As you’re reading this in 2019, there’s a very high chance that you know how bitcoin works. Therefore this article isn’t going to waste your time by discussing its ins and outs. It is for those who know what mining means and are wondering if they should actually embark on the long and turbulent journey of being a Bitcoin Miner. Virtual mining, or cloud mining, involves buying a hashing power from an organisation that owns mining farms — they do this to minimise ROI times and make use of opportunity costs of capital. Simply put, they don’t have time to mine, but you might.
Cloud mining requires absolutely zero technical knowledge. It’s a simple and fast service to use if you are looking to get into Bitcoin mining — no need to know what an ASIC is or a mining pool. You just pay a fee and activate the service.
There is no need to buy expensive hardware and even less need to worry about that hardware going wrong. There are countless incidents of hard drives crashing with several bitcoin on them, which can of course be akin to throwing your money away. Though you could use professional data restoration services to get away with hardware mining, cloud mining does reduce the stress you might face in a situation like that. Cloud mining also means your equipment won’t devalue.
No operating costs are involved in cloud mining, which means your hardware won’t need extreme AC and won’t burn you when you touch it. Mining hardware shouldn’t really be kept at home as it could be a huge fire risk because it consumes a tremendous amount of electricity. If you live in an apartment, cloud mining might be your only choice.
Cloud mining is associated with low earning — all those pros come at a cost and you suffer that cost with your ROI. Part of the mining is retained by the farm to cover their costs and with the volatile state of bitcoin, you can be looking at very little profit if you get unlucky. If the coin drops in value, you might also get situations where cloud mining services are forced to suspend their farms due to cash flow issues. Some argue that it’s better to buy bitcoin directly and just hold it due to the very low revenues offered by cloud mining.
There are also loads of scams that look to trap people who want to invest. The cloud mining industry has long been known to host many fraudulent companies, so if you’re really interested in cloud mining you should only use certified companies, no matter how good the offer is from less reputable ones.
Cloud mining is also limited to the most popular major currencies, so you will not be able to diversify your portfolio and boost your returns by mining new coins at their conception. This is a risky choice but you can make very good profits by mining coins when they debut as difficulty and spread is minimal. Cloud mining, for all its benefits, doesn’t offer that.
As a rule, real mining is more flexible, profitable and offers more possibilities, but it also means you may contend with more problems.