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What is Cloud Mining?

Cloud mining is a type of passive cryptocurrency mining using someone else's equipment. The user rents computing power for a fee in a remote data center and receives in return part of the mined coins. The final profit depends on a number of services and options, offered by the cloud mining company.

How cloud mining farms work

A company that opens a remote data center for cloud mining, must go through several important stages:

  1. Purchase of equipment for mining: video cards, processors, cooling systems, power supplies, etc.

  2. Creation of crypto farms. Each farm can consist of several connected units mining equipment, and its operation is controlled by special software. Correct installation can only be carried out by experienced specialists.

  3. Launch of digital currency mining. The company may offer different types of mining coins depending on the characteristics of the farm.

  4. Creation of a website through which the company offers to rent the capacity of its farms. Typically, clients have several contracts to choose from. Their cost depends on the hashrate - the mining speed.

  5. Miners buy a power rental contract. In return, they receive a percentage of the mined coins. The more expensive the tariff, the higher the profitability.

  6. The company receives revenue in the form of commissions for renting capacity.Part of the amount is spent on farm maintenance and staff salaries. The remaining money is net profit.

In the end, everyone remains in the black. Miners receive their digital currency, and cloud services - profit from leasing power.

Why cloud mining has become popular

There are several main reasons which explain the increased interest in this method of cryptocurrency mining:

Advantages and disadvantages of cloud mining

The advantages of cloud mining include the following:

Cloud mining also has its disadvantages, which are also important to consider before investing money:

Considering all these shortcomings, you need to understand that the longer the contract the miner signs, the higher the risks he takes on.

Types of cloud mining

Depending on the type of rental equipment, cloud mining can be divided into three main types:

The third type is the most popular among beginners, as it does not require virtually any knowledge or experience in mining. You just need to buy a ready-made contract and watch how new coins appear on your balance every day.

Another way to participate in cloud mining is to sell own capacities. That is, the miner himself can act as a contractor and rent out his equipment. To do this, you need to have a powerful farm (or remote data center), as well as a website to promote such services.

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