What is Cloud mining and Hardware mining?

 

What is Cloud mining and Hardware mining?

While mining for cryptocurrencies has become a popular way for people to earn digital assets, several vendors have put many available options, through which an individual or an entity can approach to take. The two options available are Cloud mining and hardware mining. Let us have a closer look at the two options.

1.      Cloud mining

Cloud mining is similar to the Amazon Web Services (AWS) where a person who wishes to host a service(s) such as webserver or other file server can pay the rental fee, instead of purchasing the hardware and setting up his/own infrastructure. In Cloud mining, the remote computing power from the data center is rented to the entity who would mine cryptocurrencies. This allows us to take advantage of the computing power of a large-scale operation without having to invest in the hardware yourself.

Some of the companies such as Genesis mining, hashflare, hashing24 and IQ mining provide cloud mining services to the people who want to mine cryptocurrencies. However, as of 1st of March 2020, Genesis announced that the platform is only available to the existing customers. During the time of this writing, the only packages/plans available was with Hashing24 only. Please visit https://hashing24.com/tariffs to get access to the plans available.

As is with any other services, Cloud mining has its’ own associated pros and cons.

Pros

• No need for hardware: One of the biggest benefits of cloud mining is that it eliminates the need for you to purchase and maintain your own mining hardware. This can save you a significant amount of money.
• No electricity costs: Another advantage of cloud mining is that you don’t have to worry about electricity costs. The mining company is responsible for paying for the electricity needed to run the mining operations, so you don’t have to worry about paying for electricity costs out of your own pocket.
• No technical knowledge required: Cloud mining requires little technical knowledge, making it an attractive option for people who are new to cryptocurrency mining.

Cons

• Lack of control: One of the biggest disadvantages of cloud mining is that you have limited control over the mining operations. You are relying on the cloud mining company to operate the mining operations and provide you with a portion of the profits. This can make it difficult to optimize your mining operation for maximum profitability.
• Dependence on the provider: When you participate in cloud mining, you are completely dependent on the cloud mining company to provide you with the computing power to mine cryptocurrency. If the company experiences technical difficulties or fails to operate the mining operations effectively, it can negatively impact your profits.
• Potential for scams: Unfortunately, the cryptocurrency industry has seen a number of scams in the past, and cloud mining is no exception. Some cloud mining companies have been known to operate Ponzi schemes or simply take customers’ money without providing any mining services.

2.     Hardware mining

Hardware mining, on the other hand, involves investing in physical mining equipment and running it yourself. This requires a significant upfront investment, but it also gives you more control over the mining process and can potentially lead to greater profits. Some of the popular hardware mining equipment are Antminer and Innosilicon. Similar to Cloud mining, Hardware mining has also pros and cons.

Pros

o   Control over the hardware: You as the owner has complete control over the mining equipment. This helps in giving you the authority to make decisions and optimize the profits.

o   Potential for greater profits: While you have the complete authority, you can also earn profits after selling the hardware even if you choose to stop mining.

Cons

o   Initial investment costs: This is one of the biggest disadvantages of hardware mining as the initial cost of setup of the hardware and the infrastructure is substantially huge. Additionally, you are associated with the electricity bill as operating the mining equipment/machine is very power consuming.

o   Technical knowledge required: Hardware mining requires a certain level of technical knowledge and experience, and it may not be suitable for everyone. You need to have a good understanding of the cryptocurrency mining process, as well as experience setting up and managing the hardware. If you don’t have the technical expertise, you may need to hire someone to help, which can add to your costs.

o   Maintenance costs: Another disadvantage of hardware mining is the cost of maintaining the equipment. The mining hardware needs to be kept in good working order to be effective, and you may need to perform regular maintenance, repairs, or upgrades to keep the equipment running smoothly.

Conclusion

Having given the comparison (pros/cons) about the two types of mining cryptocurrencies, it ultimately comes down to your personal preferences and goals. If you are looking at the low cost and low maintenance method, cloud mining will be the best option. On the other hand, if you have a good technical expertise and have large initial investment, hardware mining will be the best choice as you will have greater potential for profits and you have the control over the mining operation.