Cryptocurrency Cloud Mining: Basic Principles & Advantages

By Achal Arya
Published February 27, 2020 Updated June 16, 2020
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Cryptocurrency Cloud Mining: Basic Principles & Advantages

By Achal Arya
Published February 27, 2020 Updated June 16, 2020

Since requirements to crypto mining capacities keep growing every day, people are searching for alternative solutions and approaches to this business. This is actually how the concept of cloud mining has been invented. If you do not know how it all works, we have prepared some basic info to share with you.

A cloud mining system is a set of ASIC farms that are integrated into a common network being strictly controlled by a host computer. The best thing about cloud mining services is that they allow customers to lease capacities for the extraction of cryptocurrencies in remote data centers. For example, with https://xive.io/ cloud bitcoin mining, you can find multiple deals and contracts from the crypto industry and start mining by yourself.

The operation logic is quite simple – a user signs up on the site, selects the currency to be mined, picks the number of capacities, and pays the bill. Mining usually starts within 2-3 hours after payment is processed but there could also be some exceptions. Some cloud mining services charge an additional fee for electricity used (MEF). But even in this case, cloud mining could be more profitable compared to the traditional approach since data centers are usually located in regions with low electricity costs.

How Do You Benefit with Cloud Mining?

This solution offers a couple of prominent advantages to users:

  • No need to invest large amounts in the purchase of specialized hardware;
  • No need to install, configure and maintain the network, additionally cover electricity bills, and ensure room ventilation;
  • No need to waste lots of time on the hardware delivery, setup, and configuration;
  • No need for technical knowledge and special skills since you are not supposed to build a actual mining farm;
  • Get convenient tools at hand for forecasting profits and assessing stats;
  • Count on daily profits, which allows you to keep the profitability of the equipment under control;
  • The possibility to sell capacity contracts on domestic exchanges, so you can return the funds you have invested at any time;
  • Equipment in data centers are open 24 hours a day without any breaks, thereby ensuring stable profitability.

To make sure what you are investing in, we strongly advise you to check the contract terms before ordering cloud mining services.

Cloud Mining Investment Profitability

The profitability of investments in cloud mining depends on the current complexity, currency exchange rate, and terms of the contract. You can calculate the profitability of investments using a special mining calculator. But, since the complexity and exchange rate vary greatly, there may be some inaccuracies. 

There are many companies offering equipment whose computing capacity and hash rate you could rent for cryptocurrency mining. But not every service can be trusted. Therefore, it is highly recommended to run research by yourself.

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Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Achal Arya
519 Articles
I am an entrepreneur and a writer with a bachelors degree in Computer Science. I manage the blockchain technology and crypto coverages at Coingape. follow me on Twitter at @arya_achal or reach out to me at achal[at]coingape.com.

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