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We’ve been talking about cryptocurrencies and how to invest in them. We’ve also talked about exchanges and wallets. But, did you know you can acquire digital coins through mining? Yes, you can mine cryptocurrencies such as Bitcoin, Litecoin, and others. While it is not the actual physical work you have in mind, it still will require that you have some specialized hardware. You won’t have to buy a pick and a shovel or dig any tunnels though.
What is Cloud Mining?
With cloud mining, you’ll mine at the comfort of your home without the fuss in handling hardware and machinery. Cloud or remote mining is a process in which you rent or hire mining hardware to mine digital currencies remotely. As the difficulty in mining continues increasing, it has pushed the costs of mining too high due to high electricity costs and the need for more specialized hardware.
Cloud mining seeks to solve this problem by enabling you to use your own computer at home and use a remote data center that has shared processing power. You simply hire or rent this computing power from the remote location. You won’t need to manage any specialized hardware. Anyone even those without the technical knowledge of the mining hardware can take advantage of this technology. It is, however, important that you understand the basics of crypto mining.
Is Cloud Mining a Scam?
In cloud mining, you are sold hash power for a given period of time. This hash power can be profitable if the price of the coin you are buying rises in value, but in most cases, it is a scam, so you have to be careful. If you see any website offering absurd returns on investments, that website is more likely to be a cloud mining scam. Here are some aspects you should consider before investing in these websites.
There is a reason why there are so many crypto forums online, nowadays. As mining becomes more difficult with time, cloud mining has attracted a lot of attention in an attempt to reduce costs. If you want to identify some of the best cloud mining platforms, then join forums and follow reviews. You will know where not to put your money and where to invest.
Most cloud mining websites are very crafty. They will register their companies in reputable cities like London to create a sense of prestige but have foreign identities. In most cases, they incorporate a fake email and a dysfunctional chat. Any attempts to contact them for information is met with cold shoulders, especially if you have already invested. If you find one that is transparent and responds promptly to your queries, you may give it a try, but don’t invest more than you’d be willing to lose.
Mining sites give you a contract to run for a given period of time. You pay a given amount of money to earn a specific fixed amount for a fixed period. The remote data centers take a part of your income to pay their electricity bills and to maintain their equipment. A few legit sites charge withdrawal fees anytime you want to withdraw money from the sites eating into your profits.
You need to check the contact information and business addresses. If you cannot verify these, then that particular company is a fraud. Most of these scams have scanty information that you cannot pinpoint their area of operation. They also encrypt their code to prevent you from getting any information on their location.
Most cloud mining websites will not pay you anything. If you put your money in them, it will not get lost most probably. Some of them pay interest but it is usually very minimal and is paid after a very long time period. A few that pay start issuing interest after almost six months. If you see a website promising you immediate returns, then run for dear life. Don’t even bother trying it. The nature of coin mining does not permit immediately.
Investing in a cloud mining company requires you to buy hash power for a given period of time. It could be six months or one year. Some claim to offer unlimited time. It is this period when you utilize the hashing power that is referred to as a contract. There is no one best cloud miner out there that can control mining computing power.
Is Cloud Mining Profitable?
Cloud miners promise would-be investors or victims that they can get free coins or earn handsome interests through cloud mining. The allure of free and easy money draws a lot of unsuspecting individuals to put their money in these sites. The truth is, most cloud mining sites has never been profitable and is not about to be. If you want to calculate the amount of interest you will be getting from your investment, some websites have cloud mining calculator that you enter relevant data for it to calculate for you the rate of return of your investment. Here are a few reasons why cloud mining is unprofitable;
- The cost of running and maintaining the mining software and hardware is too high.
- Miners have to take a considerable amount of your money to cover these costs and remain with some profit
- The hashing rate or the computer mining power increases with increase in mining difficulty making. Hashing rate is the computing power used to solve the cryptographic problems involved in mining digital coins.
- The payouts are usually very little and take time to mature in the few legit sites. A payout is the interest you get from investing in one of these websites.
- Cloud mining websites are always the first to go down any time a coin collapses. In 2015 when Bitcoin went down temporarily, most cloud mining websites disappeared with people’s money.
If you want some bitcoins, you’d be better off buying them from an exchange rather than trying to mine them. Bitcoin cloud mining is especially very unprofitable considering that the mining difficulty has significantly increased over time.
Check out our bitcoin buying guide for a comprehensive, easy and detailed process of buying these coins.
Best Cloud Mining
We cannot conclusively say that there are good cloud mining websites considering the nature of these websites, but here are a few you can consider. Ensure that you carry out due diligence before investing in them.
This one costs $19 for 100 GH/s and it’s a lifetime contract.
- Platinum Contract
A lifetime contract that cost $340 for 2,000 GH/s
- Diamond Contract
A lifetime contract that cost $1,600 for 10,000 GH/s
- Genesis mining has started in 2013.
- You can transfer payments from one coin to another.
- 48 hours wait for an initial payout.
- They have open-ended contracts. When mining becomes unprofitable, they push the payout to zero to avoid incurring expenses.
- When your contract is unprofitable, they hold it for 60 days at zero payouts. If it does not revive, they close the contract.
- Promises a 100% uptime guarantee.
- Promises lifetime contracts.
- It is transparent.
- There address is available and their mining farms are in Reykjavik, Iceland.
- The website allows you to monitor all your coins in a single interface.
- It is registered with SEC (Security and Exchange Commission).
Despite these promising provisions, there have been a lot of complaints online about Genesis. Clients claim that it can take you more than six months to get back your initial investment. Even then, the payout is too little and you may need more hashing power. The need for more hashing power makes your investment worthless, leading to the cancellation of your contract, but at least it pays out some interest. Be warned though that the initial investment is non-refundable.
This mining platform was developed by the HashCoins team in 2013, led by Sergei Potapenko. This team has more than four years of experience in the mining industry. It is based Talin, Estonia. For me, they are the most legit cloud mining option.
- They are open and transparent. They share information on social media websites such as Instagram. Check their page @hashcoins.
- They have a working address for any queries.
- They have provided pictures of their data center for more transparency.
- It starts mining immediately your payment is confirmed.
- Payouts take only 24 hours.
- You can monitor your transaction at any time, in any location on one interface.
- There are instant withdrawals, and the fees are fixed.
- All transactions are evident to the investors hence no risk of hidden fees.
- Low maintenance fees.
- It has an allocation for pool mining.
Their hash mining powers are some of the most expensive in this industry. Note that though this company is legit, and provides as much information as possible, it is not a guarantee that you profit when you invest in it. It is important that you understand how to spread your risk.
- SHA-256 plan for $20
- Ethash Plan for $19
- Scrypt plan for $35.
The platform has scanty information online, but here is what we’ve gathered so far
- It offers 2-year contracts but plans to extend their duration this year (2018).
- Their investments begin from $19, and they have an affiliate program which gives a discount of 15%.
- They have 99.9% uptime guarantee.
- They claim to have a 24/7 customer support, but their live chat seems not to be working.
There are mixed reactions regarding this mining platform. A few people claim that it is working fine for them, while others claim it is a scam. Take some time and get more information before you decide to put your money here.
List of Cloud Mining Companies:
to sum up…
Always take precaution when investing online. There are more scams than there are legit websites. You should take it slow and save your money than be greedy and lose it all.
Thank you for reading this guide, we invite you for more on our website.