Other than buying and selling, another way to make money with Bitcoin is by mining. Unfortunately, mining opportunities are getting scarce. That’s because, GPU prices and electricity costs have made it almost impossible to make money from small-time mining farms.
But entrepreneurs have maneuvered around this problem through cloud mining. So what exactly is cloud mining? Cloud mining entails buying capacity in data centers in locations where mining costs are lower.
How to use cloud mining to mine crypto currency
Through mining pools, individuals who do not have access to massive supercomputers can profit from bitcoin mining through hashing contracts. Mining pools out give investors a chance to either buy annual mining contracts or lifetime contracts depending on their needs.
So what are the advantages of cloud mining compared to conventional bitcoin mining? If you are looking to join a pooled cloud mine, you can expect the following advantages.
For starters, you do not incur any electricity costs that come with the mining process. Bitcoin mining is an electricity-intensive process. Thankfully, through cloud mining, you get to earn bitcoins without having to deal with the electricity costs that come with the mining process.
Another advantage of cloud mining is that you do not bear the risks of getting stuck with obsolete mining equipment. Bitcoin mining equipment does not come cheap, and as mining gets more difficult, these equipment can quickly become obsolete and unprofitable to use. This is an issue that a pool cloud bitcoin miner does not have to deal with. If the pool you join stops giving sustainable returns, you have the flexibility to join another pool with no risk to your capital.
How to join cloud mining pool
By joining cloud mining pool, you also save yourself from the hassle of having to deal with heat and ventilation issues that plague physical bitcoin mines. The mining process is so energy intensive that heat and ventilation become a challenge to miners, who do not have the financial capacity to install expensive fans and other ventilation equipment.
Joining a cloud mining pool sounds like a great idea, right? Well, that’s because it is. It gives you the chance to earn passive income throughout the lifetime of the contract. Some mining pools give you a chance to earn up to 20% per annum throughout the life of the contract. That’s a return on investment that is not easy to match in many other investment options out there.
Cloud Mining Pool – Scam or legit thing?
However, before you put all your life savings in a mining pool, you need to understand that there are some risks involved. One of the biggest risks to joining a cloud mining pool is that many of them are scams. Many websites posing as cloud mining pools are pyramid schemes that will close shop as soon as you put in your money. There is also the fact that over time, mining fees increase to the extent that the returns do not make sense from an investment perspective.
All-in-all, mining cloud pools are an easy and efficient way to get into the business of mining bitcoin. Just do some due diligence on the mining pools that you commit your money in, and you are good to go.