Cloud Mining - Definition, What is Cloud Mining, Advantages of Cloud Mining, and Latest News - ClearTax (2024)

Introduction to Cloud Mining

Cloud mining is a remote mining service that is provided by cryptocurrency mining hosts individuals interested in participating in the process in order to earn or gain some returns from the process. It is an accessible, shared power processing system that allows miners to mine crypto coins without having to establish the hardware and its maintenance.

About Cloud Mining

On a surface level, cryptocurrency mining is a computerized process that verifies the validity of transactions of coins done on the blockchain. The mining work is a lot more segmented, that host miners —like firms, corporations, companies etc. that establish and own the hardware and software, buildings and equipment— outsource that work, as well the equipment. With cloud mining, individual miners can access that warehouse, for a price or for free, and create their own mining rig. It is advantageous to these individual miners because they don’t have to incur the cost of establishing their own mining rig from the very scratch, or deal with the subsequent expenses and costs on its maintenance. Security is a major concern in Cloud Mining. There are hash rates proposed by the provider for a certain period of time in the form of hash contracts, and it can be difficult to ensure the longevity of the process, which will impact the job assurance. There is not guarantee that some firms themselves provide secure shared power processing tools; scams are at large.

Highlights of Cloud Mining

Cloud Mining erases the initial amount of investment it takes to set up a complete mining rig. By outsourcing the mining process through a cloud system, not only can miners access it from remote areas but they can also forgo the worry of maintenance and initial costs. Aside from contracts, shares of the cloud mining company and rigs can also be purchased to expect returns. Hash contracts provide hashing power for a price —sometimes for free too— which is the amount of energy required to compute a complex transaction on the blockchain. Higher hashing power with lower energy consumption is the ideal state of mining profitability.