Cloud Mining Explained
Cloud mining is an easy way to earn crypto by purchasing computing power, renting equipment, or holding a miner-pegged NFT.
Cryptocurrency mining has resulted in lucrative sources of passive income, although traditional mining projects have become associated with technical demands requiring expert knowledge. Significant skill and resources are needed to participate in many proof-of-work mining projects, where tokens are yielded by validating transactions recorded on a blockchain.
Additionally, the computers required to carry out mining work are expensive and make significant energy demands, while connecting one to a blockchain (and subsequently, to a crypto wallet) can be complex. Current-generation ASIC miners sell for between eight and ten thousand dollars, and it can take hundreds of dollars worth of energy for a miner to validate one bitcoin transaction.
Cloud mining projects have emerged in response to these barriers to mining with private equipment.
Intro To Cloud Mining
Simply put, cloud mining is the renting or purchase of remote mining power from a provider.
- Cloud mining providers manage mining operations for customer
- 3 cloud mining models currently exist: hosted cloud mining, hash power leasing, and NFT cloud mining
- Cloud mining providers can offer either fixed or variable returns, and either single or multi-token returns
These and other aspects of cloud mining are all discussed in depth below. We’ll begin with a description of cloud mining in general, and the type of facility that hosts rented miners.
What Is Cloud Mining?
Cloud mining projects let customers remotely participate in cryptocurrency mining.
Cloud mining is a mechanism for remote cryptocurrency mining where a provider rents out mining hardware or sells cloud computing power to a client, while also taking care of all mining operations for the client.
This process allows people to mine without managing their own hardware and software, and without facing the costs associated with private mining (such as energy and maintenance). Depending on the provider, cloud mining customers sometimes absorb some mining energy costs, but these are much lower than energy costs for private mining.
Cloud mining customers typically connect their electronic wallet to the provider’s platform, or they create a wallet native to it–either way, this lets clients collect mining yields ‘remotely’, over a cloud server.
Many cloud mining platforms–such as ECOS– also offer built-in crypto exchanges where you can convert your digital assets to fiat or other cryptocurrencies. Usually cloud mining services deposit crypto payouts into clients’ wallets frequently, with daily deposits the norm.
Mining Farms
Cloud mining providers often run large mining operations called mining ‘farms’: indoor spaces such as warehouses where many miners operate at once, thereby driving down operational costs through economies of scale.
Individual mining rigs or portions of computing power are rented out from mining farms to various cloud mining customers. A miner in a New Zealand farm, for example, could send the crypto it issues to a cloud mining customer in the United States.
Types of Cloud Mining
Cloud mining projects can be organized into either hosted mining or hash power leasing. NFT cloud mining, also discussed below, can theoretically involve either model, but currently the only NFT mining project uses a modified type of hosted mining.
Hosted Cloud Mining
This type of cloud mining refers to the renting out of mining hardware by providers who host miners in a dedicated facility like a mining farm. Hosted cloud mining providers are responsible for maintaining and operating the miners, saving their clients time and resources.
Some of the top cloud mining companies that host mining hardware include:
- Genesis Mining
- Bytebus.com
- MiningRigRentals
Hash Power Leasing
A cloud mining provider can also sell computing power rather than rent out individual miners. The type of computing power needed for mining is called hash power, which measures how many algorithmic problems associated with blockchain transactions a computer can solve in a given period.
Miners actually ‘race’ against each other to solve these problems first, which results in the winning miner issuing cryptocurrency. The more hash power a miner has, the more likely it is to solve a given blockchain algorithm first and issue cryptocurrency.
Hash power providers typically pool this computing power into large reserves, and rent out portions of it that can exceed the power of a single miner. That means if you lease hash power, you’re probably purchasing part of a large pool of power–a part which can surpass the power of a single miner. This raises your chances of beating out individual miners racing to solve blockchain algorithms, resulting in higher mining returns than with private hardware mining.
Some popular hash power providers include:
- Copium Mining
- NiceHash
- ECOS
NFT Cloud Mining
This is a new type of cloud mining, offered by only one NFT project as of writing: the MetaBlox NFT collection secures rights to the rewards produced by MetaBlox miners. Instead of recording crypto banking transactions on a blockchain, these miners provide secure, automatic WiFi connections to the public.
They do so by verifying special web credentials in a blockchain mining process that ensures no centralized authenticator or server holds users’ data. To access WiFi at MetaBlox miners, anyone can obtain one of these credentials–called a Decentralized Identifier or DID–from the free MetaBlox app.
MetaBlox miners issue mPoints in proportion to the amount of WiFi connections they establish. After the project’s token listing in 2024, mPoints will become convertible to ROAM tokens.
The NFT-pegged miners are located in busy places where demand for WiFi is high–places like cafes and community centers, maximizing cloud mining returns for MetaBlox NFT holders.
The WiFi miners are also fully maintained and powered by MetaBlox, so NFT holders don’t accrue any of the operating costs associated with mining, and pay zero for energy.
The MetaBlox NFT makes one final innovation on cloud mining: MetaBlox miners consume significantly less energy than traditional ASIC miners. This is because MetaBlox miners are routers, and only need the energy required to establish WiFi connections. Conventional miners solve calculations for much more complex tasks, so require more computing power and thus more energy.
NFT Cloud Mining & WiFi OpenRoaming Deployment
MetaBlox NFTs not only collect the tokens mined by public WiFi routers–they also support public WiFi deployment, because the NFT sales support the installation and operation of MetaBlox miners.
MetaBlox’s system of public WiFi access points provides WiFi OpenRoaming coverage. This special WiFi feature lets DID users connect to the internet via any MetaBlox miner or other OpenRoaming hotspot, and enjoy automatic connections at any subsequent hotspot. In addition to MetaBlox miners, these hotspots include over 2 million local networks provided by members of the Wireless Broadband Alliance.
When a DID-equipped device comes within range of a MetaBlox miner for the first time, the app will present the option to connect. After this initial connection, the device will automatically reconnect when they come within range of any MetaBlox miner or WBA router.
Cloud Mining Contract Types
Cloud mining providers offer two main ways of selecting a contract for this service. Depending on the provider, clients can either select their contract from a menu of predetermined plans, or they can fully customize their contract by choosing the exact mining power, duration, or returns they want.
Predetermined Plans
With predetermined plans, clients get to choose their cloud mining contract from a set of options offered by the provider. Usually these plans include a contract duration as well as the mining power rented for that period. For instance, Bytebus.com offers a one hundred dollar contract for three days of mining at 64 th/s (terahashes per second) computing power.
Customizable Plans
Other cloud mining services let users decide plan variables like how much they want to pay, how long they want to mine, how much computing power to purchase, and even how much crypto they want to earn.
ECOS has a contract selection tool which produces a cloud mining contract based on desired price, return, and duration. As shown below, the contract selection platform uses a slider for each cloud mining plan variable.
Fixed vs. Variable Returns
Cloud mining providers also have different policies regarding returns on investment. Some providers guarantee that their plans produce a fixed return of a given amount of crypto. For instance, a customer who spends one hundred dollars on Bytebus.com’s three-day plan is guaranteed a $106 return. Other providers, such as MiningRigRentals, simply deploy miners for customers and do not guarantee any particular return.
Multitoken Mining
One final way to distinguish cloud mining services is whether one or multiple cryptocurrencies are mined under a single contract. Some projects rent out miners that can generate multiple types of crypto, while others do not. Genesis mining, for example, lets customers mine multiple coins simultaneously on one contract. On the other hand, some providers advertise mining contracts for dozens of different coins, but do not allow multi-coin mining.
Conclusion
Cloud mining is the easiest and most effective way to make money from cryptocurrency mining without buying and maintaining your equipment, and MetaBlox’s NFT is one of the easiest ways to cloud mine! Explore more about the project on its website and social media channels!
