Crypto Academy Week 5 // Introduction to Cryptocurrency Mining (Part 2)//Submitted to @besticofinder
I am delighted to be your student again this week @besticofinder.
Last week we discussed mining and the problems facing miners.
If I may recall, we said mining is a process where a single computer or several computers take on various tasked to discover new cryptos in return for a reward in form of crypto coins.
Week 5
(1) What is Cloud Mining ?
(2) What are the best cloud mining platforms ?
(3) Discuss the advantages and disadvantages of cloud mining ?
Task 1
(1) What is Cloud Mining ?
Cloud mining from the cryptocurrency view can be described as a type of mining where the devices used in mining cryptocurrency are leased, rented or even borrowed and without even a direct operation or installation and running of the software.
Cloud mining is primarily a service provider. source
With this kind of mining, mining is made accessible to everyone as you are able to buy a certain amount of hash power with directly operating the system or software device. This form of mining requires a third party cloud provider and I can say it is centralized.
Mining has been described as the backbone of cryptocurrency, such that transactions are verified and added to the alread existing public ledger, new blocks are created and above all it allows the introduction of new coins and cryptos.
In cloud mining, you can choose to open an account and simply be part of the mining process, recieving rewards without directly operating anything.
Task 2
(2) What are the best cloud mining platforms ?
The most common forms of Cloud Mining are:
1)Hosted mining
In hosted mining, assuming I am the customer, hosted mining implies that I rent or buy mining equipments into a mining facility for the purpose of mining. Now the miner is fully in charge of the functionality of this mining equipments, as he ensures that the equipment are serviced, and manage accurately. By this I have direct control over cryptocurrency and it also ensure that the cost of running the mining equipment is reduce even though there could be other cost associated to this. It is the most used type of Cloud Mining.
2)Leased hash power mining
In this form of cloud mining, the customer leases hash rate or computing power to the mining farm for the purpose of mining cryptocurrency, who inturn awards some share to the customer. This forms of Cloud Mining has been discovered to be best suitable for altcoins and it requires an account opening through a website. The total rewards is usually based on the mining hash rate.
Best platforms for mining are:
CGminer
BFGminer
Multiminer
Awesome miner source
Task 3
(3) Discuss the advantages and disadvantages of cloud mining ?
For the advantages of Cloud Mining, they require less equipment and hardware theyby reducing the overall running cost involved in cloud mining.
Since a third party is required on this kind of mining, it promotes centralization of cryptocurrencies.
As for the disadvantages, I will remind us of the problem of hackers in the system. Accounts are safeguarded by private keys, if these key gets to the wrong hands makes account vulnerable to attack.
Moreover, prices of cryptocurrency are not stable, this can cause losses to miners or a more reduced profit margin.
Thank you for this lecture sir. See you next week.