Cloud Mining: A new stage of Cryptocurrency Mining

23 February 2021

Introduction to Cloud Mining

It is a method to mine a cryptocurrency, such as bitcoin, using chartered cloud computing and without necessarily having to install and instantly run the hardware and related software. The basic cost in the process of cryptocurrency mining, cloud mining ventures always allow people to open an account and remotely participate, making mining accessible to a wider number of people across the world.

Maintenance of equipment or direct energy costs, all these kinds of issues are reduced because the form of mining is done via cloud.

Mining  is  the  vital  process  wherein  generation, transmission and validation of transactions of cryptocurrencies is done. It ensures solid, firm and safe proliferation of the currency from the payer to payee. Unlike fiat currency, where a centralised authority controls and regulates the transactions, cryptocurrencies are decentralised and work on a peer-to-peer system. It requires huge  infrastructure  to  function  and operate from banks that generate physical currency and monitor the transactions.  Cryptocurrencies get the better of  this need  by carrying out a  mining system where people in the network, called  ‘miners’ or  nodes’,  monitor  and  validate  transactions which generate currency.

What is Cloud Mining?

Cloud mining is the backbone of the cryptocurrency model, such as bitcoin. It is the exercise by which transactions are corroborated and added to the public ledger, known as the blockchain. Also, the new coins are liberated through this medium.. Cloud mining is the amalgam of the two that opens the world of mining to people at distant locations with little or no technical knowledge and hardware infrastructure.

Cloud computing technology, more generally, is one of the fastest-growing technology trends wherein computing services such as processing, server capacity, database services, software, and file storage are accessed via the cloud, over the Internet. Such companies demand on a usage basis just like we pay for our water or electricity usage.

How cloud mining relates with cryptocurrency?

Cryptocurrency,  which is a form  of  digital  currency  that has an unbarred and decentralised system and uses cryptography to build up security and control the creation of new units, which is proclaimed to  be  the  next  step  from  conventional  monetary  transactions. There are many cryptocurrencies existing today in the world but bitcoin is the most prominent of them.. Cryptocurrencies are  generated by  mining, as  a fee  for validating  any  transaction.

Cloud mining for cryptocurrencies such as bitcoin, whether via the cloud or locally, does not literally involve any mining. During the span when this process does generate new cryptocurrency tokens that are awarded to miners, the mining operation serves a much more crucial purpose for maintaining the security of a distributed ledger such as a blockchain. Bitcoin mining is implemented by high-powered computers that solve composite computational math problems; these problems are so complex that they cannot be solved by hand and are complicated enough to tax even incredibly powerful computers.

When cryptocurrency miners add a new block of transactions to the blockchain, part of their job is to verify that those transactions are precise. In particular, bitcoin miners make sure that bitcoin is not being duplicated, a distinctive quirk of digital currencies called “double spend.” With printed currencies, counterfeiting is always an issue. But in general, once you spend $20 at the store, that bill is in the clerk’s hands. With digital currency, however, it’s a different story. The miners use their computational power to solve cryptographic puzzles that prevent double spend in a decentralised manner.

Advantages of Cloud Mining

• It does not require any hardware like GPU, Computer, or mining rig etc.
• We don’t have to perform any kind of configuration and you do not need to keep an eye on your rig. (sometimes temperature becomes greater than 100 Degree).
• It does not require you to pay the bills for electricity.
• It does not count for the investment like 1000$ in hardware you can even start with just as minimum as 2$.
• It blocks the complication of the loud noise generated by hardware when mining.
• It turns down overall costs associated with mining and allows everyday investors, who may lack sufficient technical knowledge, to mine cryptocurrencies.
• The users can invest in different cryptocurrencies, and protect themselves from fluctuations in rates.