What is Cloud Mining?
Let's find out Cloud Mining meaning, definition in crypto, what is Cloud Mining, and all other detailed facts.
Cloud mining is a method of cryptocurrency mining that outsources operations to countries with cheap electricity costs and colder climates.
Cryptocurrency mining requires users to adapt their computer hardware to handle the computational work which secures blockchain operations. Users receive rewards in newly mined coins for the achieved mining progress.
The crypto mining space is in general quite competitive, regardless of which blockchain it is dedicated to. How fast a user can mine or what share of the reward they may be eligible to heavily depend on the efficiency of their equipment, commonly referred to as the mining rig. This massively depends on the computational power, or hash rate, of the device.
Hashrate is the measure of how many hashes a mining device can calculate per second. The most common measurements are GH/s (gigahash per second) and TH/s (terahash per second).
Another important factor is energy consumption and efficiency. ASIC devices, machines built for the sole purpose of crypto mining, require intensive electricity resources to generate a larger amount of terahashes per second. These costs have to be covered by the miners.
Furthermore, due to the heat produced during mining, the devices can overheat. Additional energy resources are required to cool the devices and remove the heat from the mining systems.
Mining cryptocurrency can be a complicated process altogether, as it requires not only access to specific hardware but also software expertise to ensure that the mining operation is properly optimized. Additional expenses can include hiring the services of hardware experts or engineers.
Cloud mining was developed to make the mining process easier for those who cannot spare the resources required to get started. Cloud mining companies have their operations set up in regions with cheap electricity and naturally colder climates. The hash power produced by these mining rigs can be rented out to remote clients using mining contracts.
Cloud mining is particularly useful for small-scale miners as they do not need to make the massive investments of setting up for the initial mining. It is also convenient for the service providers as they do not need to take up the full risk of crypto mining. They are also able to quickly expand their services as they make income from the mining contracts.