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Understanding cloud mining

Discussion in 'CryptoCurrency' started by Troad77, Jan 20, 2016.

  1. Troad77

    Troad77 Newbie

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    What is Cloud Mining?

    To understand this concept, we need to introduce some definitions. The phenomenon of cryptocurrency grows day by day and now, many people accept cryptocurrency and other cryptocurrencies as if they were provided by a government. Today, many market exchange cryptocurrency for many other traditional currency. Traditional currencies were based on the amount of gold (for example) that the country has. Cryptocurrencies are essentially the same, but in a virtual way. To mine cryptocurrencies, your device will analyze bitcoin transactions based on an algorithm. The action to try to resolve a transaction is called hashing. So to have access to a cryptocurrency, you have two ways to get them which are go to a market and buy cryptocurrency or purchase equipment and start mining.

    Each cryptocurrency has its own settings. The Bitcoin, for example, has a maximum number of specific pieces that will be discovered in his life. This maximum creates an unusual effect and this is what creates value. To control the number of devices mining Bitcoin, they will make the transactions more difficult to solve. Today, with increasing difficulty resolving operations, mining cryptocurrency exploitation requires special equipment that needs a lot of electricity, maintenance, space and cooling system. With cloud hashing you buy a power contract and let the experts make of accommodation. You receive your part of Bitcoin extract in a day, depending on the amount of energy you are hashing.

    What are the risks of mining and extraction clouds?

    Like any other currency, the value of the currency can go up or down ... If you start cryptocurrency mining, you have to consider that. In addition, the difficulty is another thing to think about. The transaction will be more difficult to resolve, it will be harder to receive cryptocurrency. So for the same amount of energy today, it will be possible to receive less income in the future. Finally, some people wondering if the cryptocurrency cease to exist. Obviously, we think this will never happen. But please, before you start mining and become a new member of the world of cryptocurrency, do your own research and your own idea.

    What are the risk of mining?

    Like any other product offered on the web, giving money to an organization still poses a risk. In this gold rush, we listen to bad history of certain people with bad ideas. You can always go on various blogs and try to make things clear about the organization. Mining cryptocurrency, as explained before, need maintenance, cost of the device and the cost of electricity. The research and development goes well, and the device is always better in their hashing rate / Watt consumption. If an organization offers below cost, they probably pay the electricity on the old contracts with money from the new contract, the day that people stop buying contract will become the day that you may lose yours. Again, you should do your own research and your own idea.

    What kind of cryptocurrencies I can use?

    Many different cryptocurrencies exists. Everyone decided which algorithm will be used to exploit their parts. The most popular algorithm is called SHA-256. The popular Bitcoin (BTC) use this algorithm to produce coins. But other cryptocurrencies also use it. Another algorithm is called Scrypt. Many cryptocurrencies use this algorithm. The LTC is scrypt based and can be transferred to BTC on the exchange market. Many other algorithms exist and it is easy to do research on this. But the key is to understand that you must exploit the good algorithm if you want to operate a specific cryptocurrencies.
     
  2. BTCnet

    BTCnet Newbie

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    Almost every cloud mining site end up in scam , stay away from it like the plague