Cloud mining allows you to mine cryptocurrencies without special hardware. Anyone who wants to mine cryptocurrencies finds a cloud mining service and invests in hiring hash power. Customers have to pay special fees, which cover hardware maintenance, power bills, staff costs, etc.
Clients who have invested in hash power can rely on rewards depending on how much power they have hired. It is recommended to pay attention to the difficulty level of the mining algorithm of a particular coin before investing in order to calculate the expected reward.
This is a rather easy way to get profit. You don’t need to buy hardware on your own, do any accounting, equipment maintenance or pay high electricity bills. All you need is to choose an appropriate cryptocurrency and estimate an investment amount.
Can I start mining on my own? The answer is YES, and many enthusiasts have recently done this already. However, the difficulty of mining algorithms has a constant growth, requiring more hash power from your devices.
In the first couple of years after the appearance of Bitcoin, enthusiasts could mine using their CPU. Then they started GPU mining. Later, miners used GPU mining farms and finally, ASIC appeared. Nowadays, you need to create your ASIC farm in order to remain competitive.
When you build your own mining farm, you have one great advantage – you do not need to pay fees to anybody. You get all the profits except expenses for maintenance etc. However, this approach has multiple disadvantages.
The most important one is the expenses. There are lots of costs you have to pay even when you have bought equipment already. You have to cover power bills, rental of premises, staff costs. Additionally, you take price change risks.
Equipment is the main bulk of costs here. Apart from ASICs, you need to create a reliable and effective cooling system. If you order equipment from abroad, you need to cover custom fees.
Apart from the equipment, you have to keep in mind the high electricity costs. It fluctuates depending on the region where you plan to create your farm and these farms can use a lot of electricity.
Every mining farm needs starting configuration and maintenance. You can save money if you are a professional in this field. Otherwise, you need to hire someone who can do it for you.
Part of the above-mentioned costs including power bills and maintenance expenses will be recurring. As for the equipment, you buy it once. However, some of the farm’s parts may fail and require immediate maintenance or replacement requiring additional expenses.
Is this the end of the expected costs’? Not at all. We have only mentioned the growing mining difficulty. In order to remain competitive, your farm needs ongoing equipment upgrades.
Ultimately, when dealing with cryptocurrencies, you have to always keep in mind currency fluctuations as bitcoin investment may be risky for you. Equipment is designed to work with a specific algorithm. If cryptocurrency's price declines towards a breakeven or even lower level, you have to be prepared for the period of low to zero profits, with the same level of costs.
If you are interested in investing in the best service in this industry, you can consider the Hashmart provider. This company is a team of enthusiasts, professionals in different branches.
Our main goal is to make cryptocurrencies accessible to everybody. You can start by creating your own account and buying your first contract. To do this, you can use a very user-friendly dashboard with a wide range of features.