If you would like to obtain a large number of Ether coins quickly, the fastest way to do so is to visit an exchange and buy the coins. In addition to buying coins, you can also mine them. You can do so by purchasing your own equipment or renting it. Leasing a dedicated machine is known as hosted mining. There is also virtual hosted mining, meaning that a provider will lease memory and computational power on a virtual level.
In addition to investing in a hosted solution, you can become a member of a cloud mining pool. You may not be familiar with cloud mining, but it is very likely that you use one of cloud storage services or applications such as Dropbox, Apple iCloud, or Google Drive. These cloud services work in a similar way to cloud mining.
When you sign a mining contract, a service provider manages mining equipment and facilities and you do not have to buy and hardware to mine Ether tokens. For this reason, cloud mining is an excellent way to go if you are new to mining and want to try for yourself how it works.
There are a lot of different cloud mining services for major coins and virtually all altcoins. Typically, you will buy a site-specific token that gives you rights to a certain level of hash power. The more tokens you buy, the higher the level.
Benefits of cloud pool mining
Cloud pool mining has five large benefits compared to buying your own hardware. The first benefit is the size of the upfront investment. When mining coins on your own, you will usually need to spend a lot of money buying your own hardware. Becoming a member of a cloud mining pool costs much less.
The second benefit is that cloud mining pools can give great deals to their members because they buy in bulk, be it space for the hardware, hardware itself or energy. It works in the same way as it does when you buy household items in a local pharmacy store versus a family club store such as Costco. A family club usually offers much better deals because you are buying more.
The third benefit of investing in a cloud mining rig is that you will not have to listen to the noise of the hardware.
The fourth benefit is that you will not have to do any hardware maintenance. Your service provider will do all the work.
Finally, many providers of cloud mining services offer no downtime guarantee. They are able to do so because they usually own and run a lot of equipment and for them replacing hardware that stopped working is not a big deal.
Profitability of mining
On the Ethereum network, profitability of mining depends on the same two factors as on the bitcoin network. These factors are costs of electricity and costs of buying or renting hardware. The prices of cryptocurrencies are currently very volatile and just like the prices of coins returns from mining activities can vary significantly. However, if you have the right kind of hardware and access to energy at reasonable costs, you can make a fairly good income with Ether mining.
The Ethereum network uses a different algorithm to verify the validity of transactions and add blocks to its blockchain that the Bitcoin network does. For this reason, Ethereum mining doesn’t require ASIC hardware needed for bitcoin mining.
Some people would argue that it makes Ethereum more beginner-friendly when it comes to mining, but as the popularity of the network keeps growing, it is likely that the network will head it the same direction as bitcoin in terms of miner competition and market saturation.