Cloud mining has become a popular way to invest in cryptocurrency mining and it has now replaced pool mining as the most common way to do it. It’s a great way for investors to start mining Bitcoin if they don’t have the equipment needed to do it on their own.
It’s important that the investors carefully consider different platforms and be informed about the process before making a choice and deciding on a provider. This can end up being worth your while since there are a lot of differences between different services.
The major benefit
The main reason to consider cloud mining is the fact that it doesn’t require any initial investment. You don’t need to buy or understand the equipment involved in the process of mining cryptocurrency. It’s done by the provider and all that you need to do is to have an account set up on the platform.
The cost of the equipment has skyrocketed recently, and it’s becoming more complicated to use as well. That’s why many investors choose to have less profit and let the others do the job for them.
A pool of providers
There’s a large pool of providers out there now since the market is booming and more investors are looking into cloud mining as an alternative. This means that you need to make sure that the provider you’re planning to work with is trustworthy.
Sites such as Truely.com allow you to compare and contrast the reviews and learn from the experiences of those who have used the services before you.
It’s a long-term contract and therefore it’s best to investigate the service in detail before you start using it.
Don’t be fooled by promises
Sometimes cloud mining platforms tend to promise a lot to their clients. One of such promises is usually about how much they can earn from Bitcoin. That’s something that a platform isn’t able to deliver on. They can only let you know how many coins you can mine, but the value of the coins is determined by market forces that the platform can’t affect.
There have been dips and ups in the value of Bitcoin, so you can expect that to continue as well. In the long run, Bitcoins are great for storing value since their value goes up over the years.
How to use the dashboard?
The dashboard is the interface you’ll interact with as a cloud mining investor. That’s the only thing that you need to deal with when it comes to the actual mining process. It’s simple enough to use, and it shows how much you’ve mined and what speed you’re working with, and how much the coins are worth at the moment.
This interface can also be used to withdraw the funds from your account to your e-wallet. Connecting the wallet with your cloud mining account is easy enough and you can do it as soon as you set up the account itself.
Taxes on Bitcoin income
Income made from Bitcoin cloud mining is now taxed as any other investment would have been. That’s due to the change in overall policy towards Bitcoin and how widely accepted it is now. It’s somewhat of a downside because it cuts into your income, but it also shows that the process is legit.
The cloud mining platform will usually handle that for you since they can easily prove how much you’ve mined and how much you’ve withdrawn. Dealing with the tax authorities is up to the investors, however.
Learn about the performance
One of the most important things to know about a cloud mining platform before you start using it is how fast it can produce a coin and therefore how many coins you can mine during the length of your contract. This is information that the platform needs to provide and it should help you decide on using their services.
If you notice that a platform is kind of shady or secretive about the IT solutions that they have and use, it’s best not to use their services at all, just to make sure that everything is transparent.
Selling the contract
Some cloud mining providers allow you to sell a contract. This can be paid for in Bitcoin or in fiat currency and you basically transfer the ownership over a contract to a person you’re selling it to. It’s a quick way to earn some money and to get out of the contract if it doesn’t seem to be working out anymore.
Not all cloud mining providers will offer this option and those that do tend to be a bit more expensive. The way out is worth the extra cost, however, since it can come in handy if things don’t work out for you.