Mining cryptocurrencies can be technical, especially setting up and maintaining your own mining rig. But there is an option, where the cost of buying the latest mining equipment and all the technical and hard work is handed over to someone else.
The cost of laying out for the latest mining rigs is north of $2500, but as well as this mining profitability takes in a few other factors, including electricity costs.
Cloud mining is mining cryptocurrencies via a remote mining farm, in which you rent hashpower from them to mine your favourite cryptocurrency. You don’t have to buy any mining rigs, and the farms are usually set up in areas with cheap electricity.
All you need to do is decide which contract is most profitable for you, sign and pay for the agreed contract and you will start mining immediately. There’s no need to purchase any expensive equipment or anything, all of that is taken care for you by the mining farm running the service.
The contract can be basically any length of time, depending on the terms to suit you. Different cloud mining companies offer different terms, but you can generally gear the contract to suit your time frame.
Additionally, the user can decide on the amount of hashrate they would like to rent. The more hashrate you want, the more expensive the terms, but also the more you will get in return form the block reward.
Always DYOR as There Are Many Scams
It’s important to note that cloud-mining services have a bad reputation. This is due to the many scams out there, and the fact that the space is unregulated. That said, however, there are some legitimate cloud mining companies, but always do as much research as possible to make sure you’re not getting involved in a risky contract.
Things you should look for include:
Ponzi schemes. Sure enough, there are ponzi schemes within the cloud mining space, and any company offering the only way to make money is by getting as many members as possible, is a ponzi, so stay away.
Reviews are something you should look for, too. Of course, customer reviews are important, but remember these can be bought reviews. So if a company has 99.9% excellent reviews, you should smell a rat. And remember, even the best companies will have bad reviews, so decide if the percentage of good/bad reviews seem realistic and worthwhile.
How long have they been in business? Is it a new company? New companies might be legitimate, but let others do the testing before you jump in with a new company.
What contracts do they offer? Is it only for questionable cryptocurrencies? Are they only long term contracts? Are they offering much more than their competitors?
Question everything. Contact the company and if they answer all your questions and have good customer relations, they’re more likely a respectable company.
Always remember that investing in any cryptocurrency firm is risky. There are no guarantees in anything, and the cryptocurrency space is in its infancy, and things could go wrong, even with Bitcoin.
Is Cloud Mining Profitable in 2020?
It depends on several things, but mainly the value of the cryptocurrency you’re intending to mine. Most people mine Bitcoin and for ease of purpose I’ll discuss Bitcoin.
Mining Bitcoin is profitable because every new block added to the blockchain is rewarded with 12.5 BTC. This is what incentivises miners to mine Bitcoin, and in turn it secures the network.
After every 210,000 blocks, however, the mining reward decreases by 50%. This event is hard-coded into the Bitcoin protocol and is commonly known as the Bitcoin Halving (or halvening) event. The next halving is due in May 2020.
This cut in reward is critical to mining profitability because they will take a 50% cut in BTC, and without taking the USD equivalent into account, it is a big drop. That said, however, with the supply being cut it is expected that demand will encourage a rise in price.
After the halving, to be competitive in mining you will most definitely need the latest mining rigs. With cloud mining, however, you will have the same hashpower as you have always had, and being part of a farm that is competitive ensures you will remain as competitive as before the halving.
Recommended Cloud Mining Services
IQ Mining is a cloud mining company, launched in 2016, and based out of the Seychelles.
It has a good reputation in the cloud mining space and offers five types of cloud mining algorithms: SHA-256, SHA-256 Pro Mining, SHA-256 Bitcoin Cash, Ethereum, and USDT Stablecoin Mining.
It has a helpful contract calculator so you can work out the cost of the contract you would like for the hashpower you would like. The have an online chat service which is also helpful.
There are Bronze, Silver, Gold and Diamond memberships, but it all depends on how much you want to invest, but it’s an easy to understand interface and the signing up is simple too.
Genesis Mining is a cloud mining company incorporated in the British Virgin Islands with the farm based in Iceland. It has been in operation since 2014 and it uses the geothermal energy options that make Iceland’s energy so competitive.
They have cut back on their cryptocurrencies of choice and now only offer Bitcoin and Dash to mine.
They many have different contract plans from Gold, Platinum and Diamond, to a Custom Plan in which you can specify the exact hashpower and length of time.
They have arguably the most professional set up and are continuously expanding their technology, whether that is the mining equipment or the Genesis Hive that ensures the smooth running of the Genesis cloud mining facility.
The Crypto Universe cloud mining facility was launched in 2018 and is registered in Estonia, which is arguably the most crypto friendly nation in Europe. And with its mining farms situated in Russia, Crypto Universe can ensure cheap electricity.
Crypto Universe offers two types of contracts from Promo to pro and all contracts are preset. The Pro contract claims that for 720 days, you will earn $12.17 a day for an investment of $1550 (at today’s prices).
Mining Bitcoin and other cryptocurrecnies can be difficult, but if the value of the coin is high enough, it can also be very profitable.
Cloud mining takes all the technical difficulties away and makes mining cryptocurrencies much more accessible.
It’s not an easy way to make money, however. It all depends on a few factors. As with all contracts, if your aim is to earn as much USD as possible, it depends on the value of the cryptocurrency you choose to mine.
Always take into consideration the halving. It is coded into many cryptocurrencies, and it will affect your profits. The price is likely to figure itself out eventually, but you might miss out on USD value for a bit.
Although, if cryptocurrency is your reward, you will always make a profit, and if you bide your time, you could make a lot of USD profit.
Author: Tommy Limpitlaw