Can Cloud Mining Be More Profitable Than Getting Mining Hardware For Bitcoin?
The process of crypto mining demands a lot of preparation, no matter which cryptocurrency you choose. Mining Bitcoin (BTC), however, requires even more.
If you are a Bitcoin miner, or you at least researched the issue, you probably quickly realized that this is quite a difficult process. There a lot of aspects of the process that need to be considered, like the Proof-of-Work's mining algorithm, fees, and hashing power. Not to mention the extremely expensive equipment that is necessary in order to do it.
However, there is another option which may be more profitable, and that is cloud mining. But is it really the best way to go? Let us find out.
Bitcoin Miningining: Hardware & Cost
Let's start with the necessary mining hardware. In order to mine Bitcoin, you cannot just use anything, and in order to get a quality device, you will have to prepare quite a sum in advance.
Bitcoin mining hardware can cost from a few thousand dollars to tens of thousands of dollars. The price largely depends on which crypto you wish to mine (in this case, Bitcoin), as well as how big of a mining operation you are planning.
The cost of a mining rig depends on which one you want. You might go for an ASIC mining rig, or a GPU and CPU mining rigs. ASIC mining rig is usually far more expensive, and their hash rates are a lot faster. However, they are known for facing scrutiny due to the fact that you cannot repurpose them.
Basically, if the hash algorithm of the blockchain changes, your ASIC rig will become pretty much useless, and you will have to acquire new gear. Obviously, this is the most expensive solution.
GPU and CPU gear, on the other hand, can be re-purposed. The gear is also a lot cheaper, and much more acceptable than ASIC, which often finds a lot of resistance. This is why most miners choose to go for GPU and CPU instead of ASIC.
Of course, there is always an option to have several mining rigs set up, in order to multiply your earnings. However, this means that you will have to acquire them first, which is probably the most expensive option. Even with several mining rigs working at the same time, it will probably take months before you can cover these initial costs via mining. Not to mention other factors, like the cost of an electric bill that is going to skyrocket as soon as you start your mining operation.
The electricity cost varies depending on your location, which makes it hard to precisely calculate the cost of keeping the operation up and running.
Cryptocurrency Cloud Mining Pools: Profitable or Not?
Calculating the costs of cloud mining, on the other hand, is a much easier process. A lot of companies are using monthly subscriptions, with their cost being determined by the targeted crypto that the user wants to mine. Additionally, the cost of the model is also determined by the hash rate speeds.
For example, taking a contract for 2 years of mining Ethereum with Genesis Mining can cost anywhere between $1,520 and $12,960, depending on the speed which can go from 40 MH/s to 360 MH/s.
On the other hand, there is a website called HashFlare, which can provide you with a contract that lasts only one year, and it costs $1.80 for 100 KH/s.
The fact is that cloud mining is expensive as well, and not that profitable at first. You will probably need more than a year to cover the cost of the initial investment. A lot of people don't do their research properly, which is why they enter the process expecting to get rich in less than 6 months. This is, of course, never the case.
Generally, cloud mining is not that profitable at all. Because of that, it is also not the popular way of crypto mining. Monthly subscriptions will always be there, but it won't always be easy to pay them off. There are always the USB mining options but they are not very powerful.
If you choose to go with the mining hardware, the costs will be upfront, and you will know what you are getting into. The cost of electricity will be a bit more difficult to predict, but if you can afford to perform your mining operation in parts of the world where the electricity is cheap, and mining is legal, you can actually make a pretty good profit much faster.