Cloud Mining vs Traditional Mining
Bitcoins grow on trees, if you can imagine the blockchain like one. To grow the tree it needs a network of computers that process blocks of data and add them to the chain. When blocks are solved, the miner gets rewarded with newly issued tokens. Nowadays mining bitcoins no longer requires you to solve the blocks yourself using your own mining hardware. DIY mining requires an ever steeper initial investment. And this is where cloud mining steps in. Cloud mining lets you earn coins by partnering with companies that will do the mining for you. But which is the better type of Bitcoin mining? Know the answer by taking into consideration the following factors.
You need specially designed hardware if you wish to do traditional mining. The catch is that mining hardware is expensive. These machines need to be constantly running in order for you to profit. This could mean sizable electricity bills at the end of the month. Another issue is that you need to place the equipment in a cool area to reduce the risk of overheating. Your return of investment will suffer greatly if you need to buy replacements halfway through their life expectancy.
Meanwhile, with cloud mining, all you have to worry about are the fees imposed by the mining site, which go into providing a better service for their partners and covering utilities. The fees would include the contract and maintenance fee. Although there are some hash power providers with overpriced rates, we at MyHashing aim to provide our partners with the most trustworthy, profitable and simple Cloud Mining Platform. In terms of cost, cloud mining beats traditional mining simply because the cost of hardware is eliminated, and mining farms like ours have better deals on electricity. We are also settled in a naturally cool environment, which means that there’s next to no consumption for cooling.
Hash rate determines the speed at which you finish solving a block. Simply put the hash rate denominates how many calculation your machine can make in a second. The higher the hash rate, the more blocks you can solve and the more bitcoins you can get. But to have competitive hash rates, so you can solve blocks faster than other miners, you need a lot of powerful and, of course, expensive hardware. There are many mining calculators online like this one) that can give you a good idea how much of an investment you’ll need to buy competitive hardware and how much time you’ll have to wait for your return of investment.
But if you decide to cloud mine, you don’t need to buy any machines. The hash power provider will take care of your needs. You just have to choose your hash rate and pay the corresponding cost. The hash rate offered, as well as the duration of your mining, is included in the contract. Plus the rate you select will be constant, meaning you no longer have to worry about deflating hash rates.
Control over Mining
The biggest convenience that cloud mining can give over the traditional counterpart is that you do not solve the blocks yourself. Just buy a contract and wait for your reward. The downside is that you do not get to do real-time monitoring of the Bitcoin mining being done by the hash power provider, considering that their mining farms and their systems are not within your control. You can only refer to the reports and access to data they provide relevant to your contract.
Meanwhile, if you prefer traditional mining, you first need to learn how mining works for you to optimize your control over the hardware and your entire mining operation. And as the miner controlling your equipment, you can decide when to mine and when to stop or switch to a different crypto currency.
If you are looking to have income monthly out of traditional mining, you need really high hash power, which comes with expenses for hardware maintenance, utility bills, and air conditioning expenditures. On top of that, purchasing mining equipment and maintaining its efficiency on the top level can be very expensive and arduous.
While you may be earning now as a hardware miner, the equipment generally has a lifespan of one to two years. Which means that if you do not have enough computing power you may not see a return of investment in that time span. There is always the risk of experiencing equipment malfunction.
With cloud mining, your chosen hash power package is not assigned to a particular piece of hardware within the provider’s massive mining farm. You purchase a hash power contract that guarantees you the computing power and the provider must make sure you receive what you paid for no matter the hardware. Your mining contract continues and so does the operation of your purchased hash rate. Since the maintenance of hardware is not on you, you are always receiving your income rewards for as long as your contract is active.
Both traditional and cloud mining cannot guarantee high profit. Your income from either type of mining depends on the number of blocks that your hash power solves each day. Furthermore, the value of the mined coin can undergo a drastic drop or increase in its price on a daily basis. Mining difficulty is yet another aspect that affects the profitability of mining process. If the average time to solve a block is greater than 10 minutes, the difficulty goes up, and if it’s less than 10 minutes, it will go down. Basically, the more difficultness there is, the more time it will take to solve a given block. These external factors that impact the mining profitability should be taken into account when analyzing which crypto asset is the best for mining. So far, BTC & BCH were the most profitable and mining-friendly assets.
Choosing between cloud mining and hardware mining can be difficult having in mind every variable there is. But if you are new to the crypto mining industry and you are looking for a cost-effective and convenient way of getting bitcoins, then cloud mining is for you.