What is Cloud Mining in Cryptocurrency?
Cloud mining is a way of mining cryptocurrencies such as Bitcoin using rented cloud computing power. In this arrangement, users don’t have to install or operate gear to mine crypto assets, saving them valuable maintenance time or dealing with regularly high electricity costs.
Cloud miners leverage cloud computing to mine valuable crypto assets and directly decentralize the network, making them more robust. In essence, cloud computing, more generally, is one of the fastest-growing technology trends wherein computing services such as processing, server capacity, database services, software, and file storage are accessed via the cloud.
Meanwhile, cryptocurrency mining is the heart of proof-of-work networks like Bitcoin. Crypto mining is the process by which transactions are verified and added to the public ledger, known as the blockchain while miners are rewarded with block rewards. Through cloud mining and computing, people across the world, with little or no technical experience can participate, further helping drive adoption.
Cloud Mining Firms
Cloud mining firms allow people to open an account and remotely participate in the process of cryptocurrency mining for a basic cost, making mining accessible to a broader number of people across the world. Such companies charge on usage, just like payment is made on common utilities like water or electricity.
Major Advantage of Cloud Mining
Cloud mining is done virtually and thus, users are saved from maintenance and energy costs. Additionally, because there are no demands, more people tend to participate, empowering cloud mining operators to double down on gear and deployment of hash power to secure the base layer.
What Cloud Mining Process Entails
In cloud mining operations, participants automatically join a pool and receive block rewards depending on their hash power. As expected, the higher the amount of hash rate hired, the more the rewards the user would likely receive.
How Cryptocurrency Mining Works
Mining for cryptocurrencies such as Bitcoin, whether via the cloud or locally, is resource intensive.
While this process is rewarding to miners, it serves a much more crucial purpose of securing the underlying blockchain and upholding the integrity of the network.
Bitcoin mining is done by high-powered computers that solve complex computational math problems whose difficulty increases as more miners join. Whenever miners add a block of transaction to the blockchain, thus verifying that all are valid, they receive block rewards.In particular, Bitcoin miners make sure that there is no double-spending that can jeopardize the integrity of the network.
With printed fiat currencies, counterfeiting is always an issue. Once spent it can be difficult to track them. However, in crypto, this is different. The miners use their computational powers to solve cryptographic puzzles that prevent double-spending in a decentralized manner.
How to Identify a Legit Cloud Mining Site
While most cloud mining sites are a scam, some are legit gauged on profitability, pricing, and pay-outs. However, before subscribing, the rule of thumb is to not to sink all your money before doing your due diligence. Always trial them first.
