Cloud Mining

Cloud mining uses cloud technology to mine cryptocurrency. Miners use third-party companies in the cloud mining industry to get passive income without having to run a mining lab with lots of hardware devices. However, customers need to be careful because there are a lot of scam companies that claim they offer cloud mining to obtain digital information from miners about their wallets and steal their data.

Learn more than just the definition of cloud mining.

Models of Cloud Mining

There are two popular models for cloud mining:

• Hosted mining: It is the most popular model of cloud mining. In this model, the customer pays for the hardware in the cloud company for purchase or lease. With this model, miners have direct control of cryptocurrency mined from the hardware in the cloud mining facility. However, this control costs more than the other cloud mining models.
• Leased hash power: It is an alternative model for host mining. In this method, customers lease the mining farm. Then miners share the overall profits of a particular cryptocurrency that came from the farm. Moreover, most of the time, this model is used for altcoins.

Advantages of Cloud Mining

• It requires less money compared to purchasing the hardware for the mining.
• Mining requires a lot of energy which comes from electricity. In cloud mining, customers don’t pay the electricity bill.
• The storage and the heat from the mining farm are not an issue with the cloud system.

Disadvantages of Cloud Mining

• Since cloud farms function as a center for mining, cloud farming conflicts with the decentralized nature of the cryptocurrency.
• Security is an issue due to a lot of fake cloud mining websites. The customers need to research and decide that the cloud mining company carefully detailly if they are going to use this method of mining.
• Usually, the altcoins are farmed as the main cryptocurrency in the cloud mining farms. However, altcoins have generally unstable value in a volatile market. Therefore, the cost of leasing or purchasing a cloud mining device or farm may exceed the earnings of the method.