October 26, 2021

BlogCoinz

Cryptocurrency and Technology

Cloud Mining: Is it worth it?

Who in the crypto space doesn’t want to earn as much BTC as they possibly can? There are several ways to do this, CPU/GPU mining (slow), ASIC mining (Great if you have newer ASIC but high electric bills), Faucets mining (really slow), Browser Mining (also slow), Geo Mining (Kinda a new concept I’m still looking into), and Cloud Mining. Yeah, there are lots of ways to mine bitcoin and crypto currencies but some are more worth the investment than others and today we are going to be using HashFlare to look at Cloud mining.

First, lets answer the question what is cloud mining. To understand this first you must know what the cloud is. Its renting space or resources on someone else computer. That’s all it is, your google drive is just space on their servers sitting in a data farm somewhere. So, as you may guess, Cloud Mining is just renting someone else hash power to earn crypto. The upside is obvious. No maintenance, no electric bill, and no real hassle with having to make sure your machine is running and configured properly at all times. Sounds great but there are many, many downsides.

Now, let’s look at the cost. Even though its listed out of stock hash flare is a good baseline. So, Hashflare offers 10 GH/s for 60 cents for each 10GH/s. According to a mining calculator, I’m using that’s about 9 cents per month or $1.08 per year. This means it takes a little over 6 months to recoup your investment before you start making capital. During a bull market, this could work well but you are risking a lot on a bull market as when the price drops it becomes harder to recoup your initial investment. (Last time I did the math it took 8 months to recoup so it changes depending on the market). I asked a friend who did hash flare and he said he made .7 BTC from a 1-year contract. This sounds great but if he took that same money and DCA during the bear market he would have over 2 BTC.

Lets talk about the second downside. Hashflare (and others) can cancel your contract at anytime for any reason. They actually did this at the bottom of the bear market but reactivated the contracts a few days later. If you have 1000s invested in cloud mining that could be a huge risk.

Personally, I don’t find cloud mining to be an acceptable risk but I do see its appeal. I also would rather mine off my own equipment that I can control and take offline and online whenever I want. At the end of the day make sure you are calculating cost vs reward and determine if its right for you. I did that and found that it is not right for me and I believe it’s not right for most if not all people.