All the existing bitcoins come from somewhere. They come from a complicated process called mining. Mining bitcoins requires specific hardware. Hard powered computers are necessary to solve complicated math problems to produce a new bitcoin.
Solving one of these problems is extremely difficult, and it would be impossible for a human brain to do so. Even for those computers, it is not easy. There are mining farms built around the world, and at the moment you see one, you will realize how difficult and what kind of technology is necessary to mine bitcoin.
Bitcoin mining also spends a lot of energy. According to a study from the University of Cambridge, bitcoin mining consumes more energy than Switzerland’s whole nation. Now, just think about that!
But, there is another way to mine bitcoin, and it is called Cloud Mining.
What exactly is Bitcoin Cloud Mining?
Here is how Wikipedia describes it:
“Cloud mining is the process of cryptocurrency mining utilizing a remote datacenter with shared processing power. This type of cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware. The mining rigs are housed and maintained in a facility owned by the mining company, and the customer simply needs to register and purchase mining contracts or shares”.
I think this explanation says pretty much all of it. So, if you want to mine bitcoin easier, you can do it through cloud mining. Why? Because with cloud mining, you don’t need to install any hardware. There are companies where you can open an account with them and participate in the process of cloud mining for a small cost.
This means that you will get involved in buying a specific amount of hash power, and each participant will share the profit. There are no issues such as maintenance of equipment or energy costs.
Nonetheless, the presence of fraudulent companies or imposters cannot be denied. Thus one must make sure the cloud mining company is credible. Here is a free detailed guide to the best bitcoin cloud mining sites in 2020.
How many models of cloud mining exist?
Broadly, there are three types of bitcoin cloud mining:
- Hosted Mining
- Virtual Host Mining
- Leased Hashing Power
Those who use hosted mining equipment can lease a physical mining server or a virtual private server and install mining software. There are services that, rather of leasing a dedicated server, offer hashing power hosted in data stations for sale mostly in Gigahash/seconds (GH/s).
Users can select the desired amount of hashing power and a period for the contract, or if they would like to, they can trade their hashing power.
Moreover, the process is mild, and it just requires a person to open an account with a cloud mining firm via its website and select specific things such as the contract period and hashing power.