Cloud Mining – Crypto Glossary Definition:
Cloud mining, also known as cloud hashing, is a method of cryptocurrency mining where users leverage remote hardware and computing power to mine cryptocurrencies. This approach emerged as a response to the increasing mining difficulty that made it challenging for individual miners to profitably mine cryptocurrencies using their own equipment.
How Cloud Mining Works:
In cloud mining, individuals or miners purchase a share of the hardware and mining capabilities hosted and managed by cloud mining service providers. This eliminates the need for substantial upfront investments in specialized mining equipment, technical expertise, and the associated operational costs, such as electricity and cooling.
The cloud mining service providers configure and maintain the hardware, making it a convenient option for users with limited technical knowledge or resources. Users can participate in cryptocurrency mining without the complexities of hardware setup, software installation, and ongoing maintenance.
Additionally, cloud mining service providers typically allow users to select their preferred mining pool. Mining pools are groups of miners who combine their computing power to increase the chances of successfully mining cryptocurrency and receiving rewards.
Cloud mining offers several advantages, including accessibility for individuals who are not technically proficient, cost-effective mining without significant startup expenses, and the ability to mine cryptocurrencies from regions with high electricity costs.