Cryptocurrency mining can be profitable when done right. Doing it right. These days means looking for the most affordable way with the highest profit potential.
It used to be easier to mine, but it is getting more difficult and the investment required to mine is on the increase.
One of the ways you can easily mine cryptocurrencies is by cloud mining. This is the mining of cryptocurrencies using a “cloud”, more like cloud computing. Miners rent mining power from a cloud mining company to contribute to mining.
This method of mining works because you can participate with the little capacity you have. To set up a Bitcoin mining rig for instance, you need to buy an ASIC miner, which can cost thousands of dollars for a good one.
However with cloud mining, you can contribute the little mining power you have. At the end of the day, you’ll be rewarded based on how much you contributed towards the mining venture.
How Crypto Cloud Mining Works
As stated earlier, cloud mining allows you to pay for mining capacity from a cloud mining company, and then you can have a share from the company’s mining proceeds. You can follow the steps below to start cloud mining.
Choose a Cloud Mining Company
The first step towards starting cloud mining is to pick a suitable cloud mining company. You should take time to search and pick a good and reliable one, because there are scam ones out there.
Check the team behind it, reviews on the company, among other details to ensure that it is a legitimate cloud mining company.
Choose a Mining Package
Crypto mining companies offer different packages to suit different people. Depending on your financial capacity, you should choose a package that suits you and then pay for it.
The cost of a plan depends on how much power you wish to rent and how long you wish to rent it for.
The return on investment however depends on the cost of the package also. The more expensive the plan, the more return on your investment you’ll get.
Choose a Mining Pool
After picking a mining company and a mining package, the next step is to pick a mining pool. A mining pool. The mining pool is a pool where miners contribute their mining power and mine together.
While the mining company can assign you one automatically, some of them let you pick the mining pool you wish to use. Select a reputable mining pool and then proceed.
Pay for Your Package
The next thing is to pay for your chosen package. This is usually done with cryptocurrencies that the company decides on, but some may allow you to pay with fiat.
Once you have paid for the mining package, you can start mining. Technically, you don’t need to do anything about this, as the company sets up and runs the mining hardware on your behalf.
Get Your Mining Rewards
The company mines on your behalf, and then pays you rewards based on how much power you rented. After successful mining depending on how long you rented the power for, the company shares the profits among miners using its facility.
The reward is paid in cryptocurrency to your wallet, and you may choose to reinvest your share of the profit or use it for whatever you want.
Why You Should Do Cloud Mining
By using a cloud mining company, you can participate in crypto mining without actually managing your own hardware or having any technical knowledge.
You can also invest with lower amounts than is required to set up your own mining rig. It is also a source of passive income since you don’t have to actively participate in the mining process.
Cons of Cloud Mining
Like any other investment, there are bound to be scams, so you should watch it and make sure you only use legit companies.
The business is also outside your control, and many factors such as crypto volatility and regulatory risks may affect your investment.