Cloud mining has come of age. Today you can operate from the comfort of your home, without having to invest in a huge data center and still mine Bitcoin or other alternative currencies. Yet like traditional mining operations, there are investments to be made in order to reap rewards. So where is cloud mining headed?
The Ins and Outs of Cloud Mining
Cloud mining, sometimes called remote mining, is just the same as mining cryptocurrencies, but without needing to invest in hardware yourself. Think of it as piggybacking on professional-grade remote hardware provided by a cloud mining services provider. You could mine Bitcoin or other altcoins like Litecoin or Ethereum.
Essentially, cloud mining is a service that you pay for and in return you get “hashing power” hosted in data centers and sold in Gigahash/seconds (GH/s). As a buyer, you will select the desired amount of GH/s and a period of contract you would like to mine for.
No requirement for investment
There are many reasons to consider cloud mining. The principle reason being that there is no requirement for any investment in mining hardware. Cloud mining is fully scalable, this means that you can buy the capacity you want based on your own needs and ambitions. There are fixed maintenance and electricity costs and novices who have never mined before can wet their feet before taking a full on plunge into mining on their own.
Cost of entry smaller
The costs of entry into cloud mining are significantly smaller than starting a full-on mining setup of your own. Hashflare, for example, offers a 10 GH/s plan with unlimited contract for as low as $ 2.20. Miners should keep in mind that since there are costs to be borne by the cloud mining company, the profitability of cloud mining is significantly lower than doing it on your own. Edgar Bers of Hashflare.io spoke to Cointelegraph and said:
“Cloud mining is a profitable pursuit if you know what you are doing. While many cloud mining services provide different mining options, not all of them are the best choice, obviously. The market of mining is very dynamic in general, so you should most probably learn something in the Internet about different options before making a considerable investment. Usually people tend to ignore open information like mining difficulty growth or currency value changes and they get very frustrated once mining becomes less profitable.”
However, there are cloud mining companies that allow you to choose your own mining pool, which can increase overall profitability.
Altcoin Cloud Mining
While Bitcoin mining has been around for a while, there is a lot of excitement in the altcoin space. David Mondrus, Owner of FreeMasonStore.com and a former Senior Consultant at IBM, is of the view that “Altcoin mining is/will be a very interesting space. Whether it'll be profitable or not on a consistent basis remains to be seen.”
Edgar Bers of Hashflare chimes in:
“The issue with altcoins is the fact that there are plenty of them, but most of them are useless. Everyone can create a crypto currency, it’s not hard, but what many of them lack is the actual technology. While Bitcoin blockchain is good for money transactions but is practically useless in other fields, Ethereum is a technologically competitive altcoin with serious blockchain capabilities. In reality, only few altcoins are really worth investing and mining (no names, I don’t want people to start investing into something because somebody has said so in the Internet). When we think of adding new currencies to the system of ours, we always think twice whether should we be doing this and what could be positive and negative outcomes for both us as a company and our users, without whom HashFlare would also not exist. I think that we might see a couple of good and fresh altcoins in 2016 which could be worth investing into, but there should be technology in the first place, not just another worthless coin which will never grow up and beyond its developer’s imagination.”
Clearly there is change in the way mining is being done and with small individual miners again getting a chance to own a bit of action in the cryptocurrency world, without having to make substantial investments. The market is maturing due to the presence of reliable providers but also because of increased opportunities provided by altcoin mining. Cloud mining has definitely arrived on the stage.