In my spare time, I enjoy discovering new trends and reading up on the latest updates on equities and cryptocurrencies. In this article, I will be focusing on cloud mining. While cryptocurrency is an industry with much controversy, I urge readers to keep an open mind while reading as I seek to be impartial in delivering my findings. With that said, lets explore how we can mine cryptocurrency for FREE!
While I am bullish on decentralized finance (DeFi) and cryptocurrencies, I present my findings in this article in an unbiased stance where I objectively weigh the pros and cons of cloud mining. I strongly encourage readers to conduct their own due diligence before stepping into the world of cryptocurrencies.
Bryan Tan – Author
Traditional Mining vs Cloud Mining
By now, I’m sure we’ve all seen videos/images of mining farms where we’ve got thousands of GPUs running underground or at some super cold edge of the planet. Fortunately for us, there is now a new alternative called Cloud Mining.
In essence, think of Cloud Mining as “renting” your computer to someone else and in doing so, you will be able to mine some crypto but the yield would usually be less than what could be generated from Traditional Mining.
While the comparisons between the two can be lengthy, here is a brief summary of their key differences,
| Traditional Mining | Cloud Mining |
|---|---|
| Capital Intensive | No installation or set up costs |
| Space, Heat Electricity | Significantly lower yield |
| Requires in-depth knowledge | Cost may exceed gains in the short term (Electricity) |
| Higher Yield | |
| No guarantee of profits | No guarantee of profits |
We will be focusing on cloud mining and how my experience has been on the unMineable platform.
With unMineable, it is really as simple as opening the app, adding your wallet address, selecting some simple options and from there, the process is done.
You can leave the app running in the background and it’ll just quietly generate your selected cryptocurrency.
While it all sounds well and good, there are legitimate concerns to the profitability of cloud mining.
My Real Cost of Cloud Mining
Based on the rate at which I have been mining dogecoin in the past 12 hours, I would have actually LOST money if I was using the computer strictly for cloud computing and nothing else. Lets look at the numbers:
Dogecoin mined in 1 hour = 0.06 Dogecoins. (What I have experienced in past 12 hours, ran on high and on my GPU, RTX 2060)
unMinable will allow payment once 30 dogecoins have been mined which based on 0.06 dogecoin/h, this would require a total of 500 hours. Take note that unMineable takes 1% mining fee therefore with this factored in, you will require a total of, 505 hours of mining to generate 30 dogecoins.
- Electricity Cost per hour = $0.08 aprox. based on Sp Group (based on SP Group Electricity Calculator)
- Electricity Cost to generate 30 doge : 505 hours x $0.08 = $40.40
While the numbers above may be subjected to fluctuations such as price of dogecoin, FX, platform fees etc, for the purpose of this calculation we will proceed with what is known at the time of writing where dogecoin is trading at $0.32.
Therefore, at present if you were able to sell 30 dogecoins at $0.32 you would have earned $9.60 in revenue. In the event where you switched on a computer specifically for cloud mining (without doing anything else), you would have incurred a total of $40.40 worth of electricity charges.
$9.60 (Market price of 30 Dogecoins) – $40.40 (Cost of 505 hours of Electricity) = -$30.80
Metrics in Summary – Based on mining of 30 dogecoins and 505 hours needed to do so.
With this perspective, Cloud mining is clearly a waste of time as we are at the mercy of the price of dogecoin as well as the electricity charges.
Therefore, based on the case presented above, the only way for cloud mining to generated reasonable gains is either for the cost of electricity to drop, or for dogecoin to experience an exponential increase in price.
In the case of the mined cryptocurrency experiencing an exponential increase in price, this is really anyone’s guess as it is something that we cannot control. It has happened before where in the case of bitcoin, if you were mining this back in 2014 where price was around $1000 USD/BTC, you now be able to sell it at over 50x.
Based on the numbers presented above, we would need dogecoin to increase by at least 5x from its current price for a 20% profit. Will dogecoin get there? Your guess is as good as mine.
Dangers of Cloud Mining
If you’re bullish on cryptocurrency in the long term, these metrics can easily be disregarded. However apart from profitability, cloud mining does have other dangers which I have identified as follows,
1. Virus Alert!
Your anti-virus WILL block unMineable as there has been many cases of cryptojacking in the past. Therefore so long as your computer has a virus protection software installed, it will by default detect unMineable as a virus.
You will need to manually allow this software into your computer. Some users may not be comfortable with this however I have been unable to find any other way around this. Therefore the use of unMineable is really subjected to the user’s level of comfort.
Cryptojacking is the act of hijacking a person’s computer to secretly mine cryptocurrency.
AVG
Based on my usage thus far, I haven’t detected any irregularities. I would validate unMineable based on how the community has come together on this. In my opinion, I would say that there is a very low likelihood that unMineable contains virus of any sort.
2. Choice of Cloud Mining App
The example which I have used in this article is unMineable. The reason I’ve done so is how this platform has received quite a reasonable amount of support from members of the cryptocurrency community.
I would think that support from users is definitely something which adds validation to any cloud mining platform. Having said that, readers are encouraged to do their own due diligence when selecting a platform.
One of the best ways to make sure you have a reputable service is to look on industry news sites, forums, and reddit sub-forums to check out lists of cloud services and customer feedback on them. Many times, you will find that people will post about their experiences with different services, exposing scams or detailing why a service may be legit.
bitcoin.com
There are other applications for cloud mining such as Skycoin labs & Genesis Mining however such platforms may require you to part with some capital to begin with. Though they are also trusted and have been in the market for some time now, unMineable is still recommended as you are not required to set aside any capital to start.
3. Be careful of Fraudulent Activities
If the platform requires you to pay any fees before you commence, I would strongly advise caution before proceeding. There have been many cryptocurrency related frauds in the past and they come in many forms.
There is always a chance of your chosen cloud mining company going bust and if you have not withdrawn your mined crypto before that happens, there is a chance that you might lose it all. Therefore, do withdraw your mined crypto whenever you can as once it is in your wallet, it is yours.
So long as you deposit your mined cryptocurrency into your personal crypto wallet, there is little room for you to lose any money.
Author’s Tip
4. Toll on your Computer
The toll which cloud mining may take on your computer may not reveal itself instantly but as with everything else, the more you use something, the more you can expect it to degrade.
I’ve looked into this briefly and the main reason which can cause your computer to degrade quickly is its ability for heat dissipation. While this can be influenced by several factors such as the degree of air circulation within your computer, a general rule of thumb is that if your computer is getting too hot (by feel), it may not be suitable for cloud mining.
For more advanced users, you can always download softwares like MSI Afterburner that’ll indicate the current temperature of your computer.
Concluding thoughts
I would say that the best thing about cloud mining is really the relative ease of entry into the whole mining scene. Traditional mining would usually involve more hardware, research and capital which can often be a deterrent to new entrants. While cloud mining generates less yield than traditional mining, I feel that it is a reasonable trade off, given how accessible it is.
In terms of the electricity cost, I only run unMineable when I am using my computer for work/gaming. This would allow me to easily write off the electricity cost incurred during cloud mining.
It is unlikely that cloud mining will generate any significant gains in the short term given the relatively slow rate of mining. Readers who are looking to participate in cloud mining should look at a longer-term horizon for their gains to fully actualize.
I will be posting Part 2 of this article once I’ve mined 30 dogecoins to provide readers with an update on the payment process.