Cloud mining is a way to mine and earn cryptocurrencies like Bitcoin without the need of your own hardware or technical knowledge.
Companies like Hashflare already have mining rigs set up and running and sell this as a service.
These cloud mining services give anyone the opportunity to mine cryptocurrency with no prior knowledge or large up-front costs.
Cloud mining vs. crypto mining
With crypto mining, you own, operate and manage the mining equipment yourself. This requires expensive hardware, lots of electricity, and technical know-how.
With cloud mining, you can mine cryptocurrencies without owning any equipment. There are companies that own large mining facilities and sell plans to use their equipment.
One of the largest cloud mining services is Hashflare.
How do you make money?
Anyone can invest in cloud mining services but you should not blindly put money into it. You should research the cryptocurrency you will be mining just like you would research a company when buying stocks.
Most of your earnings depend on how much Bitcoin or your chosen cryptocurrency goes up in value. Thus you need an understanding of what you’re putting your money in.
How much can you make?
Your earnings depend on how much hash power you pay for and how much your cryptocurrency rises in value. Obviously, you’d want to research and mine a cryptocurrency that you think will be big in the future.
Many plans allow you to choose what’s called a hash rate, which determines how much speed and computing power you pay for.
The more hash power you have, the more of a coin you can mine and the more you’ll earn—but the more you’ll pay for your plan.
Once you choose a rate and sign up, computers will mine all day and night for you, 24 hours a day. You can even track how much you’ve mined.
Pros of cloud mining
- Anyone can mine – no technical experience required
- Completely automated, they mine for you 24 hours a day
- Low investment compared to buying your own mining rig
- Unique way to invest your money
Cons of cloud mining
- You can only choose Bitcoin and a few popular altcoins
- Still relatively expensive to buy lots of computing power
- Must pay to use their services (although it’s cheaper than buying all the hardware upfront)
How to get started
To get started sign up on Hashflare. They are one of the most popular and reputable companies in the field. Genesis Mining is another good option.
Make sure to do your research, and happy mining!
Interested in learning more how bitcoin and cryptocurrency works? Download our other app: The Crypto Degree for a free course!