Published hace 6 meses • 8 minute read

Hosted Mining vs. Cloud Mining

Every day mining becomes more and more popular and widespread. People all over the world make money by providing their computing power and earning digital coins in exchange. And like everything else, mining is evolving and changing to meet demand. As a result, we now can see many alternative ways to mine cryptocurrency. Before it was only on your hardware, but now it can be done remotely. Some of them are more profitable but much more effort-requiring, while others are the opposite. In this article, we will review 2 of the most popular alternative ways of earning cryptocurrency - hosted mining and cloud mining.

 Hosted Mining vs. Cloud Mining

Indirect mining is a relatively recent invention, but it has already taken a massive part of the mining market. However, not many understand the difference between various indirect mining models. In our cloud mining vs hosting mining comparison, we will answer all possible questions about each of them. They both have some advantages and disadvantages on how they operate and profitability rate. So, you have to consider every aspect of such a mining approach to achieve the maximum profit with lesser efforts. After reading this article you will know which mining method is more suited for you personally.

Essentially, both hosted mining and cloud mining work by the same principle. You mine digital currency using remote hardware. However, there is a big difference in the implementation of each method. Next, we are going to discuss hosting mining and cloud mining separately, and then compare them. By doing so we will find out which option is better suited for one or another group of potential miners. Also, we will briefly review the history of each of them so that you know everything about the indirect mining industry.

Crypto Mining Hosting

Digital coin hosting mining is one of the most popular indirect mining models. According to this approach, an investor purchases or leases appropriate equipment from a provider. After the mining equipment is bought, it is sent to a hosted data center or a mining farm. There, this equipment is set up and is used for earning certain cryptocurrencies remotely. The owner of this equipment is responsible for covering electricity and storage costs. This model has a major benefit - complete and direct control over cryptocurrency an investor has collected. Another advantage is the scale - since it is a specialized facility it is much easier to cover electricity, storage, cooling, and other costs. It is what makes it better than mining on your hardware in a limited space.

Also, crypto mining hosting gives investors more control over the whole process, since you have access to the detailed specifications of mining equipment and what output you can expect. In addition, customers have access to their mining hardware where the mining hardware performance can be monitored. Another beneficial side of this mining model is that since every investor owns mining equipment, no third party is involved with the bitcoin hosting they earn. It increases the security of your cryptocurrency as only you have access to it. However, the mining hosting model is an expensive investment. Mining hardware of such scale will cost you a big sum of money, as well as renting a facility. Not to mention the costs associated with the inevitable repairing of mining equipment.

 Hosted Mining vs. Cloud Mining 2

Advantages of mining hosting

One of the greatest advantages of this cryptocurrency investing option is convenience. Mining with hosted equipment is much more comfortable and profitable than mining on your hardware. Due to the scale of average hosted mining farms, it is much easier to cover all costs related to it by earning big amounts of cryptocurrency. Hence, another advantage is that it is much cheaper to mine a digital coin. It is possible due to efficient process organization, cheap electricity, and suitable climatic conditions. Also, thanks to the efficient process organization hosted mining is much more eco-friendly than other mining approaches. Efficient cooling systems and rational energy consumption reduce the carbon footprint, which makes this indirect mining method very attractive for investors all over the world.

Disadvantages of mining hosting

However flawless it may seem, such an effective and tempting mining solution ought to have some disadvantages. One disadvantage is scam companies. Due to the immense popularity of mining, just like with everything like that, people started to come up with fraudulent startups. If you want to invest in hosting mining, make sure you work only with trusted and credible mining providers. There are many companies on the internet, so make sure to check such aspects as regulations, customer reviews, legitimacy, etc. The other negative side is potential diminishing profits due to the increasingly complicating mining process. It is due to the mining mechanics - the mathematical computations become more and more complex, and it takes more time to mine 1 digital coin on the same hardware. Also, if you are interested in cryptocurrencies other than bitcoin, you will face another drawback - their value is tied to demand. In addition, indirect mining approaches promote the centralization of cryptocurrencies, which can bring a decentralized ecosystem as a result.

About Cloud Mining

And now let's discuss the other indirect mining solution - cloud mining. Following this approach, a customer leases a hash power of a particular mining farm. Investors do not take part in supporting and maintaining the mining farm's stable performance. This is the provider's responsibility to take care of everything, while investors simply get all cryptocurrency earned by the farm. Since you don't have to purchase expensive equipment, this mining method is cheaper than hosted mining. You only have to pay electricity bills and fees related to the mining process which depends on how much hash power you lease.

Cloud bitcoin mining is not only cheaper but also less time-consuming since you don't have to do anything. You can invest a relatively small sum of money and get profits by just waiting. The overall cryptocurrency the mining farm has produced is equally distributed between all investors according to the power rate they leased. However, if you are interested in this mining model, make sure the cloud mining service you are working with will guarantee the hash power rate and mining capacity specified on their website. It is due to the common problem of hosted and cloud mining - false advertising and scam projects. Great popularity brings great impostors. As a result, we have many companies that can promise you the moon and the stars but will take your money and disappear.

To start cloud mining, you need to go to the mining company website, create an account, and sign a contract for half a year or 2 years. While signing the contract you can also choose the amount of hash power you want to lease. Among time-tested and most reliable cloud mining companies are Genesis Mining, Hashing24, HashNest S9, Hashflare, and Hash-miner.

Advantages of cloud mining

The first advantage is remote mining itself. If you were to mine at home you would be surrounded by cooling fans and various noises from the working mining farm. And if you are a miner with your mining farm situated somewhere outside your home you would have to visit it every day and maintain its performance on your own. However, with cloud mining, you don't have to worry about it at all. All you do is pay professionals to do this job for you. It saves you a lot of time which can be spent on other activities. The electricity costs become manageable on such a huge scale, which is also beneficial. You also won't have to look for an area where to place your mining farm and set up the cooling system. Everything is the provider's responsibility, and everything is already established when you are leasing a part of the mining farm's computing power.

Disadvantages of cloud mining

Since cloud mining is a joint activity of all investors from a certain mining farm and the farm provider, all actions related to digital wallets and cryptocurrency are transparent. It sets everyone at risk of being hacked or scammed. It means that you have to take additional protective measures to stay protected and ensure the safety of your cryptocurrency. Even though cloud mining is cheaper than hosting mining, the provider will charge some money in return for his services. It makes this cryptocurrency earning solution less profitable compared to other options. Also, you have less control over the mining process, which sometimes can be inconvenient. Scams are also a problem here, and you will have to spend some time looking for a reliable and trustworthy cloud mining provider.

Hosted Mining vs. Cloud Mining 3

Hosted Mining vs. Cloud Mining

And now, after reviewing each mining method separately, we will compare them and decide which of them is better suited for one or another group of investors.

Hosted mining is much more expensive than cloud mining, however, it gives investors more control over the mining process and gains cryptocurrency. In the meantime, cloud mining requires less time and effort, since the provider is responsible for supporting the mining farm and maintaining it in working condition, while in hosted mining the investor is responsible for that. Cloud mining is much cheaper than mining hosting thanks to the optimization of the process and manageable electricity costs. Also, both of these digital coin earning options are eco-friendly and more profitable than mining on your hardware or buying cryptocurrency on crypto exchanges.

Hosted cryptocurrency mining is suitable for investors that want to have complete control over the process and have full access to the mined digital currency. However, you must be ready to invest a big sum of money and give it most of your free time, since it is a very time and effort-consuming mining solution. However, in exchange for full control, you will have to take care of the mining farm, maintain its performance, monitor the cooling system, pay electricity bills, etc.

On the other hand, cloud mining is the ideal solution for investors that do not have or do not want to spend much time on maintaining the mining process and want the result only. It is almost a no-time-required mining option, where you pay a provider to support the mining farm and maintain it in working condition. However, in exchange, you will not have complete access to the computing power of a mining farm since you only lease a certain part of it. You will also get only a part of the overall digital coins mined over a period. This mining method is perfect for people that don't want to make large investments but still wish to gain some profits. You can combine cloud mining with any other investment options since you don't have to dedicate a lot of time to start collecting digital currency.

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