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An In-depth Overview of Best Cloud Mining Companies

Last updated on: February 7th, 2020

Cryptocurrency is on the verge of overtaking paper money considering how it’s being adopted as an alternative form of currency for upcoming companies. Medical as well as financial institutions have taken to this crypto craze, and despite the slow start, people from around the world can now see the value of cryptocurrency. Earlier on, purchasing cryptocurrency such as Bitcoin was easy as its perceived value was relatively low.

gpu mining rigHowever, the value of a single Bitcoin has since risen since its boom in 2013, and most people have resulted to alternative ways of getting their hands on this revolutionary currency. One of these ways, which has been used since the inception of Bitcoin is mining.

Mining involves solving complex arithmetic problems using a GPU or CPU and specialized software to get rewards in the form of Bitcoins. Plus you’ll need mining rig like the one on the picture.

Mining at home requires low electricity costs and success in the venture for a minimum of six months with little changes in the competitive landscape. On the flipside, the difficulty levels have been on the increase in recent years prompting Bitcoin enthusiasts to resolve to another tactic, cloud mining.

Cloud Mining

Cloud mining or hashing as popularly known is a process that involves the leasing of crypto mining hardware by companies to miners. As such, Bitcoin miners do not have to deal with the excessive noise and heat issues that arise when mining at home. These data centers are also a great way to reduce electricity costs and save more, and they also reduce the risk of hardware failure.

To get into cloud mining, users are required to purchase hashing power or a mining contract from a verified data center. Hashing power is bought as Gigahash per second (GH/s) and follows the timeline indicated on the contract. Some companies can offer a year’s contract while others are bold enough to offer lifetime contracts. What’s more, if you do not rake in the profits intended, some mining companies can allow you to trade your hashing power.

With cloud mining, you have a variety of options regarding the currency you wish to allocate your hash power towards. Be it Litecoin, Bitcoin, Ether or even Dash expect each currency to have a different contract regarding the amount of time they allocate to users. It can be two years with Litecoin or a year with Bitcoin.

Another approach to cloud mining involves owning a Bitcoin mine and choosing a remote company for hosting services. Normally, this form of cloud mining works best in areas with high electricity costs where hosting presents an affordable option or where the miners are easier to cool. The data center of your choosing will host the miner while you connect to it remotely.

Some data centers even offer daily contracts where both the company and the rig owned by the miner they are hosting profit directly from the earnings. We’ll get into the nitty-gritty of cloud mining companies later but for now, let us have a look at the pros and cons of cloud mining.

Advantages

No Hardware Failure – With no hardware failure to worry about, you are guaranteed a better payout and improved uptime. Data centers absorb all costs regarding the hardware, it maintenance, configuration, and failure.

Immediate Activation – While its contribution to mining difficult might not be as significant, troubleshooting new equipment or sending it back is a waste of valuable mining time. With cloud mining, all you have to do is purchase your GHs and start mining.

Low Electricity Costs – As stated earlier, mining at home means a high electricity bill. Nevertheless, cloud mining companies get discounts and cheap power due to bulk pricing or a strategic location making them an affordable option.

Noise, Space, and Heat – Bitcoin miners require space and are extremely noisy. As such, mining at home requires a solitude which is hard to come by as well as a new house plan intensifying your ventilation and cooling systems. Nonetheless, with a mining company, you can eliminate all these nuisances.

Resale – with cloud mining companies, you don’t have to worry about where you are going to sell your mining equipment. Once your contract is over, there are no losses to incur concerning hardware or further stress on how to dispose of it.

Installation – As opposed to home mining, cloud companies have all the equipment you require, and most of them will only ask for a setup fee once.

Hazard – Due to overheating, mining equipment might cause a fire and cost you the house. Such risks are eliminated once you pay for hosting services.

Cons

antminerNo Ownership – As opposed to home mining, you do not have ownership over the mining equipment so even after incurring losses in your mining exploits, you cannot recoup the money by selling the mining equipment.

Low Profits – While cloud mining reduces costs regarding electricity and hardware maintenance, profits from mining are not as massive. In addition, miners still have to pay hosting fees to use a mining company.

Less Control – As opposed to mining at home, most mining companies do not give users the freedom to tweak miner settings or choose the mining pool they intend to mine. What’s more, they cannot control the hashing output from the mining software either.

Fraud – most mining companies cut their losses and run off with your Bitcoins after overselling their hash rate. It is advisable to choose a company with proven payouts.

How does Cloud Mining Work?

For starters, a cloud mining contract with some of the companies discussed later on in the article is required. Genesis Mining is the most common one, but there are others; some legit, some scams. Other than this, an upfront cost is needed which can be in Bitcoin or even in dollars for the regular flow of Bitcoins into your virtual wallet.

Some mining companies also have additional levies on top of the initial charges which significantly distorts profitability. Most of the cloud mining companies that have these extra costs are Ponzi schemes which stop payout and disappear without a trace. As such, you need to find a verified cloud mining company before investing your resources.

Types of Cloud Mining

Cloud Mining can be divided into three forms.

1. Hosted Mining

Hosted mining involves the leasing of a mining machine with the provider as the host.

2. Leased Hashing Power

Leased hashing power is the most common form of cloud mining. It involves the leasing of a certain amount of hashing power with no dedicated virtual or physical computer.

3. Virtual Hosted Mining

Virtual Hosted Mining involves creating an all-purpose virtual private server for installing your personal mining software.

Cloud Mining Companies

bitcoin earnings

The market is filled with tons of cloud mining companies meant to aid clients with their mining efforts. Nevertheless, most of these companies are frauds aimed at stealing Bitcoins from miners with ease. As such, potential clients are advised to check the about’ section of any cloud mining company where they want to invest their resources and time. Considering how trust is vital in cloud mining and if that part has nothing on it that might be a red flag showcasing the illegitimacy of the said company.

Having said that, if there is general and verifiable information regarding owners, executive owners or the founders, the company might be authentic. Look also for pictures of the facility as well as data regarding their total scale and hashing power. If you can’t find such information, then the company is most likely a Ponzi scheme.

Even after finding a legitimate company, you still have to assess their performance levels and weigh the risk against the reward. As such, it’s not ideal to find and settle on one cloud mining company without proper evaluation and comparison with some of its other legitimate counterparts. Here are some examples of Bitcoin Cloud Mining companies and the services they offer for comparison.

Examples of Bitcoin Cloud Mining Companies

Genesis Mining

This mining company located in Iceland is the biggest scrypt and Bitcoin mining contractor. They have reasonable prices, offer three Bitcoin cloud mining policies as well as Zcash mining contracts.

Hashflare

This Company offers automatic payout in Bitcoin for SHA-256 contracts and SHA-256 (more lucrative) coins. However, all clients are required to buy a minimum of 10 GH/s.

Read our HashFlare review here and check this insane 72 days ROI below.

HashFlare Bitcoin Mining Calculator

Hashnest

If you are familiar with Antminer miners then you have little knowledge regarding this cloud mining company; both were created by Bitmain. Hashnest is currently renting over 600 Antminer S7s and display their availability and prices on their website. They also provide quality and up-to-date equipment for all your cloud mining exploits.

Eobot

Eobot might not be as famous as its two counterparts above but offers both low starting prices and guarantees within a limited period. You can venture into Bitcoin cloud mining with $10 and stand a chance of breaking even in just 14 months.

Other Bitcoin cloud mining companies include but are not limited to MineOnCloud, NiceHash, Bitcoin cloud mining, Hashing 24, Minex, and Minergate. As observed earlier, be sure to look up each cloud mining company you come across to ensure its legitimacy as the number of Ponzi scheme companies associated with cloud mining is alarming.

Some of these companies also offer Litecoin cloud mining services but at different prices depending on the contract. These companies include Genesis mining, Hashflare, Minex, Eobot, and Minergate. Eobot has a 0.0071 Litecoin monthly payout while Hashflare offers contracts with a purchase as low as 1 MH/s. Genesis Mining also provides Dash clouding services and is the most reputable in that regard as well as Ether cloud mining services alongside Minex, Hashflare, and Eobot.

Ponzi Scheme Companies Called Out

While some of them are lucky to escape being called out before closing down shop, most cloud mining service providers are merely Ponzi schemes. Examples include Bitcoin Cloud Services which was recently unearthed as a $500,000 scam. Others such as Bitminer.io and Zeushash appear to be scams too based on the outrage from clients due to halted payouts.

Is Cloud Mining Profitable?

The best thing about cloud mining is the most companies give their clients a chance to calculate profitability before and even after joining. For example, Genesis Mining has the Genesis Block, a profitability calculator that enquires your initial hardware investments as well as your electricity bill. As such, you can identify any ongoing costs and add that with one-off investments then compare that to the profits you are receiving to determine profitability.

This table below shows HashFlare earnings for 20TH/s…

estimated hashflare Bitcoin Earnings

However, most companies are designed to offer their services while prioritizing on your hardware parameters as opposed to cloud mining restrictions. You can also weigh your monthly electricity bill against the power charges required by a specific service provider. There are no cryptocurrency mining ventures that are a smooth road. If it’s not a Ponzi scheme, the wrong choice might lead you down a path of losses.

Some cloud mining companies are smart enough to lure customers with amazing profits within the firsts six months just to hand them losses after that as mining difficulty increases. You can avoid these losses by reinvesting what you have earned thus far to maintain a competitive hash rate. While this method is highly speculative, it is a risk worth taking as opposed to months of consecutive losses.

Is Cloud Mining Ideal for Average People?

The most significant hurdle to cloud mining is the legitimacy of the company providing the services. After proof of its regality, the only other things you have to be worried about are the changing mining difficulties, price fluctuation, and the lifespan of your contract. More people are venturing into crypto mining as an investment prompting rises in mining difficulty.

Prices fluctuate as well thus if, at the purchasing of the contract you paid $15 which crashes to $1, your profits may be significantly reduced. Not to mention, many people are making losses on a monthly basis after signing lifetime contracts. As explained earlier, prices fluctuate, and there are times when mining is hardly profitable. As such, start out with a small contract, say for 12 months.

In Closing

As discussed throughout the article, there are very many loopholes to avoid and a dozen risk factors involved with cloud mining. However, cryptocurrency mining in itself is a risk, and potential clients are advised not to invest more than they can lose. Be sure to scrutinize social media channels as well as the official website and liaise with former customers before investing.

To cloud mine successfully, you need to exercise the same thoroughness you have when approaching any other investment.

I’m a seasoned Interior Designer whose innovation, keen eye for detail and creativity have all earned me the reputation as a reliable go-to professional. Over the course of a decade, I’ve garnered extensive industry experience, successfully designing hundreds of bathrooms along the way. Additionally, I hold an Interior Design Certificate from College of Architecture and Design in Newark, New Jersey. Outside of my profession, I have an avid interest in all things related to fitness and cryptocurrency. If you are looking for a competent expert who can help you renovate your living space, then feel free to contact me today.

1 Comment
  1. What are the ways to break down entry barriers to digital money? Three companies – CoinsBank, QIWI and Genesis Mining – suggest their answers to this question.

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