In this guide, I will walk you through everything there is to know about Bitcoin Cash cloud mining. I’ll tell you which are the best cloud mining sites for BCH, what you need to know about cloud mining, how it works, and how you can start mining Bitcoin Cash with it.
In terms of crypto mining, Bitcoin Cash (BCH) is currently the most profitable coin on the cryptocurrency market. Being a hard fork of Bitcoin (BTC), it employs the very same algorithm as that of the Bitcoin network. The only difference is that BCH has a larger block size and a different mining difficulty factor. Thus, most Bitcoin mining rigs can be used to mine Bitcoin Cash.
As a result, it is not uncommon to find Bitcoin cloud mining services having an option to mine Bitcoin Cash. This is because their mining operations are the same, save for the end product.
Let’s start with taking a look at the best BCH cloud mining sites.
The 7 Best Cloud Mining Sites
The following are the 7 best cloud mining websites in their respective niches:
Best for diverse offerings. ECOS provides a 180-day money-back guarantee on their Antminer S ASIC hardware. It provides a one-month free trial and a very low withdrawal threshold of just 0.000001 BTC.
Best for high-level security and reputation. StormGain is a UK cloud mining company known for very tight security protocols. The only downside is that it currently supports only the Bitcoin family of coins based on the SHA-256 algorithm.
Best for reputation. Binance is a big name in the cryptocurrency industry, being the largest cryptocurrency exchange. Thus, the risk of being scammed is extremely low.
Best hashrate marketplace. NiceHash is well-known in the cryptocurrency mining sector. If you are looking to buy contracts, here you can find great deals.
Best for hosted mining machines. BitDeer specializes in the provision of hosted mining equipment.
6. IQ miners
Best for leased hashing power. Run by a big pool of reputable professional experts, IQ Miners renders professional advisory and consultancy services in the cryptocurrency mining sector.
Best for Hosted cloud mining equipment. Bemine gives you a 3-day free trial period on their Antminer S19 Pro ASIC hardware. It has a referral program and lets you pay via credit cards including Visa and Mastercard.
Why cloud mining?
Well, cloud mining is not the only option for mining Bitcoin Cash. Apart from solo mining, one can also join a mining pool and still be able to gain mining rewards. Why then should one opt for cloud mining as an alternative to these two other methods?
The following are the main reasons and benefits that make cloud mining BCH a great option:
1. Quick to get started
All that is required for one to get started with cloud mining is to sign a cloud mining contract with the cloud mining company. After that, one can access it from a web browser or a mobile app to check progress reports.
2. No technical knowledge is required
To set up a mining rig, you need some technical knowledge. This is not the case with cloud mining. In cloud mining, you outsource that technical work to the cloud mining provider.
3. Low capital requirement
The biggest capital requirement is buying mining equipment. In cloud mining, this cost is borne by the service provider. You only get to pay for the hash power. The initial investment is very low, thus lowering the barrier to entry.
4. Low setup costs
The bulk of the setup cost is borne by the third-party provider. The only setup you require is that of your mining account.
5. Low management costs
One big challenge of setting up your own mining rig is the cost of managing it. In cloud mining, this cost is outsourced to the cloud mining service provider. The only management role you carry out is to make appropriate investment decisions based on reports provided by the cloud mining company.
6. Low running costs
Running costs are incurred during day-to-day mining operations. Since most of the running costs such as power supply management (including power outages, surge protection, power backups, etc.), monitoring mining operations, repairs and maintenance, and environmental management are done by the cloud mining services provider, you are hardly involved. You only get to pay for the computational power.
7. Low risk of obsolescence
When it comes to technology, the biggest risk is the risk of obsolescence. For example, most Bitcoin miners use Application-Specific Integrated Circuit (ASIC) as opposed to video graphics cards since they have a higher hash rate. Because a given ASIC hardware is designed for a certain specific mining algorithm, it cannot be used to mine other coins. For example, a Bitcoin Cash ASIC miner cannot be used to mine Ethereum Classic.
What happens when a certain coin is no longer viable to mine or ceases to exist? That ASIC hardware becomes obsolete and you lose your capital investment.
With cloud mining, this risk is borne by the service provider. You simply switch to a coin that is viable to mine.
8. Economies of scale
Cloud mining services are global. A typical cloud mining company will set up its mining platforms in data centers that are strategically located, especially where the cost of electricity is low. They can easily scale up as their clientele base expands.
On a personal level, you can also scale up your mining operations since you don’t have to incur the cost of buying expensive hardware. The money that you would have otherwise expended on buying expensive mining hardware can be used to pay for higher computing power.
The benefits of economies of scale include:
- Lower power consumption – as the mining company scales globally, the company can choose to set up mining farms in places where the cost of electricity consumption is lower.
- Lower hardware costs – since a cloud mining company can buy many mining rigs in bulk, the company has higher bargaining power and can get lower prices per rig due to volume discounts. Furthermore, buying in bulk means that the company can buy directly from the manufacturers thus avoiding the cost of middlemen. A portion of this cost saving can be received by cloud miners.
- Lower taxes – with global outreach, a mining company can set up its mining rigs in a free economic zone in various countries thus avoiding the cost of taxes. In most cases, a free economic zone also has lower power costs.
How cloud mining works
Cloud mining refers to the use of cloud infrastructure to carry out mining operations. Like other cloud services, the cloud miner doesn’t have to own the hardware.
To appreciate how cloud mining works, let’s explore the various cloud mining models, the nature of cloud mining contracts, and profitability factors.
1. The cloud mining models
There are two main cloud mining models:
(a) Hosted mining
Hosted mining has two main forms:
(i) Dedicated hosted mining
In this model, you rent an entire mining rig that is hosted in a remote data center. It is similar to renting a dedicated server in the traditional sense of hosting. Thus, you can choose your preferred mining rig such as AntMiner S19 Pro, and your preferred software such as the Awesome Miner.
The hosting provider does the setup, hardware configuration, and maintenance while you are in charge of running the mining rig. The hosting provider may charge you a maintenance fee depending on the contract.
(ii) Virtual hosted mining
This operates similarly to Virtual Private Server (VPS) hosting. In traditional VPS hosting, you get a share of the server’s resources including the processor, RAM, storage disk, and IP address. Similarly, in virtual hosted mining, you get a share of the mining rig’s computing power dedicated to you as if it is a standalone mining rig. It operates as a full mining rig but virtual.
(b) Leased hashing power
In this model, cloud miners aren’t concerned about the hardware. All they are concerned with is the hash power. Cloud miners’ concern is about how much output they get from the leased hashing power.
This is the most ideal model for novice crypto miners and those cloud miners who have no time to manage the day-to-day mining operations.
2. Hashrate marketplaces
Hashrate marketplaces are more like the traditional derivatives marketplaces. In this case, cloud mining contracts work like derivatives. Buyers and sellers meet at these marketplaces to exchange contracts.
Hashrate marketplaces are highly competitive and thus one is more likely to strike the best deal. However, scamming remains a big challenge and buyers must exercise due diligence by gauging the reputation of the seller.
3. The cloud mining contract
The following are key elements of the mining contract that you should pay special attention to:
- The mining model – while we have two main types of mining models, their features are not homogenous. They vary from one service provider to the next. Confirm that the features that you are looking for are indicated in the contract to avoid being short-changed on performance.
- The contract duration – if you are new to cloud mining, or you are onto a new service provider, it is ideal to go for a short contract duration. While it is rare, go for a three to six months contract, if available. Afterwards, you can renew for a longer duration. The duration also depends on the cloud mining model. The Leased Hashing Power model can tolerate a shorter duration compared to a Hosted Mining model. You may need to try out the Leased Hashing Power model before eventually settling for the Hosted Mining model.
- Hash power rating – Hash power is the real deal. It is what you are asking for. Make sure that the price per hash rate is within your budget and is competitive.
- Vitiating factors – most contracts have terms that would end the contract if certain conditions aren’t met. It is common for some cloud mining contracts to specify that the contract will terminate if a new block hasn’t been established within 90 days. This also depends on the cloud mining model. It would be in your interest as a cloud miner not to be bound by such limitation, or if it must, the duration should be as long as possible.
4. Profitability factors
What factors influence the profitability of your mining operation? The following are the key profitability factors:
- The cloud mining model – some models are more expensive than others. A more expensive model will chew a bigger chunk of your profit.
- The cost per hash – the higher the cost per hash, the lower the profitability.
- The hash power – the higher the hash power, the greater the potential to earn a block reward. However, it also means the higher the cost of mining. Thus, you have to balance the two.
- The prevailing market conditions – the market value of your block reward depends on the demand side factors in the market. On the other hand, the mining difficulty factor depends on the supply side factors in the market. For example, the more people join the mining venture, the higher the mining difficulty factor will be. A higher mining difficulty means more hash power will be expended to solve the complex mathematical problems thus increasing the cost of mining while lowering profitability.
- The block reward – different cryptocurrencies have different block rewards. For example, the block reward for mining a BTC is several times higher than that of mining a BCH.
How to start cloud mining
The following are the key steps involved in the process of cryptocurrency mining in the cloud:
1. Choose your provider
The following are important things to consider while choosing your cloud mining service provider:
- Reputation – do your own research on a potential service provider, including customer reviews, independent expert reviews, years of experience, customer base, and the volume of transactions. Have a shortlist of the 3 best service providers and move to the next step of evaluating their respective offerings.
- Offerings – given the same quantity and quality of offering, go for a provider with the best rate.
2. Enter into contract
Some of the main items in a contract include:
- Hashing algorithm
- Hash rate
- Duration of contract
- Exit terms
3. Start mining
How fast you will start mining depends on your chosen cloud mining model. With a leased hashing power model, the mining process starts immediately. However, for hosted mining and virtual hosted mining models, mining begins after the setup is done.
4. Monitor your mining operations
The monitoring interface depends on the cloud mining model and the service provider. A hosted mining model will have more hardware parameters in the reporting than a leased hashing power model. The hosted mining model will also have a command-line interface which the leased hashing power model will not have.
You can monitor mining performance through a web browser interface or mobile app interface. A report on various mining activities is provided on these interfaces.
5. Reap the rewards
In the process of signing up, you have to provide a wallet address. Thus, once your mining reward reaches your desired threshold, you can withdraw it from the cloud mining platform to your digital wallet.
With so many hosting solutions available, it can be difficult to determine which one is the best fit for your mining operations. Which one do you trust and does it make sense to outsource your machines to them or will they scam you? In this review, I will look at the top Bitcoin mining hosting providers. I will tell you the pros and cons of each so that you can make your own decision about which one best suits your needs. Read more.