What is Bitcoin Cloud Mining? Is it Safe to Use?

Bitcoin mining has become very popular among the crypto enthusiasts though it is still a question if bitcoin mining is safe or not. Investing in Bitcoin mining without struggling with your own hardware is possible. If you do not want to manage your hardware and your hardware is not that much bearable, Cloud mining is the solution. You can still mine Bitcoins through cloud to earn your coins.

Cloud mining is simply using shared power processing system from remote data centers. You do not need a highly qualified hardware of your own. The basic requirement is to have a computer for communications and a Bitcoin wallet. Cloud mining is alternate to traditional method of buying and selling bitcoins. The returns on this investment can take long time than buying/selling bitcoins. Now if cloud mining is cost effective or safe is also a point of attention.

There are certain things an investor need to keep in mind before making any Bitcoin cloud mining investment.

First and foremost, thing is to find a Bitcoin cloud mining provider. The best way is to check the Bitcoin forums and reddit for the feedback and authenticity of cloud services. People generally post about their experiences and the scams/frauds.

Stay away from Scam services. You will find many advertisements with best of offers from forum to sites to reddit. So before spending your money do a proper research and your own study.

Once you choose your cloud mining services you must check and compare price per gh/s or th/s, service charges etc.

Once you have selected your cloud mining services, the next step is to purchase your hash power. There are three types of cloud mining available:

Hosted Mining

Hosted mining providers provides digital mining equipment on lease. After the digital mining you would find a hosting provider which provides your digital asset a cloud space to exist.

It works exactly same way as purchasing domain and hosting it on web.

Virtual hosted mining

Virtual hosted mining is a less expensive than hosted mining. You create your own private server to install your mining software. Because you are the hosting provider in this case hence it costs less.

Lease Hashing Power

Here comes the most popular method of cloud mining. Hashing algorithm decodes a random message or text and assign a number. This method requires leasing hashing power which doesn’t require any physical or virtual computer. The returns in this type is higher as it doesn’t involve any extra cost.

Why Bitcoin cloud mining

-          No installation cost
-          No heat generation and un-necessary noise
-          No maintenance required
-          No extra mining equipment required
-          No electricity cost

Cons of Cloud mining

-          Fraud is easy
-         You have nothing of your own means you do not own anything.
-          Lack of flexibility and low cost. The service provider covers their cost within your profits only.
-          Mining can be ceased anytime as per your provider’s decision.

Payment methods and trials

Cloud mining companies accepts PayPal, credit cards, fiat currencies and Bitcoin itself. If the service providers only accept Bitcoins as payment, then there are more chances of it being fraud. Once a Bitcoin payment is made it cannot be reversed. There are high chances that company receives money and there is no way back.

If a company is offering you free trial or free coins, it is totally a scam. No company in any case would give free cloud mining.

Final thoughts

Investing in cryptocurrencies is both risk and reward. There is really a lot to keep in mind while looking for a cloud mining service and making any investment. Investigate inn all possible ways before making any final decision.

Next Post Previous Post