How to build a passive income stream from cloud mining?

Cloud mining is the process of mining cryptocurrency without the direct use of mining equipment or hardware. The process allows users to mine Bitcoin or altcoins without having to manage their own resources.

In traditional crypto mining, cryptocurrency is produced through a computational process. Miners need to solve complex mathematical problems using mining hardware to be rewarded with coins. The process of cloud mining is similar, but instead of using their own resources, miners rent or buy resources from a service provider.

As more players entered the cryptocurrency scene, mining became more complex, requiring more computing power. For this reason, many people who used to mine crypto using their own hardware now find it unsustainable due to high electricity costs and the wear and tear on their hardware. Cloud mining has therefore become an attractive option.

How does cloud mining work?

In cloud mining, third-party providers rent out computing power to miners. This means miners don’t have to invest in their own resources, which generally requires a large upfront investment. Cloud mining also removes the need for miners to maintain and update their own equipment.

How it works is that the service provider buys or builds a mining rig and then rents out the hashing power to miners. The cryptocurrency mined is then sent to the miner’s wallet. In most cases, the service provider will also offer a mining-as-a-service solution, which allows miners to outsource the management of their mining equipment.

As for the mining process itself, it’s pretty similar to how cryptocurrency mining works. Transactions are verified and added to a blockchain, thereby creating new coins. Each time a transaction is validated and added to the blockchain, a new block is created. Miners are then rewarded with crypto by adding verified blocks to the chain.

Many cloud mining websites offer cloud services for miners. Among these are StormGain, BeMine and ECOS. Most cloud mining sites take a small portion of your earnings as commission. Some platforms, like ECOS, offer monthly plans with no commission.

Cloud mining models and types

There are two common models for cloud mining:

Both of these models have their advantages and disadvantages. It’s important to choose the right model for your needs before getting started with cloud mining.

Hashing power leasing

Hashing power leasing is a popular model for cryptocurrency cloud mining. With this model, you lease a certain amount of hashing power from a cloud mining provider, so you can mine cryptocurrencies. The advantage here is that you do not have to invest money to set up your own mining rig.

The mining provider provides rented cloud computing power from a mining farm, which means you also don’t have to worry about the upkeep of mining equipment. All you need to do is pay for the hashing power you want to lease, and you can start mining.

A miner has to register for an account with a cloud mining provider and provide certain details during signup. These include details such as the hashing power needed, as well as their desired contract period.

Hashing power is determined by the amount of mining power you need. It’s important to choose the right amount of hashing power, as this will determine how much you’ll be paying for the service.

A hash refers to the mathematical function used to mine cryptocurrencies. The hash rate is the speed at which a miner can complete this function. This means you’ll need to pay more for a higher hash rate. However, a higher hash rate also means you’ll be able to mine more cryptocurrencies.

The contract period is the length of time for which you want to lease hashing power. Most providers offer short-term and long-term contracts.

Hosted mining

With hosted mining, miners rent physical equipment from a cloud mining provider. Since the cloud mining hardware will be located in your home or office,…