If you want to invest in Bitcoin mining, but don't want to manage the mining machine yourself, there is another option to make money by mining Bitcoin through cloud mining. What are the cloud mining pros and cons? Simplify it, cloud mining is the user's mining through the computing power running in a remote data center, and the user only needs to operate at home through a computer or mobile phone. For example, through the computing power cloud platform, one-click mining. So what the advantages and disadvantages are of cloud mining? Let’s discuss the cloud mining pros and cons today.
However, cloud mining has certain risks, and investors need to understand these cloud mining pros and cons before buying.
cloud mining pros and cons - Types of cloud mining
There are currently three forms of remote mining:
- Mining machine hosting: buy or rent mining machines from hardware suppliers, and host mining in the mine;
- Virtual mining machine hosting: buying or renting virtual mining machines on the software platform, and hosting mining on the platform;
- Cloud computing power mining: no need for physical or virtual mining machines, by purchasing the computing power contract of the cloud computing power mining platform to share the mining revenue, such as the OXBTC cloud mining platform. This is currently the most popular cloud mining method.
cloud mining pros and cons - Advantages of cloud mining
This is why you might want to consider cloud mining:
- No need to buy and maintain mining machines, simple and convenient
- A quiet, cool home, no noise
- Electricity is relatively low, reducing mining costs
Disadvantages of cloud mining
This is why you may not consider cloud mining:
- Not that interesting (if you are a person who likes to toss by yourself)
- Reduced profits (the operator has additional operating costs after all)
- Contract warning (mining business may be stopped, depending on the currency price)
cloud mining pros and cons - How to determine profitability
The computing power contract of the cloud mining platform generally provides the estimated number of coins produced per day, electricity costs, management fees, quarterly power outage risks, etc. Estimated daily income = estimated daily output currency \* current currency price-daily expenditure (electricity and management fees and other expenses).
Hashrate Cloud updates the estimated mining revenue in real-time
Some platforms do not charge management fees but only charge basic electricity fees. Therefore, the daily expenditure only needs to subtract the electricity fee, and the return on investment is higher.
If the platform does not provide an estimate of the number of coins produced per day, you can consult customer service or roughly estimate it through the currency's income calculator. For example, the Bitcoin hash rate contract can be used to calculate the revenue through the ant pool revenue calculator.
Bitcoin earnings calculator
What is easy to overlook is that investors tend to ignore opportunity costs when calculating costs. For example, if a user invests 10,000 to buy cloud computing power, we often only include 10,000 + daily electricity bills and other expenses in the cost, and will not include about 1 yuan of the daily income of Alipay if the 10,000 yuan is deposited in the cost.
In contrast, non-speculative mid-to-long-term investments and investments in downturns should pay more attention to this opportunity cost.
cloud mining pros and cons - Risk and reward
There are risks involved in any type of cryptocurrency mining, but if you invest carefully rather than speculate and beware of risks, the probability of profit will greatly exceed the loss.
The risk you will see is that through calculations, the cloud computing power you buy will be profitable within a few months. However, as the difficulty of mining increases, it may be between four and six if the currency price remains unchanged. Start to lose money for a month or even longer.
In addition, some new currencies or so-called opaque so-called innovative mining methods often have falsely high initial currency prices or returns, and they will plummet after attracting a large number of users.
The most worrying thing is that the risks of fraud and mismanagement still exist in the field of cloud mining, and once they happen, they will lose their money. But often this kind of unreliable platform has the greatest temptation to users in the early stage, and early users may be able to take advantage of the opportunity to profit.
Therefore, cloud mining pros and cons are often proportional. Speculative users can consider rewarding platforms or new currencies that are inflated, innovative mining methods, squeezing a burst of wool, and changing positions. Or simply copy money.
For investment users, mining is the best way to invest. Just look for the right platform. The cost of mining coins is definitely lower than the market price. In addition, try to choose Bitcoin. First, Bitcoin price fluctuations are relatively small, which can reduce the risk of loss caused by currency price fluctuations; Second, the mining cost of Bitcoin is relatively more price-supportive, even as the difficulty of mining increases, The probability that the mining cost is higher than the current price is also small.
As mentioned above, if you can accept these cloud mining pros and cons and choose carefully, it is a good choice to invest in cryptocurrency through cloud mining.