What is Crypto Currency Cloud Mining?
Cloud Mining is the process of crypto currency mining utilizing a remote datacentre with shared processing power to host the crypto-currency hardware and buy/lease the hash power on the hardware. In short, a client pays the company and rent out some of the hardware. Based on the amount of hash power a client rents, they will earn a share of payments from the cloud mining company for any revenue generated by the hash power purchased. This type of cloud mining enables users for example to mine bitcoins or alternative crypto-currencies without managing the hardware. Since Cloud Mining is provided as a service there is generally some cost and this can result in lower returns for the miner, however, it significantly lowers upfront costs to get into crypto-currency mining. Mining is a long-term and highly profitable business that remains relevant as various currencies drive opportunities for early adopters to crypto currency mining.
The surge in activity in the field of production has now led to the significant increase in prices of video cards and lack of related equipment in stores and warehouses. More and more people are interested in crypto-currency, but they face many obstacles.
Mining on an industrial scale is very expensive and specific, the installation of a farm at home is accompanied by a number of inconveniences for nonprofessional miners. However, industrial mining is discredited by the presence of unscrupulous market participants, whose cloud mining is often an ordinary fraud. We are the first due diligence and optimization company that offers a transparent system for buying hash power and exporting crypto currency to customers’ wallets.
Cloud mining is really useful for those who aren’t technically minded and don’t want to run their own software or hardware. If you have very high cost electricity too – for example in South Africa – then it’s a good idea to outsource your mining to somewhere where electricity costs are much lower as they are in America.
Generally there are three types of cloud mining. There is hosted mining, where a user leases a machine being hosted a provider. Then there is virtual hosted mining, where the user creates a virtual private server and installs their own mining software. Finally there is leased hashing power, where the user leases a certain quantity hashing power.
What are Cloud Mining Advantages?
- No excess heat to deal with
- Quiet because of no constantly humming fans
- No electricity costs
- No mining equipment to sell when the bitcoin or other crypto currency mining is
no longer profitable
- No ventilation problems with hot equipment
- No pre-ordered mining hardware that may not be delivered on time by the mining equipment suppliers
- No installation costs and upkeep of mining equipment
The Challenges in Cloud Mining
One of the most obvious challenges in Cloud Mining is the number of potential scams that the industry has had. The risk is that there are several firms claiming to be “cloud mining” companies but they may not be supplying the required contract or actually have servers that are being used, they simply run them like Ponzi schemes of which they take the client contract, and then make claim that they cannot pay out or will not pay out due to fluctuations in the currency, energy, and hardware costs associated to their contract.
Other than the obvious concern of fraud within the industry, other challenges include the specific pools the provider are associated to, the currency, contracts, and reliability of the data centre. Services are generally measured in Gigahertz (GH). If an individual were to choose the optimum services they need to determine which firm they want to go for – whether it’s a 500GH contract or a 1000GH contract and for what term. Most Bitcoin contracts are for a year, however some can be infinite (although this might sound too good to be true as most machines will be obsolete 18 months if Moore’s law continues to be followed – which would mean the Bitcoin or crypto currency mining company would be operating at a loss in the not too distant future assuming the rate of network hashing power continued to increase). There are some providers who offer shorter and intermediate length Bitcoin contracts of between 6 Months and 24 months. There has not been a single company to date to build an optimization system of these contracts for the highest return on investment until IBITx.
Some mining contract providers charge clients fees throughout the contract on top of the initial payment, which can distort the return metrics, and sometimes the mining contract provider can go bust or be a complete fraud. This is why a solution that provides a concise database on who is reputable and can be trusted to run a crypto currency mining hardware machine on the client’s behalf is so important, and requires constant monitoring and revision of relationships.
Because it’s easy for companies to take peoples’ money, and then not pay out. A company can claim to be a cloud mining company without any proof of actually owning any hardware. Therefore directly going to cloud mining providers without the next generation tracking and due diligence on the firms, individuals run the risk of being defrauded for services they purchased.
- Unverifiable or otherwise shady Bitcoin cloud mining operations
- No fun! If you like building your own Bitcoin hashing systems.
- Lower profits – Bitcoin cloud mining services or mining company will have expenses
- Bitcoin mining contracts may have the ability to cease operations or payouts in the contracts if the Bitcoin price is too low
- Lack of possession of the Bitcoin mining hardware
- Lack of ability to change the Bitcoin mining software
However, most of the con’s can be alleviated with due diligence, monitoring, and optimization.
Examples of Cloud Mining Providers
Hashflare Review: Hashflare offers SHA-256 mining contracts and more profitable SHA-256 coins can be mined while automatic payouts are still in BTC. Customers must purchase at least 10 GH/s.
Genesis Mining Review: Genesis Mining is the largest Bitcoin and scrypt cloud mining provider. Genesis Mining offers three Bitcoin cloud mining plans that are reasonably priced. Zcash mining contracts are also available.
Hashing 24 Review: Hashing24 has been involved with Bitcoin mining since 2012. They have facilities in Iceland and Georgia. They use modern ASIC chips from BitFury deliver the maximum performance and efficiency possible.
Minex Review: Minex is an innovative aggregator of blockchain projects presented in an economic simulation game format. Users purchase Cloudpacks which can then be used to build an index from pre-picked sets of cloud mining farms, lotteries, casinos, real-world markets and much more.
Minergate Review: Offers both pool and merged mining and cloud mining services for Bitcoin.
Hashnest Review: Hashnest is operated by Bitmain, the producer of the Antminer line of Bitcoin miners. HashNest currently has over 600 Antminer S7s for rent.
Large and Smart Profits
We Share The Risk
Why IBitX Cloud Mining!
Easy as 1,2,3
Our Due Diligence Process
IBitx takes the quality of services and profitability very serious due to the number of cloudmining service providers that have been involved with selling contracts that simply could never be profitable due to the ongoing requirements in many crypto-currency mining operations to increase power and hardware to the point of not being profitable.
The criteria that is taken in to consideration are based on the industry best business practices and due diligence required to enter the IBitX platform.
Some of these criteria are manual and others are built into sophisticated prioritization systems running various checks and algorithms utilizing “smart” technology developed by partners of IBitX.
The criteria includes but is not limited to:
- The service providers grasp of cryptography, programming, human nature (both sociology and psychology), basic economics and electrical theory
- Analysing the mining difficulty (For example, the bitcoin difficulty is how hard bitcoins are to mine. The bitcoin protocol is designed to, on average produce a new block every 10 minutes. All mining hardware is attempting to find a random hash value that meets the required difficulty, when someone finds it the block can be constructed. To keep the average block time at 10 minutes, the bitcoin network raises the required difficulty of the solved hash such that it keeps the average time a hash is found at 10 minutes. If more miners join the network, the higher the difficulty, if miners leave the network the difficulty will fall.)
- the status for paying when sub-contracting a cloudmining service
- availability in stock
- mining currency
- daily ROI %
- days to ROI
- Independent tests of their service, including tracking of lease capacity, and a ratio of “the investment”, amount paid, profit, and timing of payment
- The financial backers of the datacentre, cloudmining company, or pool
- Proof of ownership and available physical equipment by way of video and or in person inspection of the partners data centre
- Uptime and equipment tracking in the event of equipment or network failure
- Security Protocols
- Availability to inspect and track equipment disclosed IPs with proven ownership of those servers and access points
- Pools the services are linked to and or the ability to influence pool preferences
- Are they a reseller or seller of mining hardware (a positive)
- Whether the hardware the firm has is or is becoming obsolete
- Are they associated to major industry firms, such as Bitfury or endorsement from any asic miner vendor
- Pool analysis, such as How long has the pool been around? What fees do they charge? How do they divide up the bitcoin rewards? How frequently, on average, do they find blocks? What sort of withdrawal options do they offer?