Cloud Mining is a process of crypto currency mining conducted without the direct use of mining equipment or hardware. The service typically offers up the shared processing power of a remote datacenter, that has already been prepared and setup with complex mining equipment. Caution is advised beforehand due to varying usage fees among different providers. Likewise, hashing power is generally procured over a long term period, and certain companies/websites prefer to avoid dealing with a broader client base.
Bitcoin Cloud Mining is a way to mine Bitcoin without owning mining hardware. Still, you need to decide which kind of cloud mining fits your needs best – Hosted or Bought – for which you should calculate how much you are willing to invest and how fast you want the Return on Investment (RoI) to be, be careful the higher the RoI the bigger the risk of getting scammed!
Table of contents:
What is Cloud Mining?
Cloud mining or cloud hashing enables users to purchase mining capacity that of hardware in data centres.
Bitcoin cloud mining enables people to earn Bitcoins without bitcoin mining hardware, bitcoin mining software, electricity, bandwidth or other offline issues.
Bitcoin cloud mining, sometimes called cloud hashing, enables users to buy the output of Bitcoin mining power from Bitcoin mining hardware placed in remote data centres.
Then all Bitcoin mining is done remotely in the cloud. This enables the owners to not deal with any of the hassles usually encountered when mining bitcoins such as electricity, hosting issues, heat, installation or upkeep trouble.
If you want to invest in bitcoin mining without the hassle of managing your own hardware, there is an alternative. You can use the cloud to earn your coins.
Put very simply, cloud mining means using (generally) shared processing power run from remote data centres. One only needs a home computer for communications, optional local bitcoin wallets and so on.
Pros
Here’s why you might want to consider cloud mining:
- A quiet, cooler home – no constantly humming fans
- No added electricity costs
- No equipment to sell when mining ceases to be profitable
- No ventilation problems with hot equipment
- Reduced chance of being let down by mining equipment suppliers.
Cons
Here’s why you might not want to consider cloud mining:
- Risk of fraud
- Opaque mining operations
- 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.
Risk vs Reward
When engaging in any type of cryptocurrency mining there are risks, but profitability is possible if you make the right choices. In this article, we’ve given you some pointers on how to decide which way to go.
In your test calculations, you will likely see that somecloud mining services will be profitable for a few months, but, as the difficulty level of bitcoin increases, you would probably start to make a loss in four to six months and beyond.
A possible remedy to this situation is to reinvest what you have made into maintaining a competitive hashing rate, but this is highly speculative.
As mentioned above, the risk of fraud and mismanagement is all too common in the cloud mining space. Investors should only invest in cloud mining if they are comfortable with these risks – as the saying goes, never invest more than you are willing to lose.
Investigate social media channels, speak with former customers and ask pointed questions of operators prior to investing. Ultimately, you should practice the same kind of due diligence that you would for any investment.
Cloud Mining Contracts
So, you have decided to start using cloud mining services and earn your first cryptocurrency budget. This is the moment where you need us to deal with the decision. All those cloud mining bitcoin services work with different attitude and approach, but the principle, in general, is quite the same. Any company has its own mining factories where powerful computers and servers are held. Each company offers its own amount of contracts with different price, advantages, schedule, and type of cryptocurrency.
Not all cloud mining services work with all cryptocurrency types existing nowadays. Of course, Bitcoin is a must. But before purchasing your first contract, you should be clear about the cryptocurrency you want to mine. Most of those contracts are scheduled for one year. Some of them have additional maintenance fees. Also, you need to note the payout schedule offered by the company. Usually, payouts are offered every day with no delays.
Besides, some mining services also offer their own cloud mining calculator applications. So you can easily predict what cryptocurrency contract you should choose and how big your profit is going to be. In the end, every service has its own benefits. Some offer better terms and conditions, others have minimal entry prices, and another one can be the only service working with the cryptocurrency you want to mine. So, to avoid any complicated research and build your decision on reliable information and analysis, you need to subscribe to our website for sure.
The Most Typical Cryptocurrencies To Mine in the Cloud
Just for the record, most of us want to mine Bitcoin, but do you know that there are other altcoins that are possible to cloud mine via online mining services? When it comes to cloud crypto mining options, currently these are the most popular cryptocurrencies:
- SHA-256 CLOUD MINING. Yes, that is the tool to get Bitcoin. The min. required Hashrate is 10 GH/s. In the majority of mining online services, you will need to pay 0.0035 $ / 10 GH/s / 24h to maintain your money. The hardware, which is used is the HashCoins SHA-256.
- CLOUD MINING of SCRYPT. Use this cloud mining solution if you are interested in earning Litecoin, a great alternative to Bitcoin. The min. Hashrate here is as little as 1 MH/s. Please note that to maintain the mined coins in the cloud mining pools, you will need to pay the fee: 0.005 $ / 1 MH/s / 24h. When it comes to Hardware, to mine scypt, the HashCoins SCRYPT hardware is used.
- CLOUD MINING of ETHEREUM. Another alternative to Bitcoin is Ethereum, the cryptocurrency, which was launched in 2015 but has been recently growing Today, it’s among the top 3 cryptocurrencies and we have to admit it still has a potential to grow. The min. Hashrate is 100 KH/s. The other adorable aspect about mining Ethereum is that there is no fee to maintain it. The GPU Rigs hardware is used to mine it.
- CLOUD MINING of ZCASH. Zcash is another cryptocurrency, which is well worth mining. The min. Hashrate here is as little as 1 H/s. GPU Rigs hardware mines this cryptocurrency.
- CLOUD MINING of DASH. The fifth popular cryptocurrency, DASH, has a huge potential. The min. Hashrate is 1 MH/s. To mine DASH, the Multi-Factor hardware is needed. Similar to Ethereum and ZCash, no maintenance fee for this cryptocoin is supposed.
Of course, it’s up to you which one to choose. No matter which cloud mining solution you choose, you may count all benefits online mining platforms can offer to its customers, achieving maximum efficiency. Let’s take a closer look at the main ones, which are definitely worth mentioning.
Evolution of the Mining Computer
- CPU mining. In the early days of bitcoin, mining difficulty was low and not a lot of miners were competing for blocks and rewards. This made it worthwhile to use your computer’s own central processing unit (CPU) to mine bitcoin. However, that approach was soon replaced by GPU mining.
- GPU mining. A graphics processing unit (GPU) is a powerful processor whose sole purpose is to assist your computer’s graphics card in rendering 3D graphics. GPUs are not built for executive decisions (like CPUs) but to be very good laborers, hence GPUs are able to execute over 800 times more instructions in the same amount of time as a CPU. Mining is a repetitive process that does not require any intelligent decisions, leading to GPUs replacing CPUs in the mining world.
- FPGA mining. Next came mining with field-programmable gate arrays (FPGAs). These greatly outperformed GPUs and CPUs in the mining process as FPGAs are processors that can be programmed to execute specific instructions, and only those instructions (instead of being repurposed for mining, like GPUs were).
- ASIC mining. Similar to FPGAs, application-specific integrated circuits are chips designed for a specific purpose, in our case mining bitcoin, and nothing else. ASICs for bitcoin were introduced in 2013 and, as of November 2017, they are the best processors available for mining bitcoin and they outperform FPGAs in power consumption.
- Mining pools. To offset the difficulty of mining a block, miners started organizing in pools or cloud mining networks. Whenever a miner in one of these pools solves a block, the reward is shared with everyone in the pool in a ratio representative of how much work you put into the pool (even though you personally never solved the puzzle).
- Cloud mining. Clouds offer prospective miners the ability to purchase mining rigs in a remote data centre location. There are many obvious advantages, the most obvious being: no electricity costs, no excess heat, and nothing to sell when you decide to hang up your virtual pickaxe.
Hardware vs Cloud Mining
The principal difference between traditional and cloud mining lies in whom the mining facilities belong to. Hardware mining presupposes buying all the components for a mining rig, installing it at your place and paying for electricity bills on your own. With cloud mining, you just need to find a suitable package and make an agreement with the provider. The company that provides its mining cloud servers charges some certain fee (as a rule, about 3% from reward + withdrawal fees).
Let’s observe the pros and cons of each solution:
|
Pros |
Cons |
|
|
Hardware mining |
- The hardware belongs to you, you are free to configure and adjust it - Traditional mining is the only way to develop your IT skills and become more tech-savvy |
- The hardware is expensive, while minor investment isn’t always paid off - The hardware is up and running on a 24/7 basis, which results in enormously expensive electricity bills and a lot of heat |
|
Cloud mining |
- Absence, or low maintenance cost - You don’t have to wait for the hardware to be available – mining starts as soon as you purchase service - No hash rate fluctuations - No maintenance, no physical space is required - Daily payouts |
- The initial cost compared to purchase of your own hardware can still be high enough, though it’s paid off - Some mining companies are scams - You don’t educate yourself on mining and don’t experience such excitement as usual miners do |
Finding Your Ideal Cloud Mining Vendor: Basic Issues to Remember
To benefit from cloud mining, the very first thing, is without any doubts, to choose a reliable vendor. Make sure that the chosen cloud-mining provider is not new on the market and has gained an excellent reputation. The platform should be a real expert in cutting-edge blockchain solutions and mining hardware. Choosing one of the best Bitcoin miner providers is highly recommended, don’t parent with the little known platforms or at least carefully read their reviews.
By the way, you can always reveal the latest information from the mining renovation sphere at specific cryptocurrency related sites. Plus, you can check the accurate statistics for today, yesterday, and tomorrow.
Major Features To Look For
Besides, as it was stated before, there are multiple benefits the cloud mining solution should offer to its clients. The most appealing features include the following:
- Really cheap entry level. You can start mining Bitcoin or other currencies with as little as $1.20. Please check the Pricing page to get comprehensive information regarding all cloud mining options and their rates.
- Fast, smooth and easy getting started. The mining starts immediately after confirmed payment. Needless to note, the first payouts are possible within 24 hours.
- Instant, easy, and straightforward withdrawal opportunities. Simply specify the amount you need to withdraw, select the preferred withdrawal method and get it in seconds. By the way, you will highly appreciate the fact that there’s a pretty solid choice of withdrawal possibilities: Bitcoin, credit cards, and wire transfers.
- Unlimited contract length for most cryptocurrencies. That means that your contract is valid till you need it. No need to sign up the contract again and again. Please note that the things are different for Ethereum and Zcash, the length of the contract for these two is 1 year maximum.
- Good Partner program. Take full advantage of the 10% commission on every single purchase your referral user makes. Please visit the main site’s Partner program page for more information.
- 24/7 your secure access to your ultimate account. Go to your Personal mining account to check how things go from any smart device, any time of the day or night, no matter where you happen to be. Browsing detailed, real-time statistics about your cloud mining activity is easy and consistent.
- No hidden fees or additional commissions. Every single transaction is visible to you.
- Special Promo codes and regular customer discounts. Benefit from special bonuses and hot deals, which help you earn even more, spending less.
Already thrilled? Here what you need to go to get started, all 5 different algorithms covered.
How it works:
- Find your vendor. Choose which cloud mining vendors fulfills the above-mentioned requirements and choose the one that suits you the best.
- Register an account. Upon registration, you will be asked for your country of residence, the birth date and, of course, your user name and password. Don’t be afraid, the service keeps your private information secured and protected, this is needed should your account be compromised.
- Cryptocurrency and Hashpower. Decide upon the desired cryptocurrency you wish to mine and the needed hashpower.
Here is a tip for you: Before choosing the particular option, try to understand the main principles of its functionality. - Pay (in most cases, wire transfers in USD and EUR are accepted) and read the contract and sign it.
- Get paid. Different cloud services that mine cryptocurrencies offer varying first earning time. As we can see from the HashFlare review, for example, you can get your first payment if you use this platform within 24 hours.
Please note: in most cases, to receive any cloud-mining payouts, you need to open a crypto wallet depending on the currency you choose. These days, there are dozens of crypto wallet services, but make sure to choose a secure and reliable one.
Anyway, if you do wish to regularly earn Bitcoin or any other digital currency, be the first of your friends to benefit from the state of the art cloud mining service. Definitely, cloud mining is a better alternative to real mining.
Litecoin Cloud Mining
Besides the most popular Bitcoin, you should know some other cryptocurrencies users all over the world consider valuable. First of all, you need to think about Litecoins. Its mining is going to the algorithm called Scrypt. This pool is very popular among various types of users and often is offered by cloud mining companies.
Some of those companies also offer special referral programs. You can become a partner of the service and spread info about cloud mining and cryptocurrency through your family, friends, and coworkers. With every new client you bring to the cloud mining company you use, you increase your payouts. The entire system is very common in other business fields, and it works perfectly in the world of cryptocurrency too.
DASH Cloud Mining
DASH is also one of the most popular cryptocurrency these days. Its mining algorithm is called X11. It is not as expensive as Bitcoins or Litecoins, for example, but its popularity and value is constantly growing.
Such websites as HashFlare offer really low entry prices for this one. This mining pool is a perfect choice in case you want to get a starting point with minimal risk and guaranteed profit.
Ethereum Cloud Mining
Another great example of a popular cryptocurrency is Ethereum. It uses ETHASH mining algorithm. And the best thing about all those companies is that they make every one of us closer to the world of mining and the world closer to cryptocurrency. You don’t need to do researches and buy expensive and powerful machines.
All you need is just to choose your mining plan on the website and purchase it. That is it. Very easy and with no additional fees. The entire mining process will start as soon as the company you are working with will receive your money. Then you can schedule your payouts and even reinvest your earned Bitcoins in some particular cases.
To learn more about the whole cryptocurrency universe you just need to follow us and our reliable reviews. You can count on valuable info and fair conclusions.
Types of Bitcoin Cloud Mining
There are two forms of cloud mining:
- 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.
- Buying Hashing Power – The most popular method of cloud mining – You buy an amount of hashing power (Hash Rate). Which means, that you don’t need to own a physical or virtual mining machine (computer).
The pros of the one are the cons of the other and vice verse.
Hosted Mining vs. Buying Hashing Power
Now let us analyze both the Hosted Mining and the Buying Hashing Powertypes of Bitcoin cloud mining.
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. If this is the case, you have high certainly, that you wont get scammed.
And now the cons of the hosted mining:
- Higher investment and monthly cost – you not only buy the mining machine but need to calculate your costs of maintaining it, which vary depending on the energy use of the Bitcoin miner. Harder to Monitor – the success can be monitored only partly. Check out our tables above (so called monitor tables) to see the most profitable ones out there!
The pros of the Hosted Mining are the cons of the Buying-Hashing-Power model and vice verse.
Bitcoin Cloud Mining Pros
Take a look on the benefits of Bitcoin cloud mining:
- Higher Profits – because cloud mining providers optimize everything, it yields out higher returns.
- Tranquil and cooler home – no more permanent sound and heat.
- Less electricity – the electricity bills will get a lot lower.
- ‘No’ equipment problems – no need to sell the bitcoin miners, when they stop being profitable. No need to configure the bitcoin hardware.
- Less risky – the possibility to get let down by the equipment is decreased by a lot.
- Better prices – Bitcoin Cloud Mining operations involve millions of dollars. This is why the companies are able to negotiate better energy and hardware prices.
Bitcoin Cloud Mining Cons
And now the counterpart list:
- Scam Risk – you can always have bad luck and find a cloud mining fraud.
- Cost of Mining Operations – you need to pay for the hardware management
- Less fun – at least for some it can be less fun to just virtually own something.
- Lack of control and flexibility – harder to control where to mine or when to sell the bitcoin miner.
Best Cloud Mining Websites of 2019
In this guide, we will explore five of the most reputable cloud mining companies. As there are many scam outfits posing as miners, where possible we’ve chosen cloud miners who can prove that their data centers exist or are endorsed by a reputable firm. Take some time to do your own research before investing at your own risk, of course – ultimately this is your money.
IQ Mining
IQ mining was founded at the end of 2016 by the team of experts in blockchain programming and IT engineers. The current members of our altcoins mining team come from different scientific disciplines, but our common faith in cryptocurrencies has brought us together.
- Mining contracts for many cryptocurrencies
- Built-in calculator to estimate profits
Smart mining is “bitcoin mining 2.0” - the new step in cryptocurrencies mining industry. It combines lower costs of Gh/s, thanks to smart contracts with electricity suppliers and higher mining efficiency, due to automated altcoins mining switch. At the end you get 3 times more for lower cost.
HashFlare
You’ve got plenty of cryptocurrency options with this provider.
- Backed by HashCoins
- Buy hash power for multiple cryptocurrencies
- Limited mining contracts
Hashflare is a subsidiary of Hashcoins, another manufacturer of Bitcoin mining equipment which has been around since 2013. Its website gives a detailed rundown of the firm’s data center including pictures.
Hashflare offers you the chance to purchase hashpower for a variety of SHA-256 and Scrypt coins such as Bitcoin and Litecoin as well as Ethereum and ZCash. You’re also free to choose your own mining pool.
Hashflare is open about its maintenance fees: they are $0.0035 for every 10 GH/s of SHA-256 coins and $0.005 for every 1 MH/s of Scrypt coins a day. Ethereum, ZCash and Dash contracts are not subject to any maintenance fees. Your total pay-out will depend on the mining pool you’ve chosen and how much hash power you’ve allocated to it.
At the time of writing, only Ethereum mining contract was available, all others were out of stock.
Genesis Mining
A well-established and highly popular cloud mining firm.
- Well-established with verifiable data centers
- Mining contracts for many cryptocurrencies
- Often sold out due to popularity
As one of the oldest (it dates back to 2013) and largest cloud mining centers, there seems to be no better place to begin than with Genesis.
Its website offers a live feed of some of the data centers which are based in Iceland, a country where cheap geothermal electricity is readily available.
Mining contracts are technically available for all major cryptocurrencies and you can visit your online dashboard at any time to reallocate your purchased ‘hash power’ (so, for example, you could go 60% Bitcoin and 40% Litecoin).
In terms of fees, Genesis currently charges $0.14 per TH/s per day for mining Bitcoin. The price of other cryptocurrencies may vary so we encourage you to make your own enquiries. The website has a Payouts section which you can use to monitor how much you’ve mined. Due to high transaction fees on the network, your mined coins may need to meet a minimum threshold before the funds are actually transferred to your wallet.
The simple interface combined with Genesis Mining’s solid reputation has meant that at times the company cannot keep up with demand for mining contracts (which tells a story of its own). At the time of writing Bitcoin, Dash and Ethereum mining contracts were available for purchase, although this will likely change later in the year.
Hashing24
Bitcoin contracts with the ability to simulate profits before you commit.
- Partners with reputable Blockchain Tech Company
- Innovative features like demo mode
- BTC mining contracts only
The Hashing24 team claims to have been involved in Bitcoin mining since 2012, although the website itself has only been around since 2016. The company appears to have no data centers of its own, rather, it has partnered with big name providers such as BitFury to lease hashpower to customers. Note that Hashing24 is mentioned on Bitfury’s website, which may reassure customers that the operation is real.
If you’re new to cloud mining, you can also use Hashing24’s demo mode to simulate a Bitcoin mining contract to see how much you might earn. This is a good way to help you understand some of the concepts behind cloud mining, but won’t necessarily let you project future profits, as mining difficulty and BTC price will vary over time (naturally).
After registering you can currently sign up for Bitcoin mining contracts only, with the contract being open-ended (lifetime). If these are sold out you can also try out Hashing24’s auction feature which allows you to bid on hashpower from existing customers.
Regardless of how you purchase your mining contract, Hashing24 charges a flat fee of $0.00033 per GH/s per day (although at the time of writing the fee was $0.00017 due to an offer). There’s also a one-time fee for purchasing hashing power with a particular host.
Eobot
Smart on the security front, with the ability to calculate daily profits.
- Built-in calculator to estimate profits
- Secure sign in
- Little information on company owners
Eobot has been around since 2013 and is registered in California. Its owners have decided to remain anonymous, so there are no photos or office addresses on the main website.
Eobot’s site did not play nicely with our ad-blocker on registration, forcing us to use another browser. However, once sign up was complete, we saw that the website notifies users when someone logs into their account from a new IP address. Two-factor authentication is also enabled by default, meaning that in order to access your account, you need to provide a code sent by email as well as your password.
Eobot offers mining contracts either for 24 hours or ten years. The website is neatly laid out and also offers a fee estimator to allow you to calculate daily profits in exchange for the hashpower you purchase. Its main page is very clear that most investments will take around 52 months to break even.
Maintenance fees are currently set at $0.00021/GH/s/day. Unlike other cloud mining websites we’ve reviewed, Eobot also offers an easy to understand explanation of how maintenance fees work. Contracts are available for a wide range of cryptocurrencies.
Due to the owner’s desire for anonymity and in order to stay within the law, direct deposit of funds by bank transfer isn’t supported. You can, however, buy contracts with Bitcoin and via a USD credit card using Epay.
Overall Conclusion
Participating in cloud mining is a great way to earn some side income as well as a fun way to obtain cryptocurrencies. Prospective clients however must pay attention to where they sign up to cloud mining services as there are many scammers and ponzi scheme available online. For those wanting to invest in hyip or ponzi schemes: Think twice if its worth the risk, all hyips / ponzis are scams where only the early adopters win and all others lose. If you enjoy the thrill, try a bitcoin broker instead and test-drive your trading skills.
How to decide for a cloud mining company?
We gathered some cloud miners based on the most important criterias.
- Low fraud risk: Hashflare, IQ Mining, Genesis Mining.
- Low fees: IQ Mining, Terabox, OxBTC.
- Multiple algortithms are available: IQ Mining, Hashflare, Genesis Mining, OxBTC, Eobot.
- Referral program: Hashflare, IQ Mining, Genesis Mining, Nicehash, Bitsrapid, Bitminer.