Cloud mining is an investment in companies that perform mining as a business. If you have an interest in mining virtual currency, you may have a potential interest in cloud mining. However, since it is a new service, there is little information.
There are many parts that are difficult to understand, such as the mechanism and features. Here, we will introduce the mechanism and advantages and disadvantages of cloud mining while reviewing the basics of virtual currency and mining.
Before explaining cloud mining, let’s review the meaning of virtual currency.
What is virtual currency?
There is some confusion of virtual currency, or cryptocurrency, with electronic money; however, they are completely different. Here’s how they differ:
Cryptocurrency is a currency that is issued only by data sources other than the government and central banks.
Electronic money refers to legal tender currency (yen) converted to data. The same applies to points issued by companies.
Virtual currency using a technology called blockchain is issued and managed by the program. It is a system that gradually permits calculation processing and transactions to be approved by PCs and smartphones worldwide that use virtual currency. This is called “distributed ledger technology”.
How to make a profit with virtual currency
Physical transactions of virtual currency should be quite simple: buy low, sell high.
Make the most of the virtual currency trading systems. Don’t be afraid to buy low to expand your holdings. At the same time, don’t be afraid to sell high in order to grow your available funds for trading.
Be sure to be gain knowledge about the development of cryptocurrency blockchain systems, similar to that of Ethereum.
Make the most out of your mining dollar. Each mining block for minable cryptocurrencies often has rewards. This is in addition to the proceeds you make from mining.
And cloud mining, which is the theme of this time, is a type of mining.
What does “mining” mean?
Mechanism of mining
Mining is a system in which virtual currency is obtained as a reward instead of performing the “approval work” required for virtual currency blockchain technology. To perform mining, connect a mining machine (a terminal that is almost the same as a PC) to the Internet, and use the software dedicated to mining to automatically perform approval work.
Distribution of mining rewards doesn’t go to all users performing the approval work. In the case of Bitcoin, the person who has the earliest calculation process among participants will receive the award. The processing speed depends on the performance of the mining machine, so in order to get rewards for mining; you will need technical skills and the financial resources to purchase high-performance parts.
To start mining, it is ideal to use a dedicated machine with integrated circuits called ASIC. However, you can also assemble it using the same parts as a general computer. Know Bitcoin features to get maximum profit in a small interval of time.
What is cloud mining?
Cloud mining is a business that invests in companies that are trying to make a profit from mining and receives a part of mining profit according to the investment amount. Unlike self-mining, there is no requirement for purchasing a mining machine, so beginners can easily start.
There are four main cloud mining services, as shown below:
- Genesis Mining (Link – Promo code: O6IVMA)
- Eobot (Link – not available in U.S.)
- HashFlare (Link)
- Hashing24 (website has regional restrictions)
Advantages of cloud mining
Next, let’s check the advantages and disadvantages of cloud mining. You don’t really need a mining machine; thus, this eliminates the requirement of maintenance costs.
No mining machine required for cloud mining. You can start without incurring the cost of the machine and maintenance costs. Therefore, you can start without special knowledge. Cloud mining can start as easily as using a simple procedure of creating an account and depositing money in the cloud mining service. Moreover, this does not require any mining expertise.
By the way, if you start by yourself, you need the following knowledge: how to operate mining software, mining machine parts, assembly and knowledge about the setup. On the other hand, with cloud mining, you can start even if you are not familiar with mining and personal computers.
Editor Disclosure: This post may have affiliate links, meaning we receive commissions — via Bitcoin and cloud mining capacity — if you decide to make a purchase via these links. For more information, please contact the editor.