News

08/07
26,791
Overview of Cloud PoW and PoS Mining Overview of Cloud PoW and PoS Mining

Many have heard about the mining of cryptocurrency, but not everyone understands the essence and possibilities of cloud mining, which opens new prospects for those who want to make a profit.

The essence of cloud mining is that the user leases technologies and capacities of special equipment installed in remote data centers to receive appropriate gain in the form of a cryptocurrency. The whole process of mining takes place on servers and does not require additional costs.

At the moment, there are two most popular directions for remote mining: PoW and PoS cloud mining. Let’s consider each of them.

Initially, the mining of digital currencies was carried out under the PoW (Proof-of-Work) algorithm, according to this technology the first cryptocurrency was created, in which network security is guaranteed by the computing power of the participants. The likelihood of generating the next block from an individual miner in PoW mining is highly dependent on its processing power. As the cryptocurrency became more popular, the level of interest increased and, accordingly, the complexity of the process as well as the threshold for entering the mining market became too high due to the increased cost of equipment and electricity. In the context of minimizing costs, the technology of cloud mining has become relevant. As a result, a lot of services (pools) appeared, on which the user pays a fixed cost for capacity. Thus, the user gets not only the possibility of renting expensive equipment, without the cost of maintenance and depreciation, but also reduces the risks associated with breakdowns, consequently reducing the profits of the mining farms. However, no one will give a guarantee that with this kind of mining you can get profit, or will even cover your costs.

At the same time, more and more coins began to make an entrance where mining is based on PoS (Proof-of-Stake) technology. The idea itself was born in 2011 and a year later PoS Mining was implemented in one of the cryptocurrencies operating on the PoS algorithm. The essence of PoS mining is the concept that instead of capacity, it uses cryptocurrency. That is, to operate you do not need to connect any equipment, and all that is necessary is to have a cryptocurrency in your wallet. In PoS mining, coin mining proceeds on the basis of the share volume – the larger is the share, the greater is the opportunity to mine. Since not everyone can keep their wallet in the network for 24 hours, this problem is quickly resolved with the help of pools of depositors accepting various cryptocurrency or, in other words, using cloud-based PoS mining. The terms of this kind of mining also became attractive for those miners who have a small share, since when connecting small shares into the pool, the chance to mine is higher than separately and the profit is divided among all pool members in proportion to their shares. To some extent, PoS cloud mining can be called the investment. This method makes it possible to mine coins without any serious risks.

As of today, cloud-mining technologies are leading in the speed / productivity ratio.