Cloud Mining is a type of mining that is used for the production of cryptocurrencies with remote processing power rented from cloud service providers. Cloud systems provide many services over the internet network such as server capacity, database services, and file storage. The process of mining in cryptocurrencies is defined as the process where transactions are verified and recorded on the blockchain.
Companies providing services in cloud mining make mining more accessible to people by allowing users to mine for a certain cost after creating an account. In cloud mining, individuals can participate in mining pools by purchasing a certain amount of "hash power." All participants receive a share of the profits proportional to the hash power rented.
What Are the Types of Cloud Mining and How Does It Work?
Cloud mining works on the same principle as mining cryptocurrencies. It utilizes cloud computing to produce cryptocurrencies that have a blockchain infrastructure. Cloud computing is a technology that allows access to services such as server capacity, database services, software, and processing through the internet. Companies charge a fee for these services. Cloud mining is divided into two types:
- Host Mining
- Leasing Hash Power
What Is Host Mining?
Miners have the opportunity to purchase and lease the necessary hardware for mining. This minimizes the cost of electricity and allows for lower expenses. The produced hash power can be directed to mining pools.
What Is Leasing Hash Power?
Leasing hash power means that the user who wants to lease hash power participates in mining by obtaining a contract from the company. Users can determine the amount of processing power they want to lease. The most salient feature of computing power is that it does not require any hardware to be able to mine. Leasing hash power is one of the most commonly used types of cloud mining methods.
How Do Mining Pools Work?
All participants in a mining pool share their computing resources to increase the probability of creating a block on a cryptocurrency's blockchain network. Calculations are made by machines solving complex cryptographic problems. If the participants achieve a successful result, they receive payment in the form of the produced cryptocurrency. The amount of the reward depends on the computing power and the pooling ratio.
What Are the Advantages and Disadvantages of Cloud Mining?
In cloud mining, hardware is not required as in hardware mining. Mining hardware is provided by the relevant company.
Some of the advantages that cloud mining provides for users are:
- The service-providing company deals with all mining issues encountered.
- Since there is no need for mining hardware, the cost is lower.
- Mining can be done on any cryptocurrency.
Some of the disadvantages of cloud mining are:
- There is a risk of fraud.
- There is a lower profit margin.
- It does not offer a flexible structure to participants.
How to Do Cloud Mining?
To become a cloud miner, you first need to register with a company that provides cloud mining services. Then, the time period for mining is determined by making a prepayment with cryptocurrency or fiat money. Users lease hash power in relation to the payment made and then start earning profits equivalent to the leased hash power.
What Companies Provide Cloud Mining Services?
To be able to do cloud mining, it is necessary to make a contract with a company that provides services in this field. Since some of these platforms contain scams and viruses, it is important to carefully choose the company to receive mining services. Before starting cloud mining, you should make detailed and careful research. Some of the platforms that provide cloud mining services are:
- BeMine
- StormGain
- Ecos
- Hashing24
- KuCoin
BeMine
BeMine has been providing cloud mining services since 2018. BeMine brings together data centers and hardware owners.
StormGain
StromGain offers its users a cloud mining system with a simple dashboard and an intelligent anti-fraud engine.
Ecos
Ecos is a DeFi platform that has over 100,000 users, and also provides cloud mining services.
Hashing24
Hashing24 is a cloud mining platform that has been serving since 2012 and is frequently preferred by users.
KuCoin
KuCoin, a cryptocurrency exchange platform, also provides services in different areas. KuCoin Pool, which offers mining services, has a mining pool that supports digital assets such as BTC and BCH.
