When you are looking to mine cryptocurrencies but you aren’t interested in buying and looking after the mining hardware, you might want to think about signing up for cloud mining contracts. They are very popular because they allow miners to rent hash power from data centers that could be anywhere in the world. All you need to get started is a crypto wallet on a home computer, then you sign up and off you go!
Cloud mining contracts have become extremely popular because they do away with the need to pay huge amounts out for electricity. There is also no need to put up with all the heat and noise that is generated by mining machines that are working around the clock, and there’s none of the hassle involved with getting rid of old equipment after you upgrade either (or because you just decided not to do it anymore).
Having said all that, when you start cloud mining, it’s important to be clear about the potential drawbacks. Cloud mining offers a great deal of potential to fraudsters who are only too keen to hoover up the money of unsuspecting investors. It’s easy to set up a website, gather a lot of subscription money and then disappear. And trusting a cloud provider means that you’re putting the mining operation in their hands, so it’s all out of your control.
Cloud mining contracts can give you access to different types of cloud mining. For example, you could try hosted mining where the provider only leases the mining equipment to you. You could also try virtual hosted mining where you have access to a virtual private server on which you can install your own software. And last but not least, you can lease hash power alone. This last option is currently the most popular in cloud mining.
When you decide to sign up for a cloud mining contract it’s extremely important to ensure that the provider is legitimate. Fraudulent companies are everywhere and it’s easy to be conned by them. These firms invest in nice-looking websites that claim to show their impressive mining farms, but it’s often all fake. Once you’ve signed up then some of these companies will transfer one or two legitimate payments to gain your trust, but soon the payments dry up and they disappear into the night.
This serves to illustrate how important it is to check the credentials of every company that you might want to sign up with. And even for legitimate companies, you need to read the terms of your contract very carefully so that you understand their payment structure and your rights.
One tell-tale sign that a company may not be legitimate is that it accepts Bitcoin payments as well as those from credit cards. The reason they do this is that Bitcoin payments can’t be reversed, which helps them no end.
It’s worth looking at the “About Us” page on their websites to find out who their founders and chief execs are and to learn about their mining facilities. It’s understandable that even genuine companies don’t want to let you know where their servers are because of the risk of criminals targeting them, but they should at least be clear about what territory they are based in.