Cons Here’s why you might not want to consider cloud mining: Risk of fraud Less fun if you’re a geek who likes system building! Lower profits — the operators have to cover their costs after all Contractual warnings that mining operations may cease depending on the price of bitcoin Lack of control and flexibility.
Types of cloud mining In general, there are three forms of remote mining available at the moment: Hosted mining Lease a mining machine that is hosted by the provider. Virtual hosted mining Create a general purpose virtual private server and install your own mining software.
Leased hashing power Lease an amount of hashing power, without having a dedicated physical or virtual computer. This is, by far, the most popular method of cloud mining. How to determine profitability We have previously covered ways to calculate mining profitability.
However, the web services offered are designed to work with your hardware parameters, not cloud-mining parameters. Even so, you can still use these calculators by thinking clearly about the costs involved. Effectively, you are being asked for your ongoing costs and your one-off investments.
Therefore, since the provider, not you, is paying the electricity bills, you can enter the monthly mining bill in place of the electricity cost. The conversion process isn’t completely straightforward, though. In the case of hardware miners, you can work out the monthly running cost by multiplying your electricity charge ie: But, for cloud mining calculations, you need to do the opposite, because the provider gives you an effective monthly running cost.
Hence, you need to calculate an equivalent cost per kilowatt hour to feed into the mining calculator.
Bitcoin Cloud Mining Overview
Hosted Mining — You send your mining machine to a Firm, which provides electricity, cooling and configurations. It is also possible, that you lease yourself a mining machine. The pros of the one are the cons of the other and vice verse. Starting with the pros of hosted mining: Less Scammy — if you decide to get an hosted bitcoin mining contract, than you need to check if the provider is a registered venture.