Cloud Mining Services
With cloud mining, you pay a cloud mining provider to mine a desired cryptocurrency (or several) at a certain mining performance. The mining performance, also known as hashrate, is specified in hashes per second (HPS).
There is usually a monthly fee for this, the earned coins, e.g. BTC for Bitcoin mining, go directly into a wallet specified by you.
For this, you register an account, then choose a rate plan with a certain amount of hashrate and specify which cryptocurrency(s) you want to mine.
Monthly plans offer more flexibility, but with longer subscriptions you can get out even cheaper. You can usually upgrade or adjust mining settings during the term as well.
No bitcoin mining hardware required
No electricity costs, at least not directly
No noise from the miners
No administration of the devices
Many cloud mining services act fraudulently
Less profit than normal mining (but less variance)
No ownership of the mining hardware
No influence when tech. problems arise. Problems
Bitcoin (BTC) Cloud Mining
Bitcoin MiningBitcoin cloud mining is offered by numerous mining services, mostly you become part of a Bitcoin mining pool that maximizes mining profitability.
Bitcoin uses the proof-of-work consensus mechanism, where only the miner who provides the correct hash is rewarded with the mining reward.
A Bitcoin mining pool has a much better chance of providing this hash due to the high hashrate.
In order to be successful in Bitcoin cloud mining, you need a provider that relies on modern and powerful mining equipment, special ASIC (Application Specific Integrated Circuits) miners are best suited. ASIC miners are specially designed for mining cryptocurrencies and are much more efficient than traditional CPUs or GPUs.
Ethereum (ETH) Cloud Mining
Ethereum MiningEthereum cloud mining is also becoming very popular, note that Ethereum is in the process of gradually switching from Proof-of-Work to the more efficient Proof-of-Stake mechanism.
With Proof-of-Stake, each participating miner is rewarded in proportion to their deposited ETH coins – so you can earn more regularly than with Bitcoin’s Proof-of-Work.
Nevertheless, the same applies here: modern and powerful mining devices are the be-all and end-all! The higher the hashrate, the better the earnings.
Provider Comparison & Experience:
However, the choice of provider should be made with caution. It is worth looking for testimonials first. Many providers have attracted attention by the fact that they do not operate any hardware at all, but promise users high returns through a snowball system that is financed by gaining new users and their deposits. Reputable providers cannot predict this. Providers should therefore be selected with common sense and be able to prove their hardware equipment.
Before you start mining and invest money in computing power, you should think about whether it is worthwhile for you. There are already different calculators like cryptocompare.com that can calculate this. An important factor in cloud mining is that the difficulty of the mining calculations increases over time. Thus, more computing power is needed, but the power that you have booked with the provider for a certain period of time always remains the same. Thus, the mining revenues decrease. This is because the more computing power available to the entire network, the higher the so-called mining difficulty, i.e. the difficulty of mining Bitcoin, for example.
The computing power is specified in most contracts in kilo, mega, or peta hashes per second. The number indicates how many hashes can be calculated per second to find a new valid block. So the higher the hash value, the higher the payout will be.
It is also worth paying attention to the running costs. Some providers charge ongoing fees in addition to the fixed costs. These should be included in the calculation so that they do not directly cancel out the entire mining yield.
So if you are thinking about starting to mine cryptocurrencies, you should carefully calculate the costs and returns beforehand and calculate whether it is worth it for you – or not.
Shamining is a UK-based cloud mining provider that already shares its impressive hashing power with more than 17,000 customers.
The provider currently operates three data centers, one each in the UK, South Africa and Southern California. It was launched back in 2018 and Shamining is now considered one of the most well-known and popular cloud mining providers. We took a close look at the provider based on the main criteria (profitability, variety of cloud mining plans, and customer service) and loved it!
The company offers a variety of cloud mining options. There are four different contract types as well as individual plans that promise the highest performance and profitability. The cloud mining plans on Shamining differ in their cost, hash power ratio, and profitability. Here are a few examples:
CPU miner with 23 580 GH/s and 143% return on investment. The price per 1 GH/s is $0.0120.
GPU miner with 94 340 GH/s and 149% return. The price per 1 GH/s is $0.0113.
ASIC miner with 235 849 GH/s and 156% return. The price per 1 GH/s is $0.0109.
Customers who make a minimum deposit of 500 US dollars are guaranteed a return on investment of at least 143%. With an investment of 5000 Euro this results in a monthly passive income of 890 Euro and an annual income of 10,680 Euro. In addition, new customers receive a bonus of 37% on their first investment.
Conclusion: Shamining is the best and most profitable cloud mining provider. The provider has already existed since 2018 and thus creates trust. For investors who are still undecided, Shamining offers a very useful calculator on its website to precisely calculate possible returns once.
Stormgain Logo Stormgain is a crypto derivatives provider founded in 2018 with its own trading platform. In June 2020, the provider added the innovative “Cloudminer” service to its range.
This allows registered users to operate the Cloud Miner and earn free cryptocurrency via the user-friendly smartphone app. The payout is made in the Stablecoin Tether (USDT), which is tied to the US dollar.
The only thing users need to do for this is to open the app every 4 hours and press the “Start Mining” button in the “Cryptominer” section. Mining profits are paid out every 30-40 minutes, with a minimum payout of 40 USDT. After the payout, you can use it to trade or exchange for other cryptocurrencies at Stormgain.
No wonder many satisfied customers share their cloud mining provider experiences on Trustpilot – Stormgain has 4.3 out of 5 stars, and there are also 4.3 stars for Stormgain in the AppStore.
Verdict: Stormgain is one of the best and easiest ways to start cloud mining because you don’t have to sign up for a paid subscription and you can get your first profits after just a few hours.
Genesis Mining is the top dog among cloud mining providers and has been in business since 2014. The operator’s state-of-the-art mining farms are located in Iceland, where the price of electricity is particularly favorable.
As a user, you can choose between the cryptocurrencies Bitcoin, Ethereum, Litecoin, Dash, Monero and ZCash here, for Bitcoin cloud mining there are 4 tariff options with 4 TH/s, 20 TH/s, 104 TH/s or an individual hashrate to choose from.
The contract duration depends on the selected cryptocurrency and can be between 12-30 months. Credit cards such as MasterCard and VISA are accepted as payment methods.
Conclusion: Genesis Mining is one of the most well-known and proven cloud mining providers. State-of-the-art and powerful mining farms guarantee profitable mining, several flexible tariff options are available for the most popular cryptocurrencies. Unfortunately, mining of multiple cryptocurrencies cannot be combined.
IQ MiningIQMining was founded in 2017 and has been one of the most successful cloud mining providers ever since. Impressively, the company operates a large number of data centers in Canada, Georgia, Russia, Algeria, and Iceland.
As a user, you can mine not only Bitcoin or Ethereum, but also important altcoins like Litecoin, Bitcoin Cash, Monero, Dash, zCash or Dogecoin.
The tariff model at IQMining works in such a way that you select a specific hash algorithm (SHA-256, SHA-256 PRO, SHA-256 BCH) as well as the desired contract term (1 year, 2 years, 5 years, lifetime).
The hashrate can be set individually on the controller, and the corresponding rate is displayed immediately.
In addition, a forecast of the expected payout per day, week, month and year is displayed. If you have any questions, the English-speaking customer service is available via live chat or telephone all day from Monday to Sunday.
Conclusion: IQMining is a reputable cloud mining provider that convinces with its flexible selection of hashrates and multiple contract terms. Bitcoin cloud mining and Ethereum cloud mining are only one of several options. Unfortunately, some contract models were currently sold out at the time of testing. The prices are in the upper range.
Hashflare is a cloud mining provider founded in 2015 in Scotland that claims to serve over 2,500,000 customers around the world with mining services.
Mining for the cryptocurrencies Bitcoin, Ethereum, Litecoin, ZCash and Dash is available. Unfortunately, nothing is known about the location of Hashflare’s mining farms, which does not inspire much confidence.
On the other hand, we find the short 12-month contract term and the daily payout of mining earnings appealing. The minimum hashrate for Bitcoin is 10 GH/s, and 100 KH/s for Ethereum. Unfortunately, the Bitcoin Cloud Mining plan as well as the Ethereum plan were temporarily unavailable during the test.
Conclusion: As a well-known name in the industry, Hashflare is a good cloud mining provider with short contract terms and acceptable prices. However, we regret lack of transparency regarding mining software used, moreover, server capacities are often exhausted.
What is mining for cryptocurrencies?
Cryptocurrencies such as Bitcoin, which are based on the Proof-of-Work (PoW) process, need to be mined. This is done by the so-called miners, network participants who provide computing power to the Bitcoin network, solving mathematical puzzles. This is done with purpose-built high-performance computers, such as the ASICS from the Chinese company Bitmain.
For solving these puzzles and adding new blocks to the blockchain, miners receive a block reward of 6.25 BTC. The network is supported, monitored and legitimized by the miners and all nodes. Participants are scattered around the world, which is why Bitcoin is also known as a “decentralized” cryptocurrency.
The proof-of-work process and mining occur in many different cryptocurrencies. Another process would be Proof-of-Stake (PoS), in which voting shares are determined based on the number of tokens held per address.
Mining is an easy way to make money – that’s the common opinion among people who have heard of Bitcoin mining, but haven’t thought it all the way through. Bitcoin mining is definitely a source of money for many people. However, these days these are mostly professional miners who mine Bitcoin with a large number of computers in veritable “farms”.
They take advantage of cheaper electricity costs, or even access to renewable energy, around the world. For the normal consumer, mining, especially in Germany due to the high cost of electricity, is now no longer an interesting form of investment.
Even with lower electricity costs, mining Bitcoin and other cryptocurrencies still involves considerable administrative effort. More time needs to be put into configuration and maintenance than is generally assumed. Also, technical expertise does not come naturally.
How do I recognize dubious cloud mining service providers?
To detect a potential scam in advance, it is recommended that you always look very closely. Of course, the first warning signal is always unrealistic profit promises that simply cannot be achieved.
When it comes to Bitcoin cloud mining, for example, it takes at least, but usually 12 months, to break even. Breaking even means having taken in as much money from something as you had previously invested.
Other warning signs can be high service fees or opaque contracts. Many providers practically specialize in offering windy contracts to their customers, which then stipulate flexible service fees.
At first glance, you should always pay attention to the company itself, the contracts, the prices and the payout rules to avoid black sheep.
Below, we will introduce you to Genesis Mining, a cloud mining provider that is highly regarded in the crypto community.
What kind of performance can I expect from cloud mining?
The performance you can expect from cloud mining depends entirely on your contract. Depending on the provider’s offer and performance, the commission earnings will of course differ as well.
The performance in cloud mining is measured by hash rates. Hash rates basically say with what speed new blockchains are tapped.
Therefore, the higher the hash rate, the higher the revenue.
Hash rates can be expressed in the following units per second:
- Kilohash (KH)
- Megahash (MH)
- Petahash (PH)
Thus, the hash rate indicates how many blockchains can be computed per second. (3)
When it comes to commission payment, the person who was able to achieve the highest hash rate has been the most productive and thus receives the highest share of the commission for that block. But the hash rate also changes the level of difficulty in creating new blocks: the higher the hash rate, the more difficult it is to create more blocks. (6)
Is cloud mining profitable at all?
If you know what to look for in cloud mining contracts and always sign them with reputable providers, cloud mining is quite profitable. Of course, it is important to inform yourself as much as possible about good offers and to compare the individual providers extensively with each other, so you can proactively work against bad surprises.
To compare conditions, reputable providers in particular offer calculators on their websites that simplify the calculation of services considerably.
You should also keep in mind that the price of cryptocurrencies fluctuates. Nevertheless, cloud mining can pay out lucrative commissions if the earnings performance is high. Reputable providers pay out commissions in proportion to the earnings performance. The range of services you can expect will be made clear either on the provider’s website or at the latest in the contract.
Mining Pools as an alternative
With the increasing success of cryptocurrencies, the number of so-called mining pools is also rising steadily. For more and more people, digital currencies are becoming interesting investment opportunities. Crypto mining continues to occupy a high position alongside the purchase of cryptocurrencies. However, while classic mining has become difficult for individuals, the so-called mining pools are becoming more and more popular.
The principle of operation is quite simple: several miners make their computing power available to the “pool”. These are then used in bundled form to increase the chances of mining revenues.
The advantages of a mining pool at a glance
- No previous mining knowledge required
- low workload
- no high capital expenditure
- entry is already possible with small amounts
In order to find the right provider, a mining pool comparison is recommended. In general, it is of utmost importance to use only the services of a reputable provider!
If you know what to look out for, cloud mining can be a great way to add a little extra to your fortune. However, as with so many money matters, pay close attention. Especially reputable providers list everything you need to know about their range of services on their websites. Therefore, it is important that you know what criteria you should look for when signing a cloud mining contract.
Even if an offer seems reputable, you should still play it safe and study the contract thoroughly. This way you can avoid gag contracts and other scams and really profit from cloud mining.