Cloud Mining 2021 - FAQ, Profits, Risks
Updated: Apr 8
Cloud Mining meaning, services, profit, risks
With this article I will try to answer most common questions and give some advices and warnings, so if you are new to this wonderful new world — read carefully!
Cryptocurrencies & Mining
In-short, cryptocurrencies emission is process of calculation crypto-codes with special algorithms, which is named mining. This process requires expensive hardware and specific technical qualification to setup hardware and maintain the process.
Normally, lot of of miners work together in mining-pool and if one of them find solution which brings coins, the result is divided among all of the participants in proportion of the mining power and time they have provided.
If your are not that well with all this tech and math things, there is more easy alternative - cloud mining, which doesn’t require own hardware, technical expertise and big first investments.
How Cloud Mining works?
From the side of service provider:
Company build mining facility with climate control systems and stable powerful electricity supply and fast Internet, find well qualified tech. specialists to setup and maintain their service and buy a lot of expensive mining hardware which is the core of the service. In fact, the facility is very similar to usual data-centers, but the hardware used for mining is different.
From the side of user:
For user everything is very easy, all you need is very basic computer-user skills, not more than required to read this article.
1) You register on cloud mining service website.
2) You select mining contracts you like & pay for them. There are usually several ways to pay, including credit cards.
3) Everyday cloud mining service add coins to your accounts and when some minimal sum is reached, you can transfer them to your own crypto-wallet and save them there, or sell or use to buy something.
Why Cloud mining companies sell contracts when they can mine themselves?
1. It is the way of diversification risks — they have lot of operational spends to keep facility working, so money from contracts give stability, while coin prices can changes quickly and unpredictable.
2. By selling contracts they can have fast money which they can use to buy more mining hardware right now, not in long time when mining will return the investments. It’s same as when you take loan from bank — it’s less effective than spend own money, but allow to use money right now.
3. Some services sell unprofitable contacts and know about it, hoping for a buyer's mistake.
Cloud Mining: Whom to choose & why
There are several cloud-mining companies on the market and many of them are just scam or are very new on market and so have less reputation. In this article, I will not answer this question, but I advise you to visit our Analytics page, read the articles carefully and make the right decisions. Circumstances change too often, and current information is collected in this section.
Warnings: your risks
You can often find profitability calculators on cloud mining sites. But forecast doesn’t count changing mining difficulty (and changing of block reward in some cases) over time, so on long period income in coins can be smaller than predicted.
That is ScryptCube Calculator for estimating mining results.
Note that the responsible service always warns that daily accruals depends on the difficulty of the network and may change over time.
If the contract has a daily maintenance fee, then the profitability of the plan will be influenced not only by the difficulty of the Bitcoin network, but also by the exchange rate.
And if there is no service charge, then the profitability of a contact should be calculated based only on changes in the network.
The profitability of mining contracts is reviewed in our Cloud Mining Analytics section. Be attentive and make informed decisions!
If you have additional questions - write them in the comments - I will definitely answer everything!
Lucky mining, folks!