What is Bitcoin cloud mining?

Users must register with a mining company and purchase a mining contract that acts as their “share.” Most people are familiar with bitcoin, so bitcoin cloud mining is still the most common form of crypto mining. However, you can mine any crypto that uses the proof-of-work consensus mechanism.

How does cloud mining work?

Each participant earns a pro-rata share of the profits in proportion to the amount of hashing power rented. Cloud mining involves mining for cryptocurrencies by leasing or purchasing mining equipment from a third-party cloud provider, who is responsible for maintaining the equipment.

What are the different types of cloud mining?

Popular models for cloud mining include hosted mining and leased hash power. The advantages of cloud mining are that they reduce overall costs associated with mining and allow everyday investors, who may lack sufficient technical knowledge, to mine cryptocurrencies.

Is cloud mining risky?

Cloud mining is risky insofar that you are relying on someone else to mine cryptocurrency, without ever actually checking they own the hardware necessary to mine bitcoin, or whichever coin you choose. Lots of fraudulent cloud mining services claim to be mining bitcoin on your behalf yet just suck up your money instead.