitcoins
It’s important to go into cloud mining bitcoins with the understanding that there are some drawbacks. For instance, if you enjoy building systems, outsourcing this to a datacenter might limit your enjoyment. There is also the potential for signing a long-term contract and being locked in. Of course, you will see lower profits – the data center operator must recoup their costs and that means you get a smaller piece of the pie. You also have limited control and flexibility. Finally, there is the risk of fraud here.
In the end, cloud mining bitcoins can be an excellent option for some, but it is not an ideal choice for everyone. Consider your options very carefully, get quotes from multiple cloud mining companies, and do your due diligence to ensure that the companies you’re considering are on the up and up.