In Binance (and generally in cryptocurrencies), "Mining Pool" and "Cloud Mining" are two different methods to earn rewards through mining. Here I explain the difference and what you can expect in earnings:

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1. Mining Pool

What is it?

It is a group of miners who share their computing power to solve blocks faster and receive rewards that are then divided among the participants according to their contribution.

What do you need?

Your own mining equipment (for example, ASICs or GPUs).

Connect to the Binance pool (or any other).

Constant electricity and a good internet connection.

Advantages:

Constant rewards (although small).

You own the hardware.

Disadvantages:

High initial investment (equipment, electricity, maintenance).

Risk of losses if the price of the cryptocurrency falls.

Earnings:

Depends on your hash power (hashrate), the pool, and the price of the crypto asset. Binance charges a 1-2% fee for participating in the pool.

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2. Cloud Mining

What is it?

You rent mining power over the internet (hashrate) through Binance without having your own hardware.

What do you need?

Create an account on Binance.

Purchase a mining contract (which can be for days, weeks, or years).

Advantages:

No need for hardware.

No maintenance or electrical consumption at home.

Disadvantages:

Risk that the contract may not be profitable if the market falls.

Fixed and generally low earnings.

You have no real control over the process.

Earnings:

Vary according to the contract. Binance shows the expected Internal Rate of Return (IRR). For example:

A contract may offer between 1% and 6% annual return, depending on the price of BTC and the mining difficulty.

There are contracts that do not even reach the break-even point if the market drops....