Bitcoin Cloud Mining vs Traditional Home Mining. What is better?

Bitcoin mining is constantly getting more complicated. Every year more people are joining the mining industry — this leads to a rise in Bitcoin Network Difficulty. As the difficulty rises, the harder it is to mine and receive BTC.

The situation is even worse for home miners — they have to battle with large mining farms for the right to be the one finding the BTC reward. This trend has led to the emergence of so-called cloud mining. In this article, we will explain the idea behind cloud mining and compare it to traditional home mining to find the best mining solution of 2021.

What is cloud mining?

The evolution of cryptocurrency mining has gone through several stages — from solo mining on PCs to ASIC mining in big pools, that unite thousands of mining machines. In general, since 2013, we’ve seen a huge transformation of the industry. Mainly the stages of mining were:

1. Solo PC mining
2. Video Cards farm mining
3. Solo ASIC mining
4. Asic farm mining
5. Asic pool mining
6. Cloud mining

So what is cloud mining? To put it simple, cloud mining is the process of mining bitcoins and altcoins using remote equipment. Basically, you’re renting mining power from someone’s farm, paying only for TH/s and maintenance. The drastic difference with traditional home mining is that you don’t have to purchase or manage the mining equipment — everything is much more simple.

Cloud mining emerged at a time when it became very difficult to mine bitcoin. Many people did not want to spend money on buying equipment and study the fundamentals of mining. Besides, they wouldn’t be able to earn much with solo mining. So several companies came to the market with cloud mining services, offering people an easy way to start mining and earning. The pioneers of the market were Bitluck in Europe, BitDeer in Asia and St. Cloud mining in the US.

In most cases, cloud mining operators offer their customers certain mining packages for purchase. Depending on the cost of the package, the miner leases specific equipment physically located at the company’s premises. At the same time, the miner assumes all costs associated with paying for electricity and maintaining the leased equipment, although this service is carried out by the operator himself. After a certain period, usually one to six month, the profit from mining is credited to your account.

Cloud mining or Traditional mining?

So, now that we know what cloud mining is, let’s compare it to traditional home mining.

The advantages of cloud mining are as follows:

• Small Electricity fees. Cloud mining data centers are located at places with cheap electricity, that allows you to massively save on power bills. This is even more convenient for people that live in a country with high electricity tariffs.
• No need to purchase mining equipment
• Easy to get into
• No need to constantly upgrade equipment to meet the increasing difficulty requirements
• No problems with maintenance, cooling and repairs
• You are insured from equipment damage, theft etc

However, cloud mining isn’t a fairytale. Here are some disadvantages of this method:

• A lot of SCAM companies. Be very careful when picking the service provider
• If you live in a place with cheap electricity, home mining is more profitable
• Longer return on investment
• The option to stop mining if the exchange quotes of the mined coin change dramatically
• You can sell your mining equipment at any time

Hope this article was helpful! If you have any questions, feel free to comment below!