Cloud mining is becoming an alternative to pool mining now when setting up your own digital coin farm has become too expensive for most potential investors. The premise is that the investor doesn’t need to set up their own mining facility. Instead, the process is outsourced and done in a cloud.
This also means that the profits will be smaller since you’ll end up paying a fee that will take a big chunk of what you would otherwise earn. However, without an initial investment, you can start earning from cloud mining right away.
How to Choose a Cloud Mining Provider?
There are a lot of providers out there offering these services. The two largest ones dominate the market, but there are plenty of small ones to choose from as well. Review sites such as Truely allow you to compare and contrast the offers available.
A few main features stand out when it comes to choosing a cloud mining company. You want to inquire about the hash rates used as well as about their ability to terminate the contract on you before the coins are mined.
What Kind of Profits to Expect?
There’s no simple way to answer this since it depends on the type of contract you have and the hash rates you’re paying for. If you decide on the standard contract that will cost you about $5000 upfront, you’ll end up making $600 a month.
This means that you can earn about $7200 a year from the cloud mining contract. When deciding if this is a little or a lot, you should take into account how much you would have earned from your own mining farm, and how much the farm itself would cost.
It’s A Form Of Passive Income
It’s also important to take into account that investing in cloud mining is passive income. Once you’ve set up a payment system and paid your fees, there’s nothing more for you to do as an investor. You can follow along and watch your cloud mining income rise until you’re ready to withdraw it.
There’s value in the fact that you can earn while being focused on other projects, and that you get to be a part of this innovative new industry without having to do anything. Even if you earn less than you would for some project that requires your participation – the value of the passive income source is more useful.
The Process is Straightforward
The process involved in creating and maintaining the account for cloud mining investing is simple enough and can be done by a complete novice. It starts with setting up an account and a password as you would with any other online tool.
Next, you need to set up a payment method and cover your fees. This can be done in cryptocurrency but it doesn’t have to be. After that, all you need to do is to follow how the investment is going on your dashboard.
No Heating or Noise Issues
Cloud mining facilities use a lot of gear and this means that they produce a lot of heat and noise as well. This is a burden to the environment and to your surroundings. That’s why most of these facilities need to be set up somewhere far away from the populated areas.
Those who invest in cloud mining don’t have to worry about any of these issues since they are handled by the provider. The cost of it is included in your fees and given how much work maintaining the equipment requires, it’s a fair deal.
Tax and Legal Issues
Cryptocurrency is relatively new but the attitude the governments have toward it has changed in recent years. At first, there were no regulations whatsoever and the tax authorities weren’t aware of it. This isn’t the case these days and you’ll need to be prepared for tax and account issues.
With cloud mining services, this part of the process is covered by the provider. That’s part of the service you’re paying for when setting up the account. It makes things much easier for small and mid-size investors that don’t have the resources to do so on their own.
There’s Fun to Be Had in Setting up a Mining Facility
If someone else is running the whole mining operation there’s very little for you to do. Many investors go into mining because of the tech and the gadgets that are on the cutting edge of the industry. Leaving that part of the process to someone else is no fun at all.
For those who are interested in the tech side of things, using cloud mining is a worse option. However, if you’re in it for the profit and the process isn’t of interest – it’s a lucrative investment to consider.
How Can the Contract Be Terminated?
The cloud mining provider is allowed to terminate your contract before you’ve mined the agreed amount of coins. This happens when the cryptocurrency loses its value and the process is no longer financially lucrative for them. However, the contract also covers payouts in case this happens.
These won’t be as much as you would have earned if the contract was completed but they do mean that you’ll get something out of the contract anywhere. Make sure you’re familiar with these details before signing up.
Should You Do It?
There are numerous benefits of investing in cloud mining. This is an especially good option for those who can’t afford to set up their own mining facilities or are unfamiliar with the gear involved. The cost of gear and the complexity of maintenance is increasing all the time, but there are more investors interested in getting a head start in cryptocurrency.
If the gear and running the farm is the main reason you wanted to try crypto mining in the first place – this isn’t an option for you. The investors aren’t involved with the process at all and most of it is outsourced. It can be a lucrative investment, however.