Community post
Cloud Mining vs Home Mining
Many people ask what the difference is between cloud mining and home mining. Also, common questions about cloud mining is:
Why does companies sell cloud mining contracts when they can use the equipment to mine themselves?
Are all cloud mining companies scam?
Is cloud mining profitable?
Which cloud mining company is the best?
Lets answer the questions.
Cloud Mining is when you buy cloud mining equipment from a company that runs the mining rigs for you. The company collect a fee that includes electricity and maintenance fee. The rest of the mining income is yours to keep and the payouts are usually daily. This is a way for the mining companies to grow and at the same time spread the risk. It´s a very high risk to buy a lot of mining rigs for their own capital and the companies may not be s liquid. Cloud Mining is a bit comparable to buy stocks in a company with very frequent dividends. However, all cloud mining contracts has an end point.
All cloud mining companies are not scam. With that said, far from all cloud mining companies are legit. Therefore, it´s very important to be careful when you select small and unknown companies. It´s not very easy to recognize a scam but if you are unsure you shouldn't invest. Stay with the large, well-known companies that have operated for several years.
The profitability of cloud mining is very hard to predetermine. Cloud mining is dependant on several factors such as the price of the underlying cryptocurrency and the mining difficulty. Right now, in the beginning of September 2017 Dash cloud mining at Hashflare looks really good. See Allcloudminers for a discount code at Hashflare.
I think Genesis Mining, Hashflare and Hashnest are the best companies. Genesis Mining and Hashflare has cloud mining for Bitcoin, Litecoin, Ethereum, Dash and Zcash. The best contract differs from time to time. At Allcloudminers there are always an up-to-date profitability calculation for all those contracts.
Replies (7)
Thanks for the tip about allcoudminers!
http://www.allcloudminers.com/
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STOPWell I expected explanation of both not just cloud one. Why not just buy coins instead of cloud mining?
because cloud mining keeps the source of the coins anonymous. For example, you can give genesis mining a fake name and email address. The only thing legit you need to give them is a form of payment and an address to send the coins to.
Now you have a source of coins coming to you that will not be reported to the IRS.
Yes, you can buy coins instead of cloud mining. My guess is that the best opportunity for cloud mining is if the price of the coin is stable. In this case, the mining difficulty shouldn't increase too much and you would still get a yearly ROI of about 10-15% (Only a guess). If you believe the BTC/USD price will continue to rise as the latest half year you better keep your coins probably.
OK, for home mining you need to buy and maintain your equipment yourself. One important factor to consider is of course what your electricity bill is per kWh. You can always check www.coinwarz.com for general mining profitabilities. You also probably want to connect to a mining pool and there is also a mining pool fee. A mining pool is a collection of home miners that work together to solve the cryptographic problems. The rewarded Bitcoins are equally and proportional shared among the members of the mining pool. To summarize you need to understand the hardware cost, mining pool cost and electricity cost. You will receive a small amount of Bitcoin each time your pool solve the cryptographic problem for a block. Also, some mining pools distribute transaction fees (look this up).
Yes but you still have cards and you mine on top of their price which looks to me as much better deal, even so their price can drop too.