Ethereum Cloud Mining: How To Guide & Best Service Providers/Websites

Ethereum Mining
Source: Shutterstock

Ethereum Cloud Mining: How To Guide & Best Service Providers/Websites

It was not long ago from when the world of blockchain was dominated by Bitcoin. But as more and more people started getting associated with blockchain, Bitcoin’s shortcoming started to emerge.

This gave birth to Ethereum. Ethereum was discovered and developed by Vitalik Buterin to not just match the prowess of Bitcoin, but to better it by expanding its capabilities. Ethereum’s blockchain also gave the world the concept of ‘smart contracts’ as it supported scripting and the creation of decentralized apps through its Ethereum Virtual Machine or commonly known as EVM. Ethereum claim of being better than bitcoin and additional features made many believe that Ethereum was the coin of the future.

Mining the Ethereum

With the belief that Ethereum had the charm to change the world, a lot of miners shifted their focus from Bitcoin to Ethereum. Ethereum’s mining (Proof of Work) was not much different from that of Bitcoin. Any miner that wanted to dig in for getting Ethereum, they had to use computers with superior graphics chips to provide solutions to difficult mathematical puzzles until the block is confirmed and the miner receives his reward in Ethereum.

An Ethereum miner takes nearly 12-15 seconds to mine a block and get his rewards. If the mining rate falls and the miner takes more or less time to solve, the algorithm automatically adjusts its difficulty levels so that miners can bounce back to the 12-15 second solution time.

While things look easy and Ethereum mining a cakewalk, one has to remember the Ethereum may not need mining services forever. Ethereum is soon and slowly moving to Proof of Stake ditching the Proof of Work algorithm to determine the validity of transactions. This would mean that the network would be then secured by token owners and not the miners. Hence purchasing the ASIC or high-end computers might not be a very smart option.

Types of Decentralized Protocol Ethereum Mining

While miners can buy their equipment and run them on their own, crypto mining is still a very difficult and complex procedure.

Apart from high-end equipment, there are a lot of factors that need to be considered and taken care of to make mining profitable. Hence many a time a lot of miners adhere to decentralized protocols which can maximize their profitability. According to these protocols and based on the hardware and hosting positions, Ethereum mining could be classified into two categories – Hosted Mining and Cloud Mining.

Hosted Mining

In hosted mining, the provider builds and then leases or sells the mining equipment or hardware to the customer directly. This arrangement could be modeled in a variety of ways but generally, it’s the customer who acquires the equipment from a hosted service or sends its directly to a hosted data center or the mining farm. The customer now has to pay the power cost and storage cost allowing someone to mine blocks with purchased or leased hardware. By using hosted services, the miner is hassle-free and does not have to deal with the maintenance, electricity or storage concerns which he may have to encounter while running the hardware on his own.

There are certain advantages that hosted mining brings to the miner which includes more control as they have anytime and anywhere access to exact specifications relating to their mining equipment and can verify the same by having remote access to their mining hardware. The other advantage adds up to the security part of it as the customer/miner is the owner of the mining device and the hosting service provider does not touch the coins at any stage. The only disadvantage here is the upfront cost that miner incur to buy or lease the equipment and repairs if any are also to be borne by the miner.

Cloud Mining

Unlike hosted mining, cloud mining brings together the customers and their processing powers to a pool where they together mine Ethereum in bulk and at a cheaper rate. With no upfront cost to be borne by the miner for purchasing or leasing the equipment, cloud mining turns out to be relatively cheaper. The cost associated here is that of electricity and fees with respect to mining along with a percentage of the reward earned via mining blocks for the cloud mining services.

As precautions, the miner has to keep a check on the services which they are utilizing gives them a guarantee of the hash rate and other mining capabilities. They also need to associate with reputed names so that their block rewards are secure and are timely distributed by the service provider.

So just to bring in the clear differentiation between the two:

Hosted Services Cloud mining
The upfront cost of buying or leasing the equipment No upfront cost involved. There may be a small onboarding fee (if any)
More Control as the miner can actually check its equipment’s performance Less Control as the miner cannot distinguish his bifurcated performance 
More secure as the hosting service provider does not touch the block rewards Less secure as the miner has to control the block rewards and has to trust the service provider for being fair in reward distribution

Ethereum Cloud Mining

With the kind of challenges that an Ethereum miner is facing in terms of price and anticipated move to proof of stake algorithm, investing in Ethereum mining equipment and even going for hosted services is not turning out to be that profitable for miners. Hence a lot of them are shifting to the Cloud mining options as it is relatively cheaper with no upfront commitments.

There are now several remoted farms that have started providing Ethereum cloud mining services. These different service providers charge variable fees based on the capacity and hash power that is being utilized. The cloud mining services also make it hassle-free for the miners as they do not have to take care of the hardware which is maintained by highly skilled professionals who are responsible for the operations of these plants. Also, electricity cost is far lower for these cloud mining service providers as they are usually situated in far of locations. The equivalent electricity cost for a miner running the device out of his home may be significantly higher and full of hassles.

Reasons Miners prefer Ethereum Cloud Mining

While most of the reasons overlap with the advantage of cloud mining, Ethereum miners find cloud mining interesting because –

  • It provides a source of passive profit during the day.
  • The user data and token rewards are preserved on the cloud and there is very little chance of losing them due to hardware issues.
  • Increase in profitability due to Partner Programs.
  • Pooling hash rate helps in increasing profitability as well as together everyone achieves more.
  • No hassle of managing and maintaining hardware.
  • Easy access to mining from anywhere around the globe.

Read Also: Future of Ethereum: Is It Dead, Or Will It Rise?

Ethereum Cloud Mining Providers

With the popularity rising for Ethereum cloud mining, there are a lot of companies that have started providing these services. Below is the list of most popular Ethereum cloud mining service providers

Name of the Service Provider

Features

Hashflare
  • Minimum Hashrate: 100 KH/s
  • Hardware: GPU Rigs
  • Automatic payout in ETH
  • Maintenance fee: None
  • 1-year contract
Genesis Mining
  • Multiple plans based on user requirement 
  • Minimum Hashrate: 25 MH/s to 350 MH/s based on plans
  • Maintenance Fees of USD 0.004 per MH/s per day.
  • 2 Year Ethereum Mining Contract
HashGains
  • Multiple plans based on user requirement
  • Minimum Hashrate: 25 MH/s to 100 MH/s based on plans
  • Maintenance Fees per GH/s/day $ 3.2435
  • 2 Year Ethereum Mining Contract
Hashshiny
  • Minimum Hashrate: 100 KH/s
  • Maintenance fee: 0.0004 $ / 100 KH/s / day
  • Hardware: GPU Rigs
  • Automatic payout in ETH
  • 2 Year Ethereum Mining Contract
IQ mining
  • Multiple plans based on user requirement
  • Minimum Hashrate: 2 MH/s to 300 MH/s based on plans
  • Maintenance Fees: Nil
  • 2 and 5 Year and also Lifetime Ethereum Mining Contract
  • Payout Everyday
CCG Mining
  • Multiple plans based on user requirement
  • Minimum Hashrate: 1 MH/s to 100 MH/s based on plans
  • Maintenance Fees: Nil
  • 1-year Ethereum Mining Contract

Conclusion

The changes Ethereum is undergoing in terms of its algorithm and the price at which it is hovering, Cloud mining sees to be the best option.

For miners, there is no upfront cost to be incurred to join the hash rates. But yes choosing the right player and right contract is the key as it has a direct impact on the profitability. Hence a bit of research is required.


paycheck protection program
Did This Cryptocurrency Devs. Lie to the US Government for COVID-19 Relief Fund?
Out of 660,000 application of the Paycheck Protection Program (PPP) from the CARES fund (Coronavirus Aid, Relief, and Economic Security (CARES)
Read more.
DeepTradeBot Club has been just opened!
The long awaited deepTradeBot VIP Club has been finally opened, and the platform is actively recruiting strong marketing leaders. The
Read more.
digital dollar stablecoin
Why Stablecoins Are Not True Cryptocurrencies: Analyst
The realm of cryptocurrency is expanding with DeFi, but stablecoins (and digital FIAT) are starting to threaten the principles and
Read more.
Hong Kong Crypto China
With US Sanctions Likely, A Crypto Settlement Crisis Looms in Hong Kong
The Maintenance of the National Security Law was on June 30, 2020, swiftly passed during the meeting of the 13th
Read more.
Ethereum 2.0
Ethereum 2.0 Off Track? Phase 0 Most Likely To Release In 2021
Eth2 behind schedule as Ethereum 2.0 researcher expects Phase 0 to release in January 2021. However, Vitalik Buterin urges the
Read more.
Huobi Launching Bitcoin Options, VP Bodes Positive News for Huobi Token [HT]
The VP of Huobi crypto exchange announces the launch of the options market.  Options trading, as the name suggests provides
Read more.
Ethereum ETH DeFi
Ethereum DApps Record 334% Increase In Transaction Volume Since Q2 Of 2019
Prominent cryptocurrency network, Ethereum has a significant network update underway. While the update is still in works, the network has
Read more.
Bitcoin
Bitcoin Technical Analysis: XBT/USD Fake Breakout Sabotages Rally To $10,000
Bitcoin/US dollar perpetual inverse swap contract falls back to $9,200 support after hitting a wall under $9,500. XBT/USD is clinging
Read more.
bitcoin options 1 year futures expiry
Bitcoin Price Analysis: Why BTC/USD Breakdown To $8,000 Is Around The Corner?
Bitcoin price rejected from levels under $9,500 to seek balance above $9,200. BTC/USD is staring into a bottomless pit especially
Read more.

Summary
Ethereum Cloud Mining: How To Guide & Best Service Providers/Websites
Article Name
Ethereum Cloud Mining: How To Guide & Best Service Providers/Websites
Description
Get to know everything about Ethereum Cloud Mining in this in-depth article. Including the best Ethereum cloud mining service providers and websites.
Author
Publisher Name
CoinGape
Publisher Logo
Show Comments
Abhinav Agarwal 111 Articles

A blockchain enthusiast, my expertise extends to marketing and advertising through which I was able to help a few notable startups in generating initial traction. Follow me on Twitter at @abhinavagrwl94 and reach out to me at abhinav[at]coingape.com

Follow Abhinav @