Cloud mining is a pretty interesting phenomenon appeared on the Internet. Many enthusiastic people combined their power to extract Bitcoins with a greater speed and efficiency. Lately, they started offering their hardware to those who had no finances and time to own a cryptocurrency farm. So, it is a kind of rent.
Sure, it costs some real money for both customers and owners. How does it work? You simply pay a website and it produces bitcoin bonus for you.
Features of Bitcoin Mining
At the beginning of cryptocurrency era, the mining process was a thousand times easier than now.
PC CPU was enough to extract coins. Later, when this became more complicated, it was reasonable to use GPU and even ASIC (a specialized device exactly for mining).
These appliances cost a lot of money. For instance, ASICs of high quality can be around $10,000. Sure, you can find much cheaper variants, however, their power may be doubtful. It is a product that has to serve for a long period of time without flaws.
Other expenses concern electricity. A powerful single graphics card devours around 230W/h plus your PC which consumes about 150W/h. Remember that you have to hold at least five or six video cards. And again, they must work for the whole day, if you want to make all this stuff pay-your-way.
So, as a result, the approximate daily consumption is around 36.7kW. Customized IC consume from 0.09 to 5W, on an average. So, it will be 3.6kW per day. Plus you should include potential spending in the event that some of your farm components break down.
Bitcoin as the currency and at the same time as the system is the self-regulating mechanism. The number of BTC cannot be higher than 21 million. The extracting of the digital money speed is regulated due to the mining difficulty. After every 2016 blocks are reached, it becomes more complicated to produce, or it is better to say, to find coins.
This parameter changes every two weeks, as the computing power of mining devices increases as well.
Such rules allow users to carry on their activity right until 2141. By this date, every single Satoshi will be found. Nobody knows what will be afterward. Perhaps it will be an era of other digital cash.
The efficiency of finding new coins is measured in hashes per second. It is a unique composition of numbers that actually unlocks new Bitcoin block. At the same time, it is a mathematical task which is resolved by your mining device.
The computing power of your equipment means the number of such tasks solved per each second. 10Gh/s means your hardware can do 10,000,000,000 calculations every single moment.
Is Cloud Mining Just A Ponzi Scheme?
It is a perfect ground for numerous scammers. Many websites offer attractive returns and reasonable deposits. However, we cannot be sure that the service will not suddenly close, nullifying all the customers’ funds. Just imagine a situation you invested $3,000 in an annual contract. So, your contribution should bring you income after several months. Dealing with such companies always means long-time investments.
But one day you find this website has been deleted. Your real money is gone. It is a typical situation.
Why does it actually happen? Unfair organizations use the money of freshly registered clients and then give it back to old customers. In other words, frauds do not produce Bitcoins; they do not even need to hold the computing hardware. They just direct some money flow from one person to another.
Get Profit by Following Rules
It may seem that scam is everywhere. It is somewhat true. However, following our tips, you will make a profit from cloud mining. The main point is to choose the right website. It is worth to make an investigation before making any investments in a target enterprise.
Track Forums for References
First of all, you have to test the waters. Visit related forums, discover the users’ feedbacks. It’s easy to find info about well-known providers.
What if there is no clear information about the site you want to use? It is very likely to be fraud. Narrow your investigations to long-lived and big companies. As a rule, scammers do not exist long while.
Check the Hardware Developers
Please check if the company produces mining hardware. If yes, then you will have more chances to succeed in obtaining Bitcoins. It means that its owners have not only a website but also a real computing power to share. So, it is a positive sign for you as an investor.
Invest Only Affordable Funds
Here we have the same principle as in the lottery. It means that despite all the info you have about a company of interest, it can turn out swindle. So, never deposit the cash amount that you are not ready to lose. Do not invest so much, as a website, by all means, will return you a small portion of BTC. Keep in mind that you will need to buy higher hash rates because of constantly increasing Bitcoin difficulty.