Could Cloud Mining Services such as HashMart be the Gateway for Taking Bitcoin Mining Mainstream?
Is it better to purchase a proportional share of hashrate rather than running your own mining rig?
I have mined before. Yes, I have had my own fair attempt at mining gold at my father In-law’s farm in the mountains.
I can say now with an earned certainty that mining is a lot of hard work. There are also various methods and tools that one can employ to extract gold from the belly of the earth and in my case, I am more was comfortable using an old fashioned prospector’s trowel and a basic metal detector machine.
As they say, you can never forget your first — I will never forget the day I ‘mined’ my first gold nugget. After picking out a promising patch of land to prospect, I got a couple of good signals from my metal detector in a certain area but I initially dismissed them as I was thinking that I might be picking up ‘hot' rocks. So I switched on my iron discrimination option to see if that would phase out the target, but I kept getting a signal.
I then dug the spot with a hand trowel to check it out further, but the beeping continued. “One more shovel full, then another, then just one more,” I told myself. When I finally ran a handful of material by the search coil, the detection machine sounded out a tremendously loud scream. It was a sound similar to the whistle of an old school steam locomotive!
So I thought I had found yet another steel nail or a discarded piece of junk metal since the area was littered with them. But then I began searching through the dirt in my hand. And there it was, Gold!
Bitcoin mining is a lot the same!
Mining bitcoin is more or less the same as the routine that I have outlined above. Although in place of mining in the dirt this time the mining is completed online. And In place of tools like trowels, picks, and metal detectors, bitcoin miners employ Application-Specific Integrated Circuits (ASICs) or/and Graphics processing units (GPUs).
Bitcoin mining has become so competitive of late that it can only be done profitably with the most up-to-date ASICs. When using desktop computers, GPUs, or older models of ASICs, the cost of energy consumption exceeds the revenue generated that even with a newer model at your disposal, one computer is rarely enough to compete with what miners call “mining pools.”
A mining pool is a group of miners who combine their computing power and split the mined bitcoin between participants. A disproportionately large number of blocks are mined by pools rather than by individual miners. In July 2017, mining pools and companies represented roughly 80% to 90% of bitcoin computing power.
By definition, bitcoin mining is the process of securing the Bitcoin network performed by high-powered computers that solve complex computational math problems (the problems are so complex that they cannot be solved by hand — so yes, you can put away your pencil and writing pad!). The luck and work required by a computer to solve one of these problems is the equivalent of a miner (read: me) striking gold in the ground — while digging in a sandbox. The odds of a computer solving one of these problems is 1 in 6 trillion! That level is adjusted every 2016 blocks, or roughly every 2 weeks, to keep rates of mining constant.
For bitcoin miners to earn bitcoin from verifying transactions, two things have to occur. First, they must verify 1 megabyte (MB) worth of transactions, which can theoretically be as small as 1 transaction but are more often several thousand, depending on how much data each transaction stores. Then as mentioned previously, to add a block of transactions to the blockchain, miners must solve a complex computational math problem, also called a “proof of work.” What they will be doing is trying to come up with a 64-digit hexadecimal number, called a “hash,” that is less than or equal to the target hash. A miner’s computer spits out hashes at a rate of megahashes per second (MH/s), gigahashes per second (GH/s), or even terahashes per second (TH/s) depending on the unit, guessing all possible 64-digit numbers until they arrive at a solution. In other words, it’s a gamble!
Mining cryptocurrencies has become a sensation for the players in the industry as the adoption of digital assets goes global. Bitcoin mining remains one of the most profitable coins to mine given the high reward price of finding a block- but with high rewards comes high risk and costs. With over 10000 individual nodes mining the Bitcoin blocks, the odds of a miner making it while running solo are not really amazing.
Types of mining
solo mining
The solo mining of BTC using your Personal Computer (PC) or mining rig is highly unprofitable given the high difficulty in finding a block. Yes, the machines are yours and you can track all expenses and get all revenue from mining. But on the other hand, running your own rig is so difficult as all responsibilities such as costs of setting up hardware, technical maintenance, tracking profitability falls squarely on your shoulders. That’s why you should draw your attention to cloud mining.
Cloud mining
Cloud mining facilitates the process of mining cryptocurrencies via the internet. Cloud computing is one of the fastest-growing trends wherein computing services such as servers, databases, software, and storage are accessed via the cloud. Big companies with the ‘muscle’ in terms of resources to pull this off facilitate these services and such companies charge on a usage basis just like we pay for our water or electricity usage.
Cloud mining opens up the world of cryptocurrency mining to people who may be in remote locations and might have little or no technical knowledge and/or the hardware infrastructure. The process of cloud mining is very simple and only requires a person to open an account with a cloud mining company via its website and select certain things like the contract period and hashing power.
However, the presence of fraudulent companies or scammers who pose as legitimate mining companies and take prospective cloud miners for a ride cannot be ignored. Therefore one must be sure and it’s of utmost importance to carry out a thorough background check on a cloud mining service provider before parting away with hard-earned money.
How Hashmart is making cloud mining seamless for everyone
Unlike many mining pools and actors in the crypto mining world who seem to try to complicate things and operate under a ‘cloud of mystery, the Siberian-based bitcoin mining company, Hashmart has sought to simplify the mining process by making its online platform simple, easy to use, with customer centred easy to understand data and statistics.
Yes, Hashmart is based in Siberia and Siberia is famous for its cold weather and low rates of electricity (the region charges 2.1 roubles ($0.04) per kilowatt-hour, compared with 5.3 roubles in Moscow) which makes it a very ideal bitcoin mining hub given that bitcoin mining equipment require adequate cooling and tends to be electricity-intensive.
Hashmart is a simple and affordable cloud mining service whose main aim is to introduce the world of Bitcoin and other cryptocurrencies to a wider audience. As of now, Hashmart only offers Bitcoin cloud mining services using the SHA256 mining algorithm, with Ethereum and other major cryptocurrencies being added soon.
As alluded to earlier, the process of cloud mining makes one a participant in a mining pool and involves buying a certain amount of “hash” power. The Hashmart cloud mining platform ensures that that the user does not need to buy any mining equipment as all you need to buy is hash power in the form of mining contracts. While everyone has his/her own strategy in mining and it is up to them to decide what type of contract is the right fits for them, Hashmart provides 2 types of contacts;
1. The 12 months’ contract which does not have maintenance fees associated with it and the holder is able to withdraw all their mined BTC at the end of the 12 months contract period.
2. The open-ended contract which literally operates in perpetuity as it does not have an end date and is more suitable for people who prefer a long-term opportunity to mine BTC as it not limited by any timeframes.
Each participant in a cloud mining pool has a rightful share of the profits in proportion to the allotted hashing power and with Hashmart payments are made daily. The first payment is credited to your account within 24 hours after you pay for the contract. Hashmart also provides simple income forecasting where the user receives precise information about his/her income in the future as soon as they make their purchase of their mining contract. All this information is presented via an easy to read and understandable user dashboard on the Hashmart website.
Make sure to check out Hashmart’s website and demo account so that you can tap into the current Bitcoin bull run!
Disclaimer
The above article is written from an independent perspective as an entry into Hashmart’s writing competition. The above does not constitute financial advice and independent financial advice should be sought before deciding whether to invest in any financial product.
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