Follow On Google News

What is Cloud Mining? Mine Crypto in cloud

20 Jul 2022 By: Sourabh Agrawal
What is Cloud Mining? Mine Crypto in cloud

Decades ago, IT companies, big or small, had to maintain a server room under their office to meet the computation and space demands. With the advent of cloud computing, these companies shifted to a more efficient and affordable cloud computing alternative. 

Cloud computing provides an alternative to the high hardware needs of specific programs; the servers are remotely located and are used by multiple companies who wish to take advantage of this third-party service. 

Using the computation power of the cloud for mining Proof of Work(PoW) blockchains is pure genius when you think about it since the most significant drawbacks of PoW mining are solved by cloud mining for a minimal cost. 

Cloud mining: a brief description

Proof of Work(PoW) is a crypto mining technique that uses the computational power of one's hardware to validate the transactions on a blockchain. With cloud mining, a miner can utilize rented resources like computation power rather than installing and buying the full gear of hardware directly. 

As an individual who wants to mine Bitcoin, miners must invest in equipment, setups, and maintenance. For a small fee, by renting your cloud resources, you are outsourcing these services to the providers too. 

Cloud miners enter a mining pool, permitting users to buy a specific amount of "hash power" according to the budget. Then, each participant receives a pro-rata share of the revenues based on how much hashing power they rented.

Cloud mining features

  • Cloud mining may be deployed to mine cryptocurrencies by using mining equipment from third-party cloud providers

  • Hash power is required to start a mining operation.

  • Accessible for rookie miners who don't have to have prior coding experience.

  • Lowers cost of mining.

  • The only downside of cloud computing is that its final earnings are subject to demand fluctuations.

Advantages of cloud mining

No technical knowledge required

Cloud mining is the only way of PoW mining in which the miners do not need to require any type of knowledge about crypto or mining; it virtually does not require any kind of knowledge.

A traditional miner would have to research ASICs, setups places with low prices in electricity mining pools, etc. A cloud miner does not need to worry about all this; miners just need to create an account, pay the fee according to the hash rate needs and activate the service. It is important for miners to note that the greater the hash power, the greater the revenue, which will be directly credited to your account.

No operating cost, no heat or no noise

One thing that crypto miners complain about is the maintenance and the operating cost, which sometimes trumps the market value of Bitcoin. The maintenance cost of the Bitcoin mining machine is not the only problem; the energy incentive machines are environmentally hazardous to the local flora and fauna. They increase the temperature of the area; in fact, locals in the New York state where the mining pools were newly installed.

High Scaling 

Imagine buying new equipment worth thousands of dollars to upscale your mining empire in your warehouse; now imagine paying some hundreds of dollars from your phone or laptop to upscale your mining empire. Cloud has always been the enabler of accessible scaling with its flexible services. 

Disadvantages of cloud mining

Restricted to mine a few coins

Cloud mining platforms only support a few PoW coins that have high hash liquidity. When you own a machine, you can do anything with it, but with cloud mining, you have restricted options.

Low earning

Cloud mining is a ready-made solution; a lot of effort and hassle is eliminated, and hence this service is charged for use. Any extra charge will hinder your profit margins which during bear markets are already quite slim. In addition, over time, with the rise in the complexity of extracting bitcoin or, as happened in the last 12 months, with the decline in the value of the currency, situations can arise where mining generates little to no.

Types of cloud mining

Host mining

The most popular form of cloud mining, in host mining, miners purchase mining rigs to mine cryptocurrencies. In host mining, miners are responsible for the setup and upkeep of the programs. The side expenses associated with mining are reduced by host mining. Host mining allows users to control the rig, directing the hashing power generated to the mining pool. The host mining cost may be high at the start but decrease over time.

Leasing Hash Power

For successful mining, a high hash rate is required by leasing hash power; you are not charged for maintenance or setup.

Profits from newly formed blocks are divided among all users according to their shares of hash power. In comparison to bitcoin, altcoins are mined with this method of cloud mining. However, in this program, you must sign up for an appropriate plan issued by the mining business to get your portion of the profit earned by the pool.


Cloud mining is a good way for earning cryptocurrencies without having to invest heavily in machinery. With cloud mining, everyone can participate in the network and be a part of the blockchain revolution.