Bitcoin Cloud Mining Review – All Nuts and Bolts You Need to Know in 2018

Are you wondering what cloud mining is?

Well, the answer is right here. Also known as Cloud Hashing, cloud mining is the process of investing in bitcoin mining without the complications of using your own hardware. Cloud mining basically is the sharing of a processing power with other miners from a remote data center.

What you only need is a personal computer to create a personal bitcoin wallet holder and for communication purposes. This type of mining is ideal for miners who don’t want to deal with the heat and noise caused by mining hardware. With cloud mining, you will not have to incur costs of maintaining mining rigs.

What is Bitcoin Cloud Mining?

Bitcoin mining is a method of investing in bitcoin mining without managing your own hardware. It simply means sharing processing power from remote data centers. Cloud mining is easy and hassle-free.

You only need a personal computer for the purposes of communication and in some cases for creating a bitcoin wallet. This enables you to mine your bitcoins without dealing with hardware issues such as electricity, overheating or even installations. In short, cloud mining lets you trade in bitcoins without necessarily having a bitcoin mining hardware.

Types of Cloud Mining of Bitcoins

Generally, there are three types of cloud mining available using remote servers which are:

  • Hosted Mining

This type of mining is characterized by leasing a remote hardware from a hardware provider. The rent fee for this type of hosting is agreed between you and your hardware provider and is paid according to this agreement during the renting period. In this agreement, you can choose specifications that suit your remote machine.

  • Virtual Hosted Mining

In this form of mining, you use a remote virtual private server and install your own mining software. You can choose to lease or buy the power needed to run your own mining software on this server.

  • Leased Hashing Mining

Some clients will prefer this method which involves leasing of hashing power from a service provider; this hashing power is denominated in Gigahash/second (GH/s). A preferred hashing power can be chosen and also a period of this lease contract. The profits from the bitcoins are then shared with your service provider.

In this form of mining, no particular physical or virtual computer is needed, it’s the most popular and most preferred form of cloud mining.

The value of the Bitcoin will vary and will depend on demand and supply and also the ease or difficulty in mining.

Main Features
  • Minimal start-up capital: You do not have to worry about costs such as electricity, purchasing and maintaining hardware and other administration costs.
  • Minimal risk factor: you will incur lesser risks when you use cloud mining of bitcoins since you are not actively involved in the mining process.
  • Passive rewards: They reward their users with impressive returns. The returns could be in fixed bonds, deposits or public provident funds.
  • Decentralized: Since mining can be made from remote data centers by its’ many users who are located almost everywhere in the world.

As an investor, you need to understand the risks and benefits associated with cloud mining prior to procuring or making any purchasing decision.

These are the reasons why you might want to try cloud mining:

PROS:
  • A cooler home with no excess heat to deal with.
  • More free space as the hardware sets are big.
  • Quieter environment since there are no humming fans trying to cool down.
  • Minimal electricity cost due to less hardware.
  • Little chance of mining hardware failure.
  • Economical since you don’t require a lot of hardware.
  • No ventilation issues with overheating mining hardware.
  • No trouble with disposing off of hardware when mining is no longer viable.
CONS:
  • There are higher chances of fraud.
  • Inability to change mining software.
  • You have no control of the mining hardware.
  • Mining operations may not be transparent.
  • Mining may end depending on bitcoin value.

How To Determine Profitability

Mining profitability may be determined differently for each type of mining and the hardware involved. Basically, you will consider the initial cost which may be; your electricity costs and initial cost invested in hardware. In this case, since you are dealing with cloud mining, recurring costs like electricity are incurred by your service provider.

The conversion method for determining your profitability is as easy and direct as ABC, it depends if it is hardware or cloud mining. In hardware mining, you can multiply your electricity charge by the power consumption per unit by a standard conversion factor of 0.744. This standard conversion is equivalent to a ratio of seconds per month to energy consumption per KWh.

In cloud mining, the opposite applies, your service provider has given you a certain monthly operating cost. You, therefore, calculate also the cost per kilowatt hour to use for your calculations. This figure is acquired by dividing your monthly running costs by the conversion factor 0.744 also used in hardware mining.

Risks

1) After you have done your test calculation, you might observe this trend. That as you get into more difficult levels of bitcoin mining, profits seem to dwindle. You might observe this 4 to 6 months later. However, do not freak out, the remedy is to re-invest your earnings to maintain a competitive hashing rate. Please note that this move is only speculative.

2) If taking risk is not your cup of tea, please keep away from investing in bitcoin mining. This is because cases of fraud and mismanagement are rampant in the cloud mining platform. It is important that you are aware of these risks before you invest. Do due diligence before you invest by asking pointed questions, speak with former clients and also investigate their social media channels.

3) It is very clear that cryptocurrency investment including cloud mining is very volatile. In a matter of hours, the value of your cryptocurrency could decrease drastically. In the event bitcoin values drop too low, mining contracts may end their operations leaving you with no source of income. Therefore this investment can be an unreliable source of income.

4) Most people will not read and understand the terms and conditions of the mining contract before they sign on it. You need to understand that some contracts are more flexible than others meaning that some will allow you to only mine one currency while others will enable you to switch cryptocurrency. Your mining may, therefore, be terminated depending on the cryptocurrency you chose.

Always watch out for electricity and other running costs as they are not always visible or available on the pricing page.

Fees and Pricing Schedule

Pricing of cloud mining basically involves two components:

  • The basic charge of the contract to acquire the cloud mining service which can be paid just once or paid regularly.
  •  Another component is the maintenance cost which covers electricity, cooling and other maintenance costs. This component is deducted daily from everyday earnings. Some companies have opted to remove it and include it in the initial contract pricing.

That being said, cloud mining pricing can range widely with the cheapest bitcoin contract going for 0.99 USD per GH/s. The average price of contracts ranges between 5-15 USD per GH/s. In the case of some providers, the price will more affordable and reduce significantly if more hashing power is procured. Other providers will rate small and big contracts in the same way.

Potential clients are advised that higher prices for contracts do not mean high-quality services. It’s therefore important for you to study every detail and research thoroughly to understand details of the service. It’s also important to note the cryptocurrency buying options given, either to buy online or to trade for other cryptocurrency options.

Bitcoin Mining Calculator

Using this calculator is not as complicated as many people tend to believe. Below is a simple process that you need to follow when using the cloud mining calculator.

  • The first step will be you entering the hash rate of the miner you prefer to use.
  • Then click on the “calculate mining revenue“ button.

Voila! It is that simple.

However, if some of the values in the bitcoin mining calculate don’t seem accurate you can always adjust them manually. For example, as shown below:

Take note of the following few issues:

  • Returns will always depend on the difficulty of mining. The difficulty in mining is not constant, the difficulty keeps on changing and mostly it keeps on getting more difficult to mine.
  • The revenue you get does not translate into profits. You will still have to put into considerations factors like cost of the mining hardware and the amount of electricity used to run the hardware.
  • Your revenue will be shown in USD depending on the exchange rate currently. The exchange rate is expected to change from time to time.

Hosted Mining vs. Buying Hashing Power

Hosted mining and buying hashing power are some of the major types of cloud mining. It is vital to know how they operate.

Hosted mining is where you lease hardware from your service provider. Together with your service provider, agree on the leasing fee and make arrangements on how to pay the leasing fee. The agreement should also include the specification that will suit your remote machine.

On the other hand, buying hashing power is when you acquire the power that your computer uses to run and also solve a variety of hashing algorithms. Hashing algorithms are used to produce more bitcoins. Algorithms are also used to allow transactions. In buying hashing power, you get to rent on the hashing power in bitcoins whereas in hosted mining it is the mining hardware that is rented.

Mining vs Buying

Mining is the process which brings about the circulation of bitcoins. Mining also involves verifying Blockchain transactions as well as releasing new bitcoins. This process involves accumulating recent transactions into blocks and attempting to solve a coded puzzle.

The first miner who gets to solve the puzzle places the next blockchain then he claims his reward. The reward is what keeps miners motivated and glued to competing in mining. You will notice that since mining is decentralized, any user with access to internet connection and has a powerful hardware can take part in mining.

The number of new bitcoins released is referred to block rewards. The few bitcoins included in the many transactions as a reward to the miner are the transaction fees.

You stand to benefit from these advantages if you decided to mine Bitcoins instead of buying them:

You are able to keep a track of all your transactions.

Apart from investing in hardware, there is no extra cost you will be charged to acquire Bitcoins.

Buying, on the other hand, allows you to get Bitcoins either from the market or on the platforms which sell Bitcoins, either from the market or on the platforms which sell Bitcoins. You can buy Bitcoins from anyone holding them so long as they are interested in selling them to you.

Depending on your source of Bitcoins, you can purchase them by use of a credit card or debit card. You can use wire transfers, you could also use hard cash or use other cryptocurrencies to buy Bitcoins! All these will be determined by your sellers’ place of residence. It is interesting to know that some countries even have bitcoins ATMs. There are few advantages of buying Bitcoins over mining.

Let’s have a quick look at them below here:

  • Mining can really become an expensive affair. What with buying a dedicated machine, storage, maintenance and the electricity bill incurred to run it! The initial costs may translate into lower profits in the long run.
  • Unlike in mining which may end up taking hours or even days, buying is instant. As soon as your payment is verified, you get to receive the Bitcoins immediately.
  • Transaction costs involved in buying Bitcoins are lower compared to mining transaction costs.
  • During mining, the value of your Bitcoins could fluctuate in case of technicalities. You can avoid these value fluctuations if you were to buy Bitcoins instead of mining them.

I am sure you have noted that both Bitcoin mining and buying have a number of pros and cons.

Cryptocurrency Cloud Mining Companies

Several companies offer cloud mining services. We could have a look at a number of them here.

  • Hashflare.io – A product of the Hashcoin crypto mining experts. Offers miners with a lower entry fee and minimizes risks and expenses.
  • Genesis Mining – This is one of the safest crypto mining platforms. It was formed towards the end of 2013.This company offers a variety of packages and offers the possibility of mining a number of cryptocurrencies. You could mine the following cryptos from Genesis Mining: Monero, Ethereum, Bitcoin, Zcash.
  • Hashing24 – It was formed by a team of professionals mainly for miners who wanted to be involved in bitcoin mining. It offers the newest technologies available on the market today.
  • CCG Mining – Among the best cloud mining companies.
  • Eobot – It was registered in Australia in 2013.It elaborates to its’ users on how maintenance fees work. It has an inbuilt calculator to calculate profits. Its mining contracts are either 24 hours or five years long.
  • Hashnest – Bitmain launched this company in 2014. Hashnest has mining farms all over the world even though Bitmain operates in China only.

Users Reddit Opinion

Cloud mining nowadays has become more of a coin mixing business and also to hide traces. What you may not realize is that it is not very profitable in the long run. Mining at no electricity and maintenance cost is less profitable than holding cryptocurrencies passively. Instead of investing in mining you should use the money and time to buy bitcoins instead.

A user wanted to know how allotting of equipment cost was made and if the resale value was to be ignored. This is not true since several miners have already made fortunes.

Mining will take place until it has been fully utilized.

The good thing about cloud mining is that the use of resources contributes to the security of the platform. Assumed poor returns also keep away fraudsters.

List of Free Cloud Mining Services

Name Description Pros/Cons
Eobot It is quite easy to use this service and it is also very profitable. You can start angling for hash outputs without straining your rigs. Mining can commence immediately you have bought a contract.
PROS:

• You can withdraw up to ten times free of charge.

• Supports a variety of cryptocurrencies and has an option of converting your returns into any of the available cryptocurrencies.

CONS:
• Lacks a detailed statistics save for the earnings and referrals.
Bitzmining It was founded in 2013 and has developed special mining algorithms. This combined with the latest hardware makes this platform guarantee high returns. They mine and give users profits on a daily basis.
PROS:

• It easy and flexible to use.

• Has a high level of security.

CONS:
• They limit the number of bitcoins you can mine.
Hashcoin It is one of the top mining companies which provide mining equipment to its users. It provides multiple options for miners through their suites.
PROS:

• It is pretty simple to use. Their machines are plug and play.

• Offers technical support at all times.

CONS:
• It comes with a daily maintenance fee.

Scams

If you are a potential miner it is important for you to note that scams do exist even in bitcoin mining. Try as much as possible to be careful before signing into any cloud mining contract.

Be cautious and avoid the following providers like the plague:

  • Biteminer

Its’ concept appeared legit at first, only a small fraction of its’ users earned back their money. This company never provided any evidence of their operating base or mining hardware.

  • Hashinvest

Do not be confused by its’ appealing name, this company never had any intentions of paying back its’ users at any one time. Shortly after it was launched in 2016, they stopped paying users their returns.

  • Hashocean

Before they announced that they would be moving mining operation to a different datacenter, they paid their users for a number of months. It shut down as soon this information became public.

Bitcoin Cloud Mining Software & Hardware

Bitcoin mining software is equally important as cloud mining hardware. This software will connect your bitcoin miner to a blockchain. The software will also connect you to a mining pool if you are mining from a pool.

A mining software monitors your miner’s input and output. It also displays statistics such as the miner’s speed, hashrate and temperatures.

Bitcoin mining software for Windows:
  • CGminer
  • Bitcoin Miner
  • BTCMiner
  • EasyMiner
  • BFG Miner
Bitcoin mining for Linux:
  • CGMiner
  • BFGMiner
  • EasyMiner
Bitcoin mining software for Mac OS X
  • RPC Miner
Cloud mining hardware includes the following:
  • Central processing unit (CPU)
  • Graphical processing unit (GPU)
  • Application- specific integrated Circuit (ASIC)
  • Field- programmable gate array (FPGA)

FAQs

What causes the value of my cryptocurrency to go down?

This is caused by the exchange rate which is not always constant.

Will I be charged monthly fees?

Yes, some sites may ask you to pay monthly fees.

Do you restore the initial cost after the plan has ended?

This cost is non-refundable since it’s used to purchase more mining hardware.

Is cloud mining really profitable?

Profits are based on the current bitcoin prices. For example, visit Bitcoinwisdom. It will help you to understand further on the profitability of cloud mining.

Final Verdict

By now I am sure you have an insight of what Bitcoin cloud mining is. You are also aware that there are several types of bitcoin mining and these types are no longer alien to you:

  • Hosted mining
  • Virtual hosted mining
  • Leased hashing mining

Certainly, you are also aware of how to calculate cloud mining profitability. Since just like any worthy investment there are scammers after your hard-earned money we have pointed out scammers. Keep away from these scammers. Do a thorough research before investing in any company.

There also exist legit companies which will reward you for mining with them and each one of these companies has pros which outweigh the cons. Choose wisely and you’ll succeed!

Also feel free to check Bitmann for more information.

We will be happy to hear your thoughts

Leave a reply