Cloud Mining: A New Approach to Cryptocurrency Business
By Victoria M. on The Capital
Miners are a necessary and important link in the cryptocurrency chain that takes an active part in the issue of coins and maintains the system’s performance. A couple of years ago, it was possible to mine on a home PC and make a profit; now, the mining process has become so complicated that even collective pools and large farms do not always pay off. Therefore, cloud mining services began to appear.
What is Cloud Mining?
The essence of the method is simple: instead of spending money on equipment, the user rents it from large companies. Such companies are most often created in countries with affordable electricity tariffs and a cool climate (these countries hold the largest mining pools). The user pays them a fixed commission and a percentage of the profit.
Thus, cloud mining is mining cryptocurrency without buying your own equipment, using rented equipment that may be located on another continent. Users don’t have to deal with the issue of its location and do not incur additional costs for electricity, but simply pay a fixed fee for using cloud mining services.
Cloud mining has a number of advantages over other types of cryptocurrency mining, namely:
- most mining companies have legal status;
- users don’t have to configure additional equipment;
- users leverage not only increases or decreases in the exchange rate but also increase funds using interest rates;
- miners do not need to make investments on special sites or undergo a test mode of operation;
- the total fee is fixed in advance and does not depend on rate fluctuations;
- users can invest in different cryptocurrencies, and protect themselves from fluctuations in rates;
- miners can also engage in referral programs and increase profitability by attracting new customers.
Note: When investing in mining, it is important to carefully select the cloud computing service since many HYIP projects actively use the legend of cloud mining, thereby hiding the essence of the financial pyramid.
How Cloud Mining Works?
Several years ago, it was only possible to mine cryptocurrency on your computer. A prerequisite was its high performance and uninterrupted power with cheap electricity. However, over time, the complexity of computing processes has grown, and now it requires powerful specialized equipment.
Because of this, professional miners began to build entire farms, consisting of a large number of specialized equipment. As the complexity of the computer network grew, the cost of buying and maintaining equipment increased, and profitability decreased. Also included is a decrease in rewards for mined blocks. Thus, many users cannot mine cryptocurrencies using their own resources.
In response to this trend, a new type of business has appeared: providing computing power for cloud mining. Such services will allow cryptocurrency mining to a wide range of people and companies will receive additional investments. In addition, mining in pools is generally more profitable than mining separately, and the remuneration received is distributed among all users depending on how much capacity they own.
Cloud Business
Today, a service for cloud mining is a productive form of business. Large companies build special computer farms with a large number of specialized equipment and offer people the opportunity to purchase contracts for the computing power of coin mining. Companies that provide cloud mining services somewhat resemble a hosting provider: they share their capacities with the users who rent them.
Of course, it is quite a challenge to develop a blockchain solution with adequate security and reliability; however, the ROI of creating a mining project makes it well worth it. Needless to say, the service benefits users too, as cloud mining is one of the most promising methods of investing money today, showing very high profitability, sometimes reaching up to 300% per year.
Having created a cloud mining service, you can offer many types of investment opportunities for the crypto community:
- investing in mining facility: an investor can purchase equipment from your company;
- cloud investments: an investor can buy a hash rate and receive passive income from cryptocurrency mining;
- investments in the development of equipment: an investor can invest in the development of new, more powerful, and less energy-consuming equipment. This one is the best option for large investors with long-term prospects.
Two types of cloud business
At the moment, there are two options for cloud mining business:
1.Cloud mining through remote hosting
The main essence of cloud mining through remote hosting is that you provide a complete set of equipment for rent. A service-provider company will be responsible for setting up and configuring mining equipment. The commission paid by the miner can be used to cover the costs associated with maintenance and electricity. These funds help to control technical risks — service maintenance, breakdown, etc., as well as risks that may arise during the transportation of mining equipment. The advantage of remote hosting is that the user himself controls the operations of extraction, support, and maintenance.
2.Cloud mining through the remote purchase of a part of the equipment’s power
A company places ASIC-machines in a special room with necessary conditions (temperature, safety, etc.) Maintenance, in this case, is carried out by professionals of blockchain technologies. Service development teams choose the necessary building, equip a mining farm there, and then throughout the entire activity, maintain the equipment’s operability 24 hours a day.
Final Word
Cloud mining services are beneficial to both their providers and users. They offer contracts that allow earning income from cryptocurrency mining without buying expensive equipment. Users work with the service remotely and do not interfere with the mining process as all equipment is located in a specially equipped computing center.
