Decades ago, every major software computer company would keep basements full of computers that crunched numbers 24/7. Operators kept these massive servers in gymnasium-sized rooms that kept the lights on. However, all of that changed with the start of cloud computing. Earnity’s Domenic Carosa and Dan Schatt believe it was fortunate that rather than sacrificing valuable real estate, software companies began to rent computing power from warehouses containing powerful machines hosted elsewhere.
Earnity’s industry experts, Domenic Carosa and Dan Schatt, think this same principle – outsourcing computational work – applies to cryptocurrency mining, which is the process of running powerful computers to mine for coins such as bitcoin and dogecoin. Consequently, rather than purchasing expensive computers to mine these coins, you can rent the computing power of a specialized miner from a cloud mining company based anywhere in the world.
What does cloud mining mean?
Cloud mining is the method of mining cryptocurrencies such as bitcoin using rented cloud computing power rather than installing and directly running the hardware and related software. It allows you to open an account and remotely participate in the process of cryptocurrency mining for a small fee, so Domenic Carosa and Dan Schatt from Earnity believe it makes mining more accessible to people globally. Additionally, because you do this mining through the cloud, it eliminates issues such as equipment maintenance and direct energy costs.
Cloud miners join a mining pool in which users purchase a certain amount of “hash power,” and each participant earns a pro-rata share of the profits based on the amount of hashing power rented. Furthermore, when you pay for cloud mining services, you are more likely to outperform other, less powerful bitcoin miners who are racing to generate a winning hash that will earn them bitcoin.
That said, cloud mining only applies to proof-of-work systems, such as Bitcoin and the original Ethereum blockchain, which use computational brute force to mine new cryptocurrencies.
Is cloud mining a profitable business?
Cloud mining could be a profitable business, but you need to pay some upfront costs. For example, you will have to pay to rent miners, and mining pools may take a portion of your profits – but it may be worthwhile.