Is it worth to visit cloud mining?
Mining farm renting hash power to customers. So if you dont have your own mining hardware, you can sign contract with mining farm, that will pay you a portion of mined crypto based on amount of power, after the period.
How it works
- You choose provider (mining farm)
- Buy mining contract - you pay for a hash power (e.g 100 TH/s for BTC)
- Mining remotely and wait for a period to pass
- You receive payment - company sends you crypto you have mined, minus company and electricity fees
Risks
- Scams are common - many of them disappear with your money
- If legit, low profitable
- No control mining - you cant change settings. For example, if you buy contract for BTC and after a week (price dropped and its not profitable) you want to change it LTC, you are not able to do that.
- Price drop - your returns may not cover your cost
Why should farm rent hash power, if it can mine itself and keep the coin?
- Instant cash - they wont have to wait mining crypto and then get cash.
- They offload risks to customers - if mining becomes unprofitable, customer takes the loss.
- They get paid even you produce less than you have paid for contract
- Some of farms rent only a portion of farms - as an another revenue stream
If mining is profitable it's smarter for the farm to mine for itself and keep all the coins. Selling hash power would make sense if customer pays more than the mined coins are worth.
Conclusion
If you dont have mining hardware and want to have coins in portfolio, cloud mining is the worst thing you can visit. If you believe, for example, DOGE coin will raise and want to have some, its better to buy it on spot than buy DOGE mining contract at cloud mining companies.
I research, I share
