Cloud mining means you don’t need to buy expensive dedicated cryptocurrency mining equipment, which makes it the most cost-effective way for individuals to make a profit with altcoins.
There is no need to buy and set up equipment, pay to have it maintained or pay for the cost of running it. But as with any industry that might be a little bit new and a little bit mysterious, cloud mining is full of sharks. There are companies everywhere that don’t do what they claim but will be happy to take your money, so before you enter into a cloud mining contract with anyone it’s essential to vet your potential service provider.
Even with reputable providers, users need to check that they offer referral schemes and a decent selection of algorithms to choose from. Reputable names include Hashflare, Eobot and Genesis Mining. Hashflare and Genesis mining are recognized for offering good services.
It’s also sensible to compare the contract fees and ongoing expenditure involved with cloud mining. Bitcoin mining relies on the SHA256 algorithm so it’s best to check that’s available, along with the X11 or Scrypt algorithms too.
If your service provider offers its own mining pool then this is a good thing because it will extend your choices. Mining pools are a great idea because they allow you to pool your resources with other investors. Fees for accessing them are usually around 1 to 2% of total payouts.
Another consideration to take into account is the security of the mining platform. All cloud services should offer high levels of security, but it’s worth checking what they actually offer. Bitcoins are extremely valuable and therefore extremely prone to being targeted by criminals. Protection from DDoS attacks should be the absolute minimum that you should look for when choosing a cloud mining service provider.
But even when protection is good, it’s wise to be prudent and to not put all of your coins in to the wallet offered by your cloud mining provider. It’s the adage about 'putting all of your eggs in one basket. It’s safer to spread your assets around. It’s also wise to use two factor authentications with every one of your wallets. This is one of the most effective ways of keeping cyber criminals at bay.
Finally, you should look for extra features like the ability to buy or sell hashpower, the chance to earn interest on cryptocurrency deposits, and so on. Some platforms will allow you to mine the most profitable altcoin automatically according to the present rates, so definitely go for these offerings if they’re available.