January 22, 2021

Cloud mining: all pros and cons

Cloud mining: all pros and cons

If you look at the bitcoin rate and the excitement around its growth, it might seem that we are back in 2017. Somebody once again released bulls to the market and new investors are looking for where to invest their capital.

Cloud mining often attracts their attention. In this article, we will tell you how cloud mining works, who provides this service and what profit you can expect.

What is cloud mining?

Cloud mining is mining bitcoins and otherscryptocurrencies using a third-party data center. The data center itself belongs to a cloud mining provider, usually there are dozens of miner rigs in it, which are regularly maintained by qualified specialists.

Typically, providers are large private andgovernment-affiliated corporations that have preferential access to electricity and purchase mining equipment at wholesale prices directly from the manufacturer. These tens and hundreds of miners are located in large premises - warehouses, hangars, factories, etc. The main requirement for these rooms is good cooling and ventilation, because mining equipment generates a lot of heat. Imagine if you had 100 computers running in your garage all the time.

How to start making money on cloud mining?

In order to start making money on cloud mining, you need to follow just five simple steps:

  • Find a reliable provider
  • Register on the site
  • Select and purchase a suitable contract
  • Wait until it ends
  • Withdraw earned cryptocurrency

Why is cloud mining better than independent mining?

It's much easier than mining yourself. Here are just some of the difficulties that cloud mining relieves you in comparison with independent mining of cryptocurrency:

Legal issues and taxes

In some countries, cryptocurrency mining is prohibitedand mining of bitcoins itself can lead to heavy fines. Cloud mining helps to bypass this limitation, because the provider may be located in another jurisdiction. The same goes for taxes. Withholding income is an economic crime, so if you don't want tax problems, cloud mining will help you whitewash your income.

Heat and noise emissions

Thanks to remote mining, the noise and heat of miner rigs is also “remote”. This means that you do not have to look for a special room or sleep in a bitcoin factory.

Electricity and internet outages

In ordinary life, many are faced with a temporaryblackout and internet problems. But what if during every such outage, you lose money? Say, a dollar a second? Few people like this perspective. And this is exactly what happens in independent mining, because every second of equipment downtime, you lose your profit.

Equipment service

This is the most extensive item and includesmost of the problems of self-mining. Buying, configuring, updating, maintaining equipment is a difficult task, even for a technically savvy person. Therefore, many people prefer to transfer this right to specialists and cloud mining is a good solution for such investors.

Are there any downsides to cloud mining?

But along with these pluses, it is impossible to keep silent aboutcons. More precisely, about one, but a very big minus - fraud. The cloud mining industry is full of providers offering to double your capital in one month. And it is true! But the problem is that it is not their clients who double, triple and increase their capital several times, but the fraudulent providers themselves.

Therefore, it is necessary to carefully study the historyof the company's work, require confirmation of the presence of miners and data centers, check registration and tax residency, read customer reviews on forums and social networks and watch reviews by experts in the field. It sounds complicated, but it needs to be done once, so as not to increase your capital, but not to lose it.

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