Hosting for mining

Technical Features

From a technical standpoint, a data center can house an ASIC or a farm. There are several features:

• Constant monitoring. Administrators monitor the status of components and notify the client of any technical problems.
• A set of tools for fixing things. Technical support is available.
• Provision of additional components. If the client lacks hashrate, the service can provide him with additional devices.
• Performance enhancement. Hosting can provide hardware at a reduced wholesale price.

Pros and cons of hosting mining

When choosing a hosting service, you need to understand the risks and benefits. The main factor is the level of reliability of the service.

Main disadvantages

When renting equipment, the user trusts a third party. An unreliable data center can steal or corrupt components. Dependence on hosting is the main disadvantage. It is necessary to choose a company with a security guarantee.

Customers can take their equipment back. However, additional costs will be incurred when returning it. Some hosting companies require payment of penalties for early termination of the contract.

There is a global risk. Data centers promote the centralization of miners. This is a concern for the blockchain community as more and more capacity is located at specific companies. For example, 60% of all crypto traffic was handled by 3 telecom operators in June 2022.

Benefits

Hosting is attracting interest from potential miners because of three reasons:

• High level of accessibility. It is enough to find a site and pay the rent.
• There isno need to keep an eye on the hardware. The administrators of the site are responsible for the components.
• Increased hash rate. A data center can provide high-performance mining equipment.

Companies have access to low electricity rates compared to residential areas. Miners can increase profits by saving on utility bills. Such a price is not available to cryptocurrency miners working from home. For example, the cost of electricity in Moscow for individuals is 6.43 rubles in December 2022. And from January 1, 2021, tariffs for data centers are reduced by 30-50%.

Types of cloud mining

Hosting for mining can be confused with mining cryptocurrencies on rented capacity. However, there are two types of cloud mining: Virtual Hosted Mining and Leased Hash Power.

There are many scammers in the cloud mining industry. Before renting capacity, you should research the reputation of the company.

Some users consider hosted mining as a subspecies of cloud mining. However, in a data center, cryptocurrency miners rent space, not hashrate.

Virtual Hosted Mining is a hybrid approach to cryptocurrency mining. The user uses personal equipment, and part of the hashrate is leased from the data center.

Leased Hash Power – this is cloud mining in its standard form. Miners rent a portion of the hashrate that is generated by a farm installed at the data center. They subscribe to the company’s tariff to get a share of the profits.

The best equipment for efficient mining

When looking for mining equipment, you can consider factors such as price, algorithm processing speed, performance, and power consumption. Hash rate is the main indicator, it indicates how many calculations per second a computer can perform when solving complex math problems to generate new blocks.

Energy efficiency – the level of electricity consumption, it is measured in watts. This calculates the farm’s income and expense, taking into account utility rates.

The hardware produces different hashrate results. This may depend on the algorithm. There are services to boost mining revenue.

Binance Pool

With Binance Pool, the exchange creates a comprehensive platform for miners. The platform is designed to increase productivity in cryptocurrency mining.

All miners’ revenues are distributed among the pool members using the FPPS revenue sharing model for BTC and PPS+ for ETH, which increases profits by about 5%.

The full share payout (FPPS) method is similar to the PPS method. Both algorithms pay a standard transaction fee along with rewards. Miners make a profit regardless of whether the pool finds a block or not.

IQ Mining

The IQMining platform is a cloud-based mining and margin trading platform for Forex, options, and cryptocurrencies. The service offers capacity rental with payment in 100 types of digital assets and tokens.

One should study the reviews of the platform on the internet before choosing a platform. The terms of the company may be disadvantageous for miners.

There are cloud mining services with a minimum hash rate of 300 MH/s. Cryptocurrency trading requires a deposit of $250 or more. There are commission for deposit, maintenance and withdrawal fees.

Hashing24

Hashing24 has been operating since 2012, headquartered in Ireland. Their hardware provider is BitFury. The company is blacklisted.

The platform only supports bitcoin mining. The user can customize the amount of processing power they would like to buy, as well as the contract time.

The platform has a tutorial on the official website. It describes the principles of the service. The platform has a calculator to calculate the potential income.

NiceHash

NiceHash is a marketplace for buying and selling computer processing power. A user can sell his computing power. Also, each participant can rent hashrate and use it to mine coins.

The buyer can choose which cryptocurrency to mine. The service supports 34 algorithms, including SHA-256, Blake and Equihash. In addition, you can connect to one of the 23 pools available through the site.

MinerGate

MinerGate is a pool for cryptocurrency miners. Computing power rental is available for users.

To use MinerGate, you need to download software from the platform’s website. You can use a smartphone application. Coin mining on a mobile device is available. In addition, the service supports mining on the CPU.

How to choose the best hosting for miners

It is necessary to choose a mining hosting by the level of trust in the service. The services may seem similar. You need to study the reports of the companies to choose a reputable service among them. Price and reputation are the key differences among the services. Security is preferred over price.

It is better to choose a region with a favorable electricity tariff. The Irkutsk region is a leader in the affordability of utilities, where the price per kilowatt is just over 1.42 rubles in December 2022 for individuals.

It is necessary to choose a platform with service support. Specialists will monitor the serviceability of the devices. It is better to choose services with round-the-clock control.

Another important factor is the presence of a cooling system. Temperature can cause the breakdown of mining equipment. Components during the work of the algorithm use maximum power.

How to start mining in the cloud

To avoid fraud in cloud mining, you need to work with reputable platforms. Unknown services offer more favorable conditions. But this is associated with risks.

After choosing a service, you need to set up the software. The process consists of four steps:

1. Software customization. You need to choose a special software. There are free programs that are compatible with different types of mining equipment and can work on most operating systems.
2. Selecting a pool. Co-mining increases the chances of rewards. The profit generated is distributed among all users according to a predetermined formula.
3. Tariff plan and contract. It is necessary to familiarize yourself with the terms of the lease. It is also necessary to choose the most profitable subscription of the service.
4. Creating a cryptocurrency wallet. You can use an already existing one. It will be used to receive remuneration.

Risks of cloud mining

Cloud mining is an unsafe sphere in the field of cryptocommunity. There are a lot of scammers in it. Even large services can take advantage of the user’s inattention when studying the contract.

Services attract beginners with the simplicity of work. However, it is better not to use cloud mining without special knowledge in the industry. This threatens to lose the invested funds.

The miner has no ownership of the mining equipment. Consequently, there is no control over the components, which is used in cloud mining. This applies to the characteristics, hash rate and other data. The user only receives the information that the service has provided to them. It may turn out that there are no devices and the founder of the site is fundraising.

The service provider offers hashing power. However, the contract does not guarantee the miners a profit.

In addition, additional fees in favor of the service provider during the term of the contract, may reduce the profit of the miners. There is also the risk of information service fees. This is a frequent type of fraud where the provider provides the user with data without other obligations.

Blacklist of hosting for mining

Among cryptoprojects there are fraudulent services that deceive users. The black list of undesirable platforms for December 2022 is presented in the table.

Conclusions

The cryptocurrency sphere can be dangerous for novice miners. It is important to understand the intricacies of mining algorithms. Having knowledge of the blockchain, it is easier to identify fraudsters.

When selecting a service, you need to take into account the reputation of the site. At the time of choosing hosting mining, you can ignore the cost of services in favor of the authority and reliability of the platform.

Frequently Asked Questions