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.