In the last few years, cryptocurrency mining has received a lot of criticism due to the sheer amount of time and effort required to purchase sophisticated hardware, maintain it, and also incur electricity expenses.
As a result, numerous miners have reconsidered indulging in crypto mining since the ROI has been pretty low and realistically not worth it.
These challenges gave rise to the concept of cloud mining, which allowed people to focus on mining operations and generate more profits instead of worrying about the hardware.
In this article, I will deep dive into the world of cloud mining, discuss how the platforms work to be able to answer your question of whether or not cloud mining is still worth it. Let’s get right into it!
What is Cloud Mining?
Cloud mining is the process of mining cryptocurrencies by leveraging all the necessary resources – both hardware and software – from an online cloud company for a nominal fee. This way, you do not have to spend on the equipment, the software, maintenance, or deal with problems that might occur with your hardware
. Only the cloud provider will have to worry about all of this. All you’ll need to do is pay for the service.
Furthermore, cloud mining makes crypto mining more mainstream and accessible to people with simplistic systems they use in their day-to-day life.
There are two significant types of cloud mining – hosted mining and leased hash power mining. In hosted mining, you can rent hardware that’s present in a remote facility of the service provider. In leased hash power mining, you essentially lease the hash power or computational power associated with a particular cryptocurrency from a mining farm.
How to Start Cloud Mining?
Step 1: Choose a Cloud Mining Site
Selecting the right cloud mining site for your mining operations is crucial. Numerous Ponzi schemes and scammers on the internet pose as cloud mining platforms. Be sure to choose a reputable cloud mining platform based on your requirements.
If you’re unsure, do a background check by looking through customer reviews. Alternatively, you can look at the best platforms and you’ll find numerous portals and websites that list excellent service providers.
A few common cloud mining platforms are Shamining, ECOS, Genesis Mining, and EasyMiner.
Step 2: Create an Account and Deposit Funds
While most platforms have a similar process for creating an account, their fees would vary. Usually, the amount you pay will be in the form of a contract. The different aspects of this contract are:
- The money you deposit/pay
- Hash power you get for the amount
- The number of months for which the contract will last.
For instance, Genesis Mining’s packages start with $525 for 17.50 MH/s for 12 months of Ethereum mining. It has different packages for Ethereum and other cryptocurrencies, where the pricier the package, the higher the hash power.
You can compare various packages on different mining platforms and choose the one that best suits your requirements.
Step 3: Choose a Cryptocurrency to Mine
Every cryptocurrency does not have the same amount of profitability. Some cryptocurrencies can enable you to earn more money than others. Multiple factors affect a cryptocurrency’s profitability. These include hash rate, market price, block reward, difficulty, levels, etc. So, understand these and then choose the right cryptocurrency.
Furthermore, it is essential to choose suitable mining pools. Cloud mining services have numerous mining pools on their portal, and these are advantageous in some instances. For instance, while Bitcoin mining alone would barely get you any rewards, you can earn a considerable amount with pools.
Step 4: Collect Your Share Until Contract Matures
The final step is relatively simple. You will be earning profits on a daily basis that the cloud mining services would deposit in your wallet on a monthly or weekly basis, depending on their structure. You can earn the amount until the contract period ends, after which you can choose to renew it.
Choosing Which Cryptocurrency To Mine
While I mentioned earlier that specific cryptocurrencies would be more profitable than others, there are a few more factors regarding profitability.
Short-Term Potential of the Coin
There are specific cryptocurrencies with good potential to perform in the short term. This means, considering the current scenario, they would be suitable investments for a shorter period of time (say, 1 month).
Long-Term Potential of the Coin
This is essentially the opposite of short-term. Here we look at cryptocurrencies that are more sustainable and will grow steadily over a long period. Cryptocurrencies such as Ethereum could be a possible long-term mining option since their value is bound to increase in the coming year, considering their migration to the PoS consensus mechanism.
In PoS (Proof-of-Stake) various people can deposit (stake) a minimum amount of the crypto asset (say Ethereum) into the network’s smart contract and become a node that verifies and validates transactions.
This is perhaps one of the most significant factors you should consider while choosing a coin. The ideal case is to have low competition and high returns. However, this is, more often than not, hard to find. So you need to try to balance it out.
Bitcoin is a highly competitive market for miners, and, as mentioned earlier, mining it solo would barely get you any rewards. So, choosing Bitcoin wouldn’t be wise since you could earn more profits in another cryptocurrency for the same hash-power.
This factor very simply means how much percentage profits you would earn. Based on the amount you pay to the cloud mining service provider, the amount you pay for your electricity, etc., you’ll need to have enough profits when you deduct your investment.
One way to go about it is choosing the right cryptocurrency that lets at least 3 of these factors be in your favor. The other way is to diversify and see if you can choose two cryptocurrencies to mine that satisfy all these four factors. While one can be for your immediate profits, the other can be for earning in the long run.
Frequently Asked Questions about Cloud Mining Profitability
Is cloud mining worth it in 2022?
Cloud mining in 2022 is going to be one of the top mining trends, especially with assets such as Bitcoin. The profitability will be determined by the factors mentioned above, such as the type of crypto asset you choose, its yield, short-term and long-term potential. Besides this, the mining pool you choose will also make a difference.
So cloud mining can be worth it if you make an informed decision on all the above factors. After all, it reduces the expenditure by a large margin and helps you earn more profits through the same mining operations.
What do Reddit and Quora say about cloud mining? Is it worth it?
Users on Reddit and Quora have said that cloud mining can be a risky investment since numerous platforms are scams and Ponzi schemes. However, besides that, cloud mining is an excellent alternative to traditional mining since it allows people to earn more profits and even provides wider access to a mainstream audience.
Is Ethereum cloud mining worth it?
Ethereum cloud mining might not be worth it because Ethereum is already shifting towards Proof of Stake (PoS). Perhaps you can keep an eye on the latest updates, and if the yields are high enough, you can mine it for the short term.
Is Bitcoin cloud mining worth it?
Bitcoin mining is absolutely worth it if you choose the right platforms and the right mining pools. While mining the crypto asset individually wouldn’t give you rewards, a mining pool would.
Can you make money with cloud mining?
Yes. You can make money by cloud mining different kinds of cryptocurrencies. However, as mentioned earlier, it is vital to choose the right cryptocurrencies that can give you sufficient yields and are not as competitive. Furthermore, you can also set up diverse mining operations by investing in crypto assets to help you earn in the short term and long term.
Is cloud mining profitable and worth it?
Cloud mining can be profitable and worth the fees we pay to the service providers. This is simply because the expenditure will be much lesser than you mining with your own equipment so that you will earn more profits.
Furthermore, you do not have to take on the mental workload of ensuring all the hardware is working properly; there are no technical glitches or system failures while mining since they would be taken care of by your service provider.
The only thing you need is to do your research on the cloud service platform and make sure you don’t get scammed. Besides this, choose the right cryptocurrencies to mine in order to earn the highest profits.
Hektor was first introduced to Bitcoin back in 2017 when one of his clients paid him in Bitcoin. This got him curious and he started exploring services and products related to Blockchain and Cryptocurrencies. He started Bitcongress so that he could share his findings through in-depth guides on the platforms.