In the early days, before Bitcoin became this popular, the very first way to get your own Bitcoins was through mining. Then, every mathematical algorithm solved that resulted in block mining, brought a reward of 50 BTC to the lucky one who managed to solve the computational problem.
Bitcoin mining is done by adding exchange records to Bitcoin’s public ledger of past blockchain. This record is known as the blockchain as it is a chain of blocks as inferred by the name. This blockchain makes sure transactions have taken on the network which is done in two different ways:
- Through the use of a Bitcoin mining hardware e.g. Bitmain Antminer S5, AvalonMiner 741 etc.
- Through the cloud mining process.
Cloud mining is a way of referring to a host company who owns a Bitcoin mining hardware and runs from at a remote location. You pay the company and lease out the mining hardware usage. In view of the measure of hash control you lease, you will procure an offer of installments from the cloud mining organization for any income generated by the hash control you bought. You practically need no hardware or software to do this. The procedure makes mining available to a more extensive number of individuals worldwide. Such organizations charge on a usage basis just like we pay for electricity bills.
We have three types of cloud mining models stated below:
- Hosted Mining: Here, you rent a mining machine that is hosted by the cloud mining provider.
- Virtual Host Mining: Here, you create a (general purpose) virtual private server and install your own mining software.
- Leased Hashing Power: This is the most popular form of cloud mining, where you lease an amount of hashing power, without having a dedicated physical or virtual computer.
The process is very simple and only requires a person to open an account with a cloud mining company via its website and select certain things like the contract period and hashing power. However, the presence of fraudulent companies or imposters cannot be refuted, and thus one must be sure of the cloud mining company.
It is essential to note that cloud mining is way different from using a mining software. A mining software is downloaded on your computer, which is used alongside a mining hardware. The software connects your hardware to the internet so that it can make hashes and communicate with the network remotely.
Cloud Mining Viruses
Notably, some viruses have been identified to find its way into a computer and then uses such computers’ powers to mine bitcoins (or any altcoin) on a computer. To prevent this, it is advisable to install a reliable antimalware (a.k.a. antivirus software) and regularly run a diagnostic check detector if you think your computer has been attacked.
Cloud Mining Profitability
Cloud mining is profitable depending on your aim for mining. If your aim is to obtain bitcoins, then there is really no reason to go through this route or use a mining hardware. Buying bitcoin or working to earn one is usually the best way of getting one.