What is Cloud Mining?
Cloud mining is the process of outsourcing computing effort into cryptocurrency mining, which is the process of using powerful computers to mine coins such as bitcoin, litecoin, and dogecoin.
Understanding Cloud Mining
Rather than purchasing expensive machines to mine these coins, you can hire the computing power of a specialized miner from a cloud mining company located anywhere in the world.
Furthermore, when you pay for cloud mining services, you are renting a portion of a large pool of processing power, which means you are more likely to outperform other, less powerful bitcoin miners who are racing to develop a winning hash that would earn them bitcoin.
Cloud mining only applies to proof-of-work systems, such as Bitcoin and the original Ethereum blockchain, which use computational brute force to mine new coins.
Proof-of-stake systems, which allow people who lock up a quantity of currencies within the network to participate in validating new blocks and earn newly generated cryptocurrency in return, are not covered by cloud mining. However, several staking services, such as Ethereum 2.0, Solana, and EOS, let you to delegate your coins to other validators in exchange for a percentage of the revenues, which is functionally equivalent to cloud mining.
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