Steemit Crypto Academy | Homework Task 5 For @besticofinder . Cloud mining ; Advantages & Disadvantages.
My submission for homework task by @besticofinder which is about cloud mining, cloud mining sites, and advantages and disadvantages of cloud mining. Before going to specifics of this task , a brief mention of traditional mining for better understanding of cloud mining is necessary.
Mining is a record keeping process done by miners with help of powerful hardware devices with high computational power, to keep blockchain going for which they are rewarded cryptocurrncy and therby serve as a mechanism of new cryptocurrncy generation. Some of the challenges faced by miners are, high cost equipments, high energy costs, miner consolidation, eco-unfriendly and regulatory issues.
To minimise the challenges and maximise the benefits, miners have been looking for alternatives. They have met some success in the form of novel concepts like mining pool and Cloud mining.
(1) What is Cloud Mining ?
Cloud mining is a novel concept to mine cryptocurrencies without having personnel hardware and softwares required for mining. So the point remains, how is than mining done without equipments. In cloud mining, there are third parties in the form of mining centers (data centres or mining farms) that own the hardware (ASIC, GPU, PCs) and related software. Miners needs to get themselves registered to utilize the services of mining centres. Miners in turn need to pay some charges to these centres.
Types of mining.
There are two popular forms of cloud mining;
Hosted mining.
Leased Hash power mining.
In hosted mining, a miner purchases or leases mining hardware from a mining centre. So the point to understand here is that, how is this mining then different from traditional mining , in case a miner purchases equipment from a mining centre. The answer to this question is that, the mining centre take the responsibility of maintaining equipment and ensure their proper functioning. The advantage with this model of mining is that, a miner has absolute
control over cryptocurrency . Miner has to pay some fee towards the centre for services they provide.
In hash power mining, centres lease hash power or computing power to the miner unlike above model where hardware is purchased or leased. Herea miner needs to open an account in the data centre to use the the hash power of that centre. In return, customer is provided share from the mined cryptocurrency.
The hashpower is calculated in Gigahashs/s and charged per day. For example, hashshiny.Io charges 0.0012 $ / 10 GH/s / day for BTC mining.
(2) What are the best cloud mining platforms ?
Some of the the best cloud mining platforms are ;
- Hashshiny.io
- Genesis Mining
- Hashflare
- IQ Mining
- Shamining
- ECOS
- Crypto Universe
- Hashing24
- BeMine
- Eobot
(3) Discuss the advantages and disadvantages of cloud mining ?
Advantage of cloud mining.
Affordability.
I think one of the biggest problem with traditional mining is high cost of the equipment and maintainance charges. I believe cloud mining has successfully tackled this issue. it is because here a miner does not need to purchase his or her own equipment. Also miners in traditional mining need to spend hefty bucks on electricity consumption. That issue is also very well tackled by cloud mining.
Accessibility
Cloud mining has increased user base or simply we can say that, with the advent of cloud mining , more and more miners are getting involved in this process because it has become cost effective.
Serine indoor environment.
To operate traditional mining hardware, large amount of noise is produced by cooling units of mining hardware . With cloud mining, miners homes have became serine.
No or Minimum technical knowledge required.
As mining is performed by computers, GPUs, ASICs etc. An individual per se has little role to perform. For most of crypto mining enthusiasts, purchasing hardware is a problem. With cloud mining, one just needs to pay charges for hashpower and sit back, relax and check wallet for crypto balance.
Disadvantages of cloud mining.
Centralization of mining.
The beauty of blockchain lies in its decentralization and anonymity. Cloud mining has in a way led to centralisation of mining because miner has to enter into an agreement with the data centre. The agreement may be related to the time period or fee structure etc.
industrial scams.
As transaction are controlled by multiple parties here, chances and incidence of scams are increasing day by day. Also many fake crypto farms are deceiving users many a times. And accumulation of hashpower in farm centres makes blockchain susceptible to more attacks by these power centres.
Low earning.
As miners have to pay some cryptos to mining farms as well and keeping in view the fluctuations in crypto price, it is said that cloud mining has lower earnings especially for those who make it as a source of living. It should come to you as no surprise to say that at times farming units are forced to shut down.
Inflexible nature of centres.
Most of the centres are in a race to mine most popular crypto coins. So in this race, less popular coins that have potential of making more profit are neglected . As users cannot perform mining of coins that farms are not willing to mine.
Conclusion
Cloud mining is a type of mining carried out remotely through mining farms so that a miner need not purchase high cost equipments and maintaianance charges. The hardware is owned by mining centres for which miner inturn has to pay some charges towards these centres.
https://twitter.com/Qamran7007/status/1369715260731523072?s=20
Hello @drqamu ,
Thank you for submitting homework task 5 !
Actually what happening is , the costs we have to pay for hardware and electricity when mining by ourselves are charged from us from our profit .. in cloud mining. So from that's aspect there is no advantage. nice work [7]
Thank you
Thank you.
Only few hours left for post payout. Hope my efforts won't go unrewarded.
@steemcurator01
@steemcurator02
@besticofinder