Mining. What it is, how it works, and the most important question: can it make you rich?
So, to understand mining in the cloud, you need to understand how bitcoin mining started many years ago.
New bitcoins are created on average every 10 minutes, no matter how many people try to use them. As competition for new currencies increased, people began to invent more powerful and efficient mining machines. Since the network gave new bitcoins only every 10 minutes, but the competition was constantly growing, this meant that more and more energy was consumed to get a piece of this cake. Summing up, finally, an ultra-efficient mining equipment called ASIC was invented, which completely changed the game. It was no longer profitable to use your computer or video card to extract bitcoins. Instead, I needed an expensive machine specially designed for mining bitcoins.
So what is cloud mining?
Well, in fact, instead of buying this equipment yourself, you can pay the company to buy and run it. You pay a fixed amount in advance, and then make a profit from mining. Sounds great, right? Could this be the cure of the century?
Well, to understand this equation, you need to look at the other side of the deal. Suppose you had a warehouse full of effective bitcoin miners.
Option 1: extract coins for yourself.
Option 2: become a miner in the cloud, take money from people and then give them the coins that are mine in return. Which option is better for you?
Well, if you take enough money, you can make more money as a cloud mining provider, but this money comes from your customers. This is a problem, from my point of view, as a client of cloud mining. Of course, the mining company will charge enough to make a profit. And that makes me a guy who pays for everything.
So let's take a look at some real contracts on the popular cloud mining website pool.bitcoin.com.
Here is your free hosting for 1 year. We invest 6,000 dollars and see what they design, we will start to win. Hmm ... about $ 10 / day. How long does it take to upset the balance? 600 days
I think this is probably a losing proposition, especially if you think that you will not return your $ 6,000 at the end, and your daily payment will decrease faster and faster as the complexity of mining increases. But that means nothing against bitcoin.com. I think they are a great company. Just cloud mining is a win-win proposition, and I think that you and I are usually on the wrong side of the deal.
But what do you think? Have you tried mining in the cloud? How it was?
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