Cloud mining is a viable path to earning passive income– as long as you know what to mine.
Making money off of mining Bitcoin is a tough endeavor even for the best miners and many are ultimately unprofitable. These days, you’re better off making money mining alternative currencies than the crowded Bitcoin. They usually have less competition and positive returns. Now cloud mining services are offering a variety of coins that you can choose to dedicate your rented hashpower to mining.
Cloud Mining Provider
There are several sites that offer cloud mining right now and promise ever-higher returns. It is very important to consider reputation and longevity when selecting a site for cloud mining as you will need to feel confident the site will be in operation months or even years down the road to ensure a return on your investment.
Many sites are simply scams where they promise exceedingly high returns from mining but are really only operating a large Ponzi scheme. Look for transparency in pricing and do your own math when it comes to calculating the value of the currency you’re earning in relation to that price.
After surveying the field extensively, Genesis Mining stands out to me as a website with a good reputation, an easy-to-use interface, and great customer service. I’ve looked for complaints and mostly only found people upset the money they spent mining Bitcoin wasn’t profitable– something they could have figured out for themselves if they had just done the math.
(Note: If you enter code FDCAI8 when purchasing hashpower, you will receive 3% off your entire purchase. This code will also give me a portion of your purchase in hashpower. Entering this code is entirely optional.)
Tresorio also appears to be an up-and-coming competitor. Based in France, which has some of the lowest energy costs in the world due to their usage of renewable and nuclear power, it offers many cheap contracts. However, since it is new, it does not yet have a proven track record that is important when deciding where to invest in what could be a lengthy pay-out period.
Doing the Math
Prices are constantly changing and impacting the viability of mining contracts. You have to anticipate that over time currencies will change in value and paying top dollar to be locked into a single currency that doesn’t pay out for over a year could be risky.
Thankfully there is a handy tool to make comparing cloud mining contracts easy.
Cryptocompare has a large selection of the most popular contracts and does the math for you. Be sure to sort by “Payback Period” in order to see those that will offer the fastest return on your investment.
My philosophy is to look at the contracts that pay back the fastest and are a reliable currency you think will retain or improve its value at the end of your payout period. Once you have cleared your initial investment, everything you mine from that point is pure profit and you no longer have to worry about drops in value destroying your contract.
Services like Genesis Mining that allow you to change the coins you’re mining mid-contract also help mitigate the risk involved in purchasing a currency contract.
Currencies like Dash, Zcash, and Litecoin are likely to be better bets for being profitable faster compared to Ether and Bitcoin. Another benefit of these coins is they are likely to experience larger growth in the short term.
It may be tempting to look at long-term growth in Ether and purchase a mining contract to stock up on it over time seems reasonable. However, don’t be allured by mining for the sake of mining.
There are many times where straight up purchasing a currency you believe in can outweigh the usefulness of mining. Why bother waiting to collect a similar amount of currency over hundreds of days after paying $1,000 USD when you could get a similar amount immediately and take advantage of it appreciating in value?
Making cloud mining work is all about securing the right contract, for the right currency, and at the right time. Thankfully Cryptocompare’s tool and Genesis Mining’s flexibility help take a lot of that risk out of the process, leaving profit for those who are patient.