Cloud mining

Cloud Mining is the process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of mining allows users to mine bitcoins or alternative cryptocurrencies without having to manage their own hardware. Since Cloud Mining is provided as a service there is generally some cost and this can result in lower returns for the miner. There have been some scams involving cloud mining.

Types of Hosting

Users of hosted Mining equipment can either lease a physical mining server or a Virtual private server and install mining software on the machine. Instead of leasing a dedicated server, some services offer hashing power hosted in data centers for sale denominated in Gigahash/seconds (GH/s); Users either select a desired amount of hashing power and a period for the contract or in some cases can trade their hashing power.

Pros and Cons

There are several advantages over the normal home-mining.

Pros:

Cloud

In meteorology, a cloud is an aerosol comprising a visible mass of liquid droplets or frozen crystals made of water or various chemicals. The droplets or particles are suspended in the atmosphere above the surface of a planetary body. On Earth clouds are formed by the saturation of air in the homosphere when air cools or gains water vapor.

Cloud types in the troposphere, the atmospheric layer closest to Earth's surface, have Latin names due to the universal adaptation of Luke Howard's nomenclature. It was formally proposed in December 1802 and published for the first time the following year. It became the basis of a modern international system that classifies these tropospheric aerosols into several physical forms which can be found at various altitude levels or étages.

Bitcoin

Bitcoin is a digital asset and a payment system invented by Satoshi Nakamoto, who published the invention in 2008 and released it as open-source software in 2009. The system is peer-to-peer; users can transact directly without an intermediary. Transactions are verified by network nodes and recorded in a public distributed ledger called the block chain. The ledger uses bitcoin as its unit of account. The system works without a central repository or single administrator, which has led the U.S. Treasury to categorize bitcoin as a decentralized virtual currency. Bitcoin is often called the first cryptocurrency, although prior systems existed. Bitcoin is more correctly described as the first decentralized digital currency. It is the largest of its kind in terms of total market value.

Bitcoins are created as a reward for payment processing work in which users offer their computing power to verify and record payments into a public ledger. This activity is called mining and miners are rewarded with transaction fees and newly created bitcoins. Besides being obtained by mining, bitcoins can be exchanged for other currencies, products, and services. Users can send and receive bitcoins for an optional transaction fee.