Free Cloud Mining for Everyone!

What Is Cryptocurrency mining?

Cryptocurrency mining is the process used by Proof-of-Work blockchains, such as Bitcoin, to securely operate the network in a decentralized setup and add new blocks of transactions.

Miners use high-performance computers to solve complex cryptographic puzzles. When a miner effectively solves a puzzle, they create a block and receive a reward for their efforts. As such, mining crypto is very popular. After all, who wouldn't want to earn cryptocurrency?

But mining cryptocurrencies on your own, i.e. solo mining, can be similar to gold mining: technically challenging, expensive, and high-risk with low rewards. The process requires costly computers, a high-bandwidth internet connection, electricity, and technical expertise.

Even after all that, a proof-of-work system favours miners with greater computational capacity,  meaning competing with large companies with extortionately expensive mining rigs can be extremely difficult.

Luckily, there's a much less complicated alternative: cloud mining. But what is cloud mining exactly?

Let's explore:

What is Cloud Mining?

Cloud mining involves leasing equipment or renting computing power to mine cryptocurrencies from data centres. It stops the need for physical mining hardware setup, high-speed internet connection, electricity sourcing, and maintenance.

These data centres take care of everything on the backend and merely ask for the user's money to rent an entire mining rig or lease some of the farm's power. 

Instead of setting up your hardware and servers that run 24-7, you choose a subscription plan, pay the fees to the respective company, and rent an entire rig or just some of the farm's "hash power". 

But before we get into the specifics of what that means precisely, let's explore why cloud mining in the first place.

What Is Cloud Mining For?

Cloud mining enables anyone to earn crypto rewards through mining, but it involves a little more than that.

You may already know that mining cryptocurrency involves running expensive machines that consume a lot of energy and produce significant heat and noise, which can be inconvenient to have at home. Cloud mining allows you to avoid the hassle of dealing with heat, noise, and high energy consumption associated with traditional mining methods. You can start mining cryptocurrency without purchasing or setting up specialized equipment. By paying a fee to the company, you can receive a share of the crypto they mine.

Let's explore the main types of cloud mining, as it can be more complex depending on the method you choose.

Types of Cloud Mining

There are two main ways to approach cloud mining: Hosted mining and Leased hash power. So what is the difference between them?

Hosted Mining

Hosted mining is a type of cryptocurrency mining. In this method, you rent an entire mining rig that is located in a mining farm. The rig stays in its physical location, but you fund it virtually. The company that owns and operates the mining setup is responsible for all the maintenance, so you don't have to worry about issues like heat or noise.

When you rent mining equipment, you can define your preferences and strategy. You must pay a commission to the company when you receive rewards.

Leased Hash Power

Leashed Hash power works a little differently. With this method, you may still require the assistance of a mining farm to mine cryptocurrency. However, instead of renting a whole mining unit, you can rent a portion of computing power for a specific period. This computing power is known as "hash power", and it enables cloud miners to earn mining rewards based on the power they are willing to pay for rather than being tied to a particular piece of equipment.

This means no hardware, upkeep time, or maintenance on the individual's side. When you rent more hash power, you earn a greater share of the mining rewards.

With this method, the company has the ultimate control over your mining efforts, from running the rigs to distributing the rewards. They usually charge a higher fee as a result.

How Does Cloud Mining Work?

All cloud mining operations involve mining farms at their core. These companies may own multiple mining rigs, enough to rent total pieces of equipment or just portions of their computing power to individuals hoping to make some passive income. How does that work exactly?

Mining Farms

Large-scale companies set up vast mining operations called 'mining farms'. Equipped with multiple high-powered computers, these farms can more efficiently mine cryptocurrency than any individual.

Renting Equipment or Hash Power

From here, the mining farms offer up entire mining rigs or just some hash power for rent. This is how individuals like you and I can participate remotely in the mining process.

Earnings Distribution

After investing in cloud mining, the renter receives rewards in exchange. So, those who rent just the computing power earn a proportion of the rewards. Then, those who rent an entire rig pay a portion of their rewards to the mining farm. 

This is how cloud mining simplifies and increases accessibility to the mining process for everyone.

Risks When Cloud Mining Crypto

Of course, cloud mining isn't risk-free by any means. Please find below a statement that highlights three important risks that you should take into consideration:

Fees

Cloud mining can be less profitable due to service fees and operational costs. Sometimes, purchasing the cryptocurrency and HODLing can prove more profitable than mining.

Market Volatility 

Cryptocurrencies are known for their price volatility. A sudden drop in cryptocurrency values can turn profits into losses.

Regulatory Hurdles

The legal landscape for cryptocurrency and mining is evolving and varies globally. 

Miners must be aware of regulations in their own country and the mining company's jurisdiction to avoid potential legal repercussions.

Now that you know the risks of cloud mining, let's look at other things you should know.