How Does Cloud Mining Bitcoin Work? If you want to invest in bitcoin mining without the hassle of managing your own hardware, there is an alternative. You can use the cloud to earn your coins. One only needs a home bitcoin mining service for communications, optional local bitcoin wallets and so on.
However, there are certain risks associated with cloud mining that investors need to understand prior to purchase. Reduced chance of being let down by mining equipment suppliers. Lease a mining machine that is hosted by the provider. Lease an amount of hashing power, without having a dedicated physical or virtual computer. This is, by far, the most popular method of cloud mining.
Even so, you can still use these calculators by thinking clearly about the costs involved. Effectively, you are being asked for your ongoing costs and your one-off investments. Therefore, since the provider, not you, is paying the electricity bills, you can enter the monthly mining bill in place of the electricity cost. The conversion process isn’t completely straightforward, though.
Hence, you need to calculate an equivalent cost per kilowatt hour to feed into the mining calculator. In your test calculations, you will likely see that some cloud mining services will be profitable for a few months, but, as the difficulty level of bitcoin increases, you would probably start to make a loss in four to six months and beyond. A possible remedy to this situation is to reinvest what you have made into maintaining a competitive hashing rate, but this is highly speculative. As mentioned above, the risk of fraud and mismanagement is all too common in the cloud mining space. Investigate social media channels, speak with former customers and ask pointed questions of operators prior to investing. Ultimately, you should practice the same kind of due diligence that you would for any investment. Disclaimer: This article should not be viewed as an endorsement of any of the services mentioned.
Please do your own research before considering investing any funds via these services. What Can You Buy with Bitcoin? What are pools how and how to join them? How to Calculate Mining Profitability Can you make a ROI?
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