How to build a passive income stream from cloud mining?
Cloud mining is the process of mining cryptocurrency without the direct use of mining equipment or hardware. The process allows users to mine Bitcoin or altcoins without having to manage their own resources.
Related: What is an altcoin? A beginner’s guide to cryptocurrencies beyond Bitcoin
In traditional crypto mining, cryptocurrency is produced through a computational process. Miners need to solve complex mathematical problems using mining hardware to be rewarded with coins. The process of cloud mining is similar, but instead of using their own resources, miners rent or buy resources from a service provider.
As more players entered the cryptocurrency scene, mining became more complex, requiring more computing power. For this reason, many people who used to mine crypto using their own hardware now find it unsustainable due to high electricity costs and the wear and tear on their hardware. Cloud mining has therefore become an attractive option.
In cloud mining, third-party providers rent out computing power to miners. This means miners don’t have to invest in their own resources, which generally requires a large upfront investment. Cloud mining also removes the need for miners to maintain and update their own equipment.
How it works is that the service provider buys or builds a mining rig and then rents out the hashing power to miners. The cryptocurrency mined is then sent to the miner’s wallet. In most cases, the service provider will also offer a mining-as-a-service solution, which allows miners to outsource the management of their mining equipment.
As for the mining process itself, it’s pretty similar to how cryptocurrency mining works. Transactions are verified and added to a blockchain, thereby creating new coins. Each
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