Cloud mining is an exciting way to invest in cryptocurrency without having to break the bank with initial investments. Mining crypto coins requires a lot of expensive equipment and it consumes a lot of energy as well. This limits the access to new investors and those without the liquidity needed to borrow early on.
That’s why many small and mid-size investors turn to cloud mining as an alternative. It allows access to the equipment and the tech needed for mining without the large initial investment.
How Does it Work?
It refers to mining cryptocurrency without owning the equipment needed for it yourself. This means that you pay for the service of using the mining equipment and get to use the coins that were produced in the process for a fee. Numerous companies are providing the service and you can use sites such as Truely.com to compare and choose the best cloud mining sites. .
When setting up a cloud mining contract you need to be aware that the profits you can make out of it are somewhat smaller than when you do the mining yourself. However, the earnings are made right away without the need to set up or maintain the equipment.
Finding a Reputable Provider
There are online reviews and resources dedicated to comparing and contrasting good cloud mining providers. It’s essential that you dive into this research before deciding on a provider you plan to use. That way you can learn from those who used their services before and avoid the providers that have a bad rap.
This approach is a bit disadvantageous towards newer and smaller providers, and those do tend to come up in this growing field. Keep in mind that it’s not about the size and history of the cloud mining provider, but about the features it provides.
How Long Does the Contract Last?
One of the most important decisions an investor in cloud mining needs to make is how long they plan to commit to using the service. A contract that’s too short won’t turn out to be profitable, but one that goes on for too long may also be less profitable than investing in your own equipment.
For the most part, the providers offer four options: contracts lasting for one, two, or three years or you could get a lifetime contract.
The Basic Features
There are a few main features that provide the basics of cloud mining contracts. You want to make sure that you understand these and that you know how to navigate them before deciding on setting up a contract.
-You’ll need a Blockchain Explorer. This is a browser that displays bitcoin blocks, and addresses.
-A Profitability Calculator makes it easy to calculate how much the coins you have are worth.
-A monitoring system allows you to keep track of the cryptocurrency you own, how available it is to mine, and what kind of transfers and withdrawals are mined.
-Crypto wallet is a digital wallet in which to store your coins.
-A cloud mining contract should also provide a chat with which to contact customer support when needed.
Can You Sell Your Contract?
Some users want the ability to sell their contract after a while and to pass it on to a different user. This isn’t a common request but it’s also not unheard of. If this is important to you, you should inquire about the option before setting up the contract.
Some providers simply don’t allow the users to sell their contracts and if this is important to you, it’s best to avoid them.
Some Will Try to Sell You on Regulation
There are cloud mining providers that try to sell their services based on the fact that there’s little regulation when it comes to this practice. Indeed, the regulatory bodies haven’t yet caught on to cloud mining, but it’s no reason to set up a cloud mining contract.
This is something that’s beyond the control of the cloud mining provider. There’s also a chance the policy will soon change as more and more users sign up for cloud mining and the governments start taxing the profits.
In the end, the cloud mining contract won’t affect the value of the cryptocurrency once you move to an e-wallet. The biggest downside of using cryptocurrencies is how volatile they are and how their value can change. The argument can be made that this is true for fiat currency as well.
This means that once you decide to sell your Bitcoin or make transactions with it, the currency may be less valuable than it was once you’ve mined it in the first place. It can also be worth more, however. If a cryptocurrency cloud mining provider offers some guarantees as to how much you can earn from the coins you’ve mined – it’s best to be distrustful of such claims.
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