Those who want to profit from bitcoin look into bitcoin cloud mining. But is cloud mining profitable? Find out how easy it is to make money with bitcoin mining!
What is cloud mining? You could buy expensive computers that can only make a small amount of bitcoin. Or you can rent out the machines and utilities as a bundled package, referred to as “cloud mining”.
But is cloud mining profitable? If you’re still not even sure what Bitcoin is, watch this quick video.
You’ve seen ads and read articles that bitcoin cloud mining is the new way to make money from bitcoin. But can you make a real profit using the cloud to mine bitcoin or is the company making all the money off you?
Cloud mining is most appealing to Bitcoin beginners. All you have to do is pay your fees and can take home some profit. It’s important to remember what those fees are going towards.
The computers you’re renting need a lot of maintenance. Because you’re not doing the manual labor, an employee of the company has to. This is all factored into the fees you pay in order for the cloud mining company to make a profit.
But how does cloud mining work? Why would a mining company offer the profits from machines they’re running? Those are good questions.
bitcoin cloud mining
Beware of Shady Bitcoin Mining Companies
Many of bitcoin cloud mining companies are shady or even scams. Most often paying off old investors with new investors’ money. Ponzi schemes aren’t all you need to watch out for as a new bitcoin cloud mining investor. Some common scams include:
Bitcoin Wallet Scams: Your Bitcoin wallet stores all your virtual money. Scammers will pose as legitimate wallet companies and steal any deposits you make.
Phishing Scams: Emails sent saying you have won Bitcoin ask for access to your wallet. Never give anyone access to your Bitcoin wallet.
Exchange scams: Scammers will offer to exchange your money for bitcoin with low fees. After they have your credit card info, your money is gone.
“How Much Money Can I Make?”
So now that you know a few things to watch out for, you still want to know is bitcoin cloud mining profitable? Of the few legitimate companies, the best case scenario is breaking even at about 1 year 3 months.
And that’s if nothing in the bitcoin market changes. Bitcoin changes by the minute, so counting on everything to stay the same for over a year is impractical.
So why is bitcoin cloud mining so hard to make a profit with? This article will explain why trying to make money with cloud mining is a losing battle.
So, Is Cloud Mining Profitable?
Here are a few things to consider when answering that question:
Maintenance and electricity fees (MEF): The charges your rented mining hardware rack up eat up the majority of your profits.
Changes in the value of Bitcoin are constant. In a perfect situation, you won’t break even until well over a year. If the value drops off you still have to continue paying the same monthly fees regardless of your income.
According to most real-life accounts, it’ll take around 10 years for you to break even.
“Can I Buy My Own Equipment?”
Yes, you can buy cloud mining equipment. Is it a good idea? Only if you plan on mining being an expensive hobby.
There is one main benefit of buying your own hardware, or rig as they’re known in the mining community. You make one large investment rather than pay a company monthly fees. But keep in mind that you will need to continue to update your system. Electricity costs will also take a chunk of your profit.
Also, the wait time for your equipment to arrive can be several months. Your rig will already need upgrades to keep up with mining difficulty.
Which brings us to the next reason mining on a small scale is a bad idea.
Mining Today Is Harder Than Ever
Mining bitcoin gets harder as more coins go into circulation. Cloud mining profitability will continue to drop. The reason for this is at the core of what makes Bitcoin work.
If you’ve researched Bitcoin at all, you’ve heard of the blockchain. Blockchain sounds complicated but it represents a simple concept. When you buy something with Bitcoin, blockchain technology locks it up so no one can change it.
Locking these transactions away is what miners do. In exchange for making these past transactions secure, they get paid in new Bitcoin.
The problem is the math needed to add to the blockchain gets harder the more coins get released. There are a finite number of bitcoin. This is why we’ve seen such huge growth in value over the past few years.
Cloud mining was born as an attempt to level the playing field for beginners. The computing power needed to mine has become so immense, household rigs can’t handle it.
The Birth of Cloud Mining
So cloud mining companies started popping up everywhere. These companies take advantage of the public’s new interest in Bitcoin. They promise easy profits with minimal investment.
But the truth is even industrial miners have thin margins. Attempting to compete at an individual level is rarely profitable. When it is, it is not enough to replace your income.
One tool that visualizes how much money you can make is a bitcoin cloud mining calculator. You can set all the stats of your cloud mining power and see what your profit will be. The lower power packages companies sell almost always lose you money after all the fees.
Since your rental fees stay the same, a slight dip could wipe out your profits. Or worse, put you in the negative. With your own rig, you can keep mining without the markup the company takes. You can still lose money when the value is down but to a lesser extent.
Is There Any Way to Make Money from Bitcoin?
The best way to try and make money from Bitcoin on a small scale is buying and holding until the value has gone up. It may not sound as exciting as bitcoin cloud mining, but it’s a better use of your money.
Buying bitcoin is much easier than trying to mine fresh coins. But remember that Bitcoin is still a volatile investment. You could lose all the money you’ve put into Bitcoin if the value drops.
So, is cloud mining profitable? Don’t count on it to replace your day job anytime soon. It can be an interesting way to learn about Bitcoin if you are an enthusiast. But if you want to profit off Bitcoin, treating it like a stock is a better idea than trying to make your own coins. Learn how much to invest in Bitcoin today.
