How is cloud mining different from traditional mining?

10 000 question challengeCategory: Profits (trading, ICO, mining)How is cloud mining different from traditional mining?
HowToToken Team Staff asked 3 years ago
1 Answers
HowToToken Team Staff answered 3 years ago

“The main difference between traditional Bitcoin mining and cloud mining lies in who houses and maintains the Bitcoin mining hardware. With traditional Bitcoin mining, the user buys, sets up and maintains the Bitcoin mining rigs. This requires extensive technical knowledge as well as adequate ventilation for cooling and will result in an increase in electricity costs. On the other hand, with Bitcoin cloud mining, the Bitcoin mining rigs are housed and maintained in a facility owned by the Bitcoin mining company. The customer simply needs to register an account and purchase Bitcoin mining contracts or shares. These Bitcoin mining contracts immediately start mining Bitcoin which is paid out to the user on a regular basis. The user does not have to concern himself with ordering, setting up or maintaining Bitcoin mining hardware. Nor is the user required to make a big up front Bitcoin mining investment. For as little as fifty dollars, he can begin cloud mining. From that point on the Bitcoin mining hardware housed at the Bitcoin mining company will do the work.”

Paul Ring, a journalist and a user of Quora, marks these pros and cons of cloud mining:

• No added electricity costs
• No equipment to sell when mining ceases to be profitable
• No ventilation problems with hot equipment
• Reduced chance of being let down by mining equipment suppliers.

• Risk of fraud
• Opaque mining operations
• Lower profits
• Lack of control and flexibility

Bitcoin Cloud Mining Explained