{"id":129812,"date":"2023-11-24T14:59:10","date_gmt":"2023-11-24T14:59:10","guid":{"rendered":"https:\/\/www.techopedia.com\/?post_type=definition&p=129812"},"modified":"2024-02-26T18:58:34","modified_gmt":"2024-02-26T18:58:34","slug":"cloud-mining","status":"publish","type":"definition","link":"https:\/\/www.techopedia.com\/definition\/cloud-mining","title":{"rendered":"Cloud Mining"},"content":{"rendered":"

What is Cloud Mining?<\/span><\/h2>\n

Cloud mining is the process of mining<\/a> cryptocurrencies<\/a> like Bitcoin<\/a> using rented computing power from service providers<\/a>.<\/p>\n

Unlike solo mining, which requires an upfront investment in hardware<\/a> mining gear, cloud miners can lease these resources for a small fee.<\/p>\n

In return, the investor shares in the crypto incentives the company generates every time a block<\/a> is added to the network<\/a>.<\/p>\n

Techopedia Explains<\/h3>\n

This approach allows users to participate in crypto mining<\/a> operations remotely, eliminating the complexities of running a mining rig<\/a> 24\/7 and the associated costs.<\/p>\n

Due to the total lack of control of the mining process and rewards, cloud mining is often targeted at rookie miners.<\/p>\n

There are numerous advantages to cloud mining. Firstly, it makes crypto mining more accessible. Anyone with a cloud mining contract with the service provider can earn crypto rewards.<\/p>\n

In addition, cloud mining is also cheaper and simpler to set up \u2013 especially for investors with little to no technical knowledge.<\/p>\n

To get started, users only need to register with a cloud mining operator (often a third-party provider), select how much hash power<\/a> (computing resource) they want to acquire, specify the crypto asset, and proceed.<\/p>\n

From every successful mining operation, the block reward is then shared by both the user and the mining firm based on an agreed-upon sharing formula.<\/p>\n

How Does Cloud Mining Work?<\/span><\/h2>\n

Cryptocurrency mining often requires significant time and resources for validating transactions. Often, the fastest mining rig to solve a complex cryptographic<\/a> puzzle is the one that gets the associated block reward.<\/p>\n

However, with the escalating mining difficulty, obtaining block rewards for major cryptocurrencies like Bitcoin largely depends on the power of the hardware at your disposal. The cost of these hardware devices can amount to millions of dollars.<\/p>\n

Cloud mining provides a solution, allowing retail and hobby miners to validate transactions on their preferred blockchain networks<\/a> without incurring massive financial investments.<\/p>\n

Below are the steps of the cloud mining process.<\/p>\n

\"6<\/p>\n

1. Select a Cloud Mining Firm<\/h3>\n

The first step is to choose a cloud mining platform<\/a> to use. With numerous options available, it can take time to identify the most suitable one.<\/p>\n

However, several factors must be considered when selecting a cloud mining firm. These include:<\/p>\n