There have been several technological innovations over the past few decades, among which the most amazing has been the evolution of cryptocurrencies. It is inspiring the entire world. Bitcoin is the leader of them all. Bitcoin mining services aim to offer a quick, smooth, and decentralized platform for the people to send digital money anywhere across the planet without the intervention of any central authority.
What exactly is Bitcoin:
Bitcoins are used to secure transactions, make payments using digital assets eliminating the need for using cash for every transaction. Bitcoins can be exchanged with the other currencies that are in use. Bitcoin was first initiated in the year 2008 when the concept was published in a whitepaper “Bitcoin- A peer to Peer electronic cash system”. The first transaction was done in 2009 and the system became popular through forums and chats.
From CPU mining to cloud mining:
Bitcoin mining was initially being done by the miners from their personal computers using the CPUs. However, when people understood the concept and saw the potential profits, the number of miners increased. People found that the CPU mining was resource intensive and the profit margins were reducing.
Computer hardware manufacturers started developing GPUs that completed the worker faster and was lower in resource consumption. The popularity of bitcoin mining flew to a higher level and the investors, as well as miners, made good profits. Bitcoin mining services became more affordable and lucrative when service providers started offering cloud- based mining.
Mining can be done in two ways. One is solo mining which requires you to put in a lot of effort as well as resources on mining. You may not be able to mine a block as fast as you wish and will find rewards coming in very slow However, you get the complete 100% reward. Alternatively, and a highly recommended way is to join a bitcoin mining pool. In a mining pool, several individuals join hands and contribute. The block is completed faster and rewards flow in more consistently.
How the cloud mining service works:
Cloud mining is a bitcoin mining service that enables the miners to do their mining without the need to invest in any expensive hardware. The service is provided via the internet. In cloud mining, the processing power is shared over remote data centers. You only need a computer and a fast Internet connection. You will require a bitcoin wallet to store your coins.
Benefits of cloud mining:
There are many advantages of bitcoin mining services using the cloud technology.
- Since The mining equipment is managed and maintained by the cloud providers you can go ahead without worrying about the technical aspects and put your full focus on your mining.
- There is no upfront investment that you need to make on hardware infrastructure or software licenses.
- Cloud offers more reliability and minimizes downtime.
- There are no additional electricity costs that you need to pay for. You do not have to provide for additional cooling solutions or cater for ventilation systems as you would have in your in-house data center or computers. There is no noise too as you experience with the humming sound that the fans cause.
Totally secure with data encryption:
Initially, people were hesitant to utilize the cloud technology because of data security. However, the bitcoin mining services providers have ensured there is no breach of service or any online fraud by the internet fraudsters and the cybercriminals. All the transactions that happen are encrypted at the source before they are transmitted. This ensures that the information, even if intercepted, does not make any sense to the fraudsters. You must share some percentage of the profits or pay a transaction fee to the service providers. this adds up to the expenditure of the miners.
Types of bitcoin mining services:
In case you do not wish to do mining on your personal computer, you have three other options. One is to lease a server and work on it with a reliable hosting provider, second is to build a virtual server where you can install your own software and thirdly, the most cost-effective and reliable way, is lease some quantity of hashing power without any physical or virtual machine. Several miners have been unable to cope up with the increasing mining difficulty. It comes in useful for the first-time miners since they may not be aware of the technical aspects to manage the mining on their own.
Use mining calculators:
The mining calculators are designed to give you an estimate of profitability if you are using your own hardware infrastructure. However, you can still apply them even if you are using the cloud-based bitcoin mining services. In the electricity expenses, you must write the fee you are paying the service provider since the energy bills are paid for by the host.