Crypto Academy Lesson 5: Cryptocurrency Mining - Part 2 – by @besticofinder

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Hi everyone, welcome to this week’s lesson 5. In this homework post, I will be answering some popular questions when it comes to cryptocurrency mining and also giving my opinion and knowledge about another aspect of cryptocurrency mining and what they are all about. I have to say, this lesson 5 topic by the Steemit crypto professor @besticofinder is really an interesting one, explaining yet another aspect of cryptocurrency mining.

Like I shared in my previous lesson 4 post, cryptocurrency mining is a term that isn’t new to anyone who is into cryptocurrency… mining is one of the first things people who come across bitcoin get to know about. However, there is more to mining as far as cryptocurrency is concerned. In this post, I will sharing my knowledge and opinion on the main topic which is cloud mining and what it is all about…

With the continuous growth the cryptocurrency space is gaining, coins reaching all-time highs, btc moving at a rapid rate, people in the cryptocurrency are constantly looking for alternative ways to earn more cryptocurrencies. One of the hot aspects of cryptocurrency is in the area of mining. Like I talked about in the previous part 4 of this series, cryptocurrency mining is simply a process of verifying transactions, minting new coins and adding new block of transaction on a blockchain network.

When it comes to mining cryptocurrencies, Bitcoin mining is the most popular and oldest as far as mining is concerned. Mining can be really profitable that is why there are a lot of bitcoin miners all over the world. However, mining bitcoin has become a lot more expensive and difficult which greatly reduces the profit margin of some, while some it isn’t a profitable venture because of how expensive and scarce the mining equipments are. Nonetheless, miners are doing a really good job in verifying transactions and adding new block on the blockchain.

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What is Cloud Mining and What is it all About?

This is another aspect of mining that has grown very popular. As cost of using mining hardwares continues to go high and the difficulty acquiring and maintaining these mining machines increases, people are constantly looking for great alternatives to lower the cost of mining and that is where cloud mining comes into play.

Like the name says, Cloud mining is basically mining on the clouds. It is a type of crypto mining that uses what is known as cloud computing power for the cryptocurrency mining process. Cloud computing has become a lot more popular in recent times due to its capabilities and powers. With this, crypto mining can harness the powers and capabilities of the large and powerful computer powers of cloud mining and maintained by the cloud mining providers.

When it comes to cloud mining, there are mainly two types known as hosted mining and leased hash power… The hosted mining basically involves users running the mining hardware itself by renting it and earn direct profits and also the company takes their share as well. Leased hash power on the other hand involves users leasing a certain fixed amount of the hash power needed which will be proportional to the received payouts. However profits in this method is greatly influenced by the amount of hash power of the entire network and the price of the cryptocurrency. Nonetheless, regardless of the method, cost of mining power and price of cryptocurrency cannot be controlled and has always influenced profit margins when it comes to crypto mining.

Some of the Best Cloud Mining Platforms

• Hashing24
  This cloud mining provider claims to be into bitcoin mining since 2012, This provider doesn’t own the data centers but rather, they decided to partner with a big name providers to lease hashpower to their customers.

• Eobot
  This is considered as one of the best cloud mining providers. They are said to offer top notch services and users can pay for fractions of a cloud instance. They also allow payments using paypal and other cryptocurrencies as well.

• IQ Mining
  This is another cloud mining provider that aims to cater for people who wants affordable cryptocurrencies mining of coins such as bitcoins, ehtereum etc

• HashFlare
  This is yet another cloud mining provider that is rated to be one of the top cloud mining providers out there. HashFlare is said to offer a customizable pool mining solution, which means that users can choose which pools they want to mine in in order to earn the most profit.

Advantages of Cloud Mining

• No risk of owner’s hardware failure
  This is adds to one of the advantages of cloud mining because since you don’t have to buy the mining hardware, there is no risk of hardware failure which could negatively affect the mining process. With cloud mining, the cloud mining providers have a farm of computing power that greatly reduces the chances of failure since they have so many computers and equipments running.

• Reduction in mining cost
  The cost of mining skyrocketed because of the cost of purchasing mining hardwares, high energy consumption fees, maintenance fee and having to replace hardwares in the case of breakdown. With cloud mining, the mining cost have been reduced as all these are handled by the cloud mining provider meaning reduced cost for acquiring cloud mining.

• No noise and heat from mining machines
  This is a huge plus because we all know the work that these mining machines do to mine these cryprocurrency and as a result of that, there is usually a lot of noise and heat from these mining machines making them not pleasant to have at home.

• Having technical skills not a must
  This is another benefit as because having technical knowledge is a must as far as the hardware mining is concerned. However, with cloud mining, it is not a must to have technical skills because the cloud mining firm provided the technical skills needed.

Disadvantages of Cloud Mining

• High risk of scams
  This is one of the major risks of cloud mining because there are a lot of scam mining services who just operate as Ponzi schemes and claims to be mining firms. These scam/ponzi cloud mining providers shut down once they rate of new signups are not able to pay the old users anymore or sometimes they vanish when they have reaped enough.

• The profits can be very low or zero profits
  This is another big problem because cloud mining providers are in business and want to make profits as well for running those expensive mining farms, this means that the profit margins for users can be really small or fluctuates or sometimes users don’t make profits at all depending on different factors. Also the cryptocurrency prices can massively affect whether there will be profit or not.

• Cloud mining providers might cease to exist
  This is another big problem is the cloud mining world. Like I said above, every cloud mining provider are in business and wants to make profit, so if they are not making profits, they can decide to shutdown the business and cease to exist.

• You don’t have control of your mining equipment
  This can also add up as one of the cons of cloud mining because you don’t have control of your mining equipments as everything is fully controlled by the mining providers giving them the powers to do whatever they want.

Cc:
@steemcurator01
@steemcurator02