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Cloud Mining Explained

Bitcoin Cloud Mining explained properly, for beginners. Bitcoin cloud mining requires no equipment or technical knowledge. As a result, cloud mining has opened up Bitcoin mining opportunities to a wider audience.

With cloud mining anyone can mine Bitcoins and potentially profit. Here we will provide an explanation of cloud mining. This builds on our earlier post about bitcoin mining, here

Bitcoin Cloud Mining Explained

In bitcoin cloud mining, the equipment is bought and maintained by a specialist mining company. There is extensive, specialist knowledge required to maintain bitcoin mining rigs. So this is centrally managed.

A cloud mining client simply opens an account online and purchases shares in cloud mining contracts. The income from the user’s share of the mining power is paid to them directly. There is no capital outlay required by the cloud mining client. So, for as little as USD 50, an investor can start mining.

Bitcoin cloud mining profitability issues

There are key issues to consider before purchasing cloud mining contracts.

These are similar to the considerations for any other investment. Firstly, how reliable and reputable is the contract provider? And how secure are your funds?

Once you are satisfied as to the reputation and security of the provider, you should consider the price of their cloud mining contracts. Prices do vary. If they are too high, then there is no way to make a return, within a decent time period.

Another factor to consider is the mining difficulty on the bitcoin network. While an individual provider of mining contracts has no control over this, it will directly affect your chances of profitability.

— Bitcoin (@Bitcoin) 10 July 2015

Good mining calculators can provide an estimate. Of course, future mining difficulty can never be known, only estimated.

The final factor that will impact your profitability, is the future bitcoin price. Again, this is an unknown variable.

Some services even let you trade your mining power as a commodity itself. So if you purchase 10 GHS of mining power, for example, you can trade that freely for Bitcoin, USD, etc., on excchange.

If you have an interest in Bitcoin, believe in its future potential, and have some interest in the mining part of the economy, then cloud mining is a good place to start.

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