⭐ Features

Cryptocurrency Cloud Mining vs Hardware Mining

  • George Shnurenko
    ⭐ Features

    The battle of cloud mining vs hardware appears to be in favor of good old hardware mining

Cryptocurrency Cloud Mining vs Hardware Mining
Cover image via u.today

Disclaimer: The opinion expressed here is not investment advice – it is provided for informational purposes only. It does not necessarily reflect the opinion of U.Today. Every investment and all trading involves risk, so you should always perform your own research prior to making decisions. We do not recommend investing money you cannot afford to lose.

Bitcoin, Ethereum, Litecoin, and other less popular altcoins are now generating an immense level of buzz among crypto enthusiasts and this has caused the adoption of different cryptocurrencies to surge. Although the concept of mining coins is very appealing, there’s often the debate about which offers more profitability, cloud mining or hardware mining?

To really drive the point home, let’s understand what mining is all about.

What is cryptocurrency mining?

Before a cryptocurrency transaction can be carried out, it must be verified on the Blockchain network.

The process of validating the transaction on this network is known as mining and those in charge of the operation are referred to as miners.

As easy as this process sounds, it is a lot of work. In order to mine, a software which is able to compute cryptographic algorithms is required and to complete this, an enormous amount of computing capacity is needed. At the inception, mining was done on personal computers, but now, individual computers do not suffice.

And this is one of the drawbacks of hardware mining. It is quite expensive and almost impossible to execute individually. However, cloud mining is fraught with fewer risks and doesn’t require an exorbitant amount to start up.

Since the issue of money appears to be a pressing one. Let’s consider the cost of starting up cloud mining vs hardware mining.

Cost of hardware mining

Hardware mining requires a significant initial investment. Some of the factors which influence the cost of mining are discussed below.

  1. Mining Rigs

  2. The hash rate of the Blockchain network

  3. The cryptocurrency being mined

  4. The cost of electricity

  5. The cost of cooling

  6. The physical space

The list goes on and on. Also, depending on how powerful you want your mining operation to be, the cost can go up significantly. Do you require an ASIC mining rig? One thing you’ll need to consider is that these cannot be repurposed. The implication is that if the cryptocurrency you mine decides to alter its hash algorithm, that signals the end of the mining rig.

In addition to this, most people start out with multiple mining rigs so as to justify the revenue they generate at the end of the day. You also need to consider the electricity cost where you stay and how much it’ll cost to cool your equipment.

Cost of cloud mining vs hardware mining

In comparison to hardware mining, cloud mining appears to be simpler to compute. Some of the most popular cloud mining services, Genesis Mining and HashFlare, offer a monthly subscription model for users to purchase. This model is computed based on the cryptocurrency you intend mining and the hash rate of the network.

Cloud mining gained popularity simply because of the obvious limitations of hardware mining- only very few people can afford large data centers.

This new model then allows individuals to invest and purchase a part of a company’s mining power. Then, cryptocurrency is being mined without the issue of electricity bill, storage space or cooling equipment.

ROI for cloud mining vs hardware mining Ethereum

The battle of cloud mining vs hardware appears to be in favor of good old hardware mining and the reason for this conclusion will be delineated shortly.

We gathered sufficient information from reviews, several online ROI calculators, and cryptocurrency fora and we were able to come up with a definitive approach to assessing the ROI of cloud mining vs hardware mining.

It was discovered that ideally, after 10 to 15 months of constant mining, a miner who deals in hardware mining should recover a significant portion of the amount invested and should move on to the profit-making period.

Considering the fact that there are areas where electricity costs are low and the weather is halcyon, the time it takes to recoup investment might be about six to eight months. One thing to note is that cloud mining vs hardware mining offers two different sides to the story.

While hardware mining is initial investment heavy, cloud mining is all about recurring expenditure. The cost of purchasing a two-year contract for cloud mining ETH is about $1,520 at 40MH/s while it is as high as $12,960 at 360MH/s.

The time it takes to break even was recently calculated to be almost 11 years for BTC. Genesis Mining for ETH even demonstrated a worse ROI. It was estimated that it’ll take approximately 25,992 days for an average person to break even.


10 Popular Cloud Mining Sites in 2019 - Updated

10 Popular Cloud Mining Sites in 2019 - Updated

Advantages of cloud mining

In view of the seemingly unfavorable time it takes for the operation to become profitable, what are the positives we can draw from cloud mining?

  1. You can begin mining with very little knowledge about the Blockchain technology

  2. It is possible to start mining immediately you decide to. There’s no delay associated with purchasing the hardware or shipping cost.

  3. There’s no decrease in hash rate with time. This also means that environmental factors do not cause a decline in efficiency.

  4. The pool management system is automatic and doesn’t take up your time

  5. Cloud mining incurs very little additional maintenance cost. It only requires you to purchase a subscription model and stick to it.

  6. You can get a daily automatic payout if you desire.

  7. It’s easier to expand your mining operation by increasing your subscription model. This is unlike hardware mining where you are required to discard your old equipment and then purchase new ones

Advantages of hardware mining

  1. Requires significant initial cost but eliminates recurrent expenditure

  2. There’s no way to fall victim to numerous cloud mining scams

  3. It is believed to be more lucrative.


Hardware mining vs cloud mining 2018 is one of the most talked about topics. This is a topic where experts and cryptoanalysts take different sides, arguing about the cloud mining vs hardware mining profitability. Whichever technology you decide to employ, you’ll need to devote significant time and effort to carry out more research.

Join our Telegram channel to get news even faster!

About the author

George Shnurenko is a Bitcoin and cryptocurrency enthusiast, financial analyst and writer. He's majoring in history but he believes that the digital currency which has taken the world by storm will bring about change to all us humans. 

👓 Recommended articles
📰 News

Top Bitcoin Miner Warns – Bitcoin’s Privacy Features Are ‘Quite Poor’

  • Yuri Molchan
    📰 News

    The head of a major Bitcoin mining pool says that Bitcoin privacy is weak and must be improved to prevent BTC from avoiding governments’ clampdown

Top Bitcoin Miner Warns – Bitcoin’s Privacy Features Are ‘Quite Poor’
Cover image via www.123rf.com

The CEO of one of the largest BTC mining pools, Poolin, has recently stated in an interview that Bitcoin privacy has to be improved. The current privacy features make BTC vulnerable to potential regulatory bolt tightening, says he, as reported by Forbes.

The Poolin mining company was set up by several former employees of BTC.com – a world’s major mining pool, a subsidiary of Bitmain. Among them was the Poolin’s current CEO Kevin Pan.

“Bitcoin’s privacy features are quite poor”

Over the past years, developers have suggested several ways to improve Bitcoin’s privacy. However, those were rejected by the community, since they would hard such major things as security, scalability, etc.

A good example here is Confidential Transactions that were among those suggestions. They disguise the amount of BTC sent in transactions. However, the integration of it was rejected, since it could have had a negative impact on the public verifiability of the present BTC supply.

Kevin Pan says that privacy is much more vital for a crypto asset development than scalability. Pan says:

“There is no other big question if the privacy issue is solved.”


Ripple Dispels XRP FUD Allegations, Q3 Report Blames Twitter Bots

Ripple Dispels XRP FUD Allegations, Q3 Report Blames Twitter Bots

Governments may start controlling BTC miners

The company CEO believes that in theory, authorities or law-enforcement agencies may start telling miners to block certain address from receiving funds or sending them. However, in that case that would have to be 51 percent of the BTC network.

Pan believes that unless a solution to this problem is found soon, governments will get a chance to prevent transactions to certain addresses from happenning.

“What is more troublesome now is if government or law enforcement departments begin to create a blacklist of transaction addresses, it will make certain transactions unable to be packaged.”

“In fact, these can be done. But if there is privacy, you can't know who the address belongs to, and you can't determine how much the amount is, and there is no way to control the currency system. So for me, Bitcoin is basically no problem if the issue of privacy can be solved.”


Bitcoin Block Number 600,000 Was Mined — What Does It Mean for the Crypto Industry?

Bitcoin Block Number 600,000 Was Mined — What Does It Mean for the Crypto Industry?

China plans to clamp down on BTC miners

Previously, U.Today reported that Inner Mongolia, an autonomous region of China, plans to ban all the numerous mining pools located there soon.

Since this region is one of the biggest local crypto mining areas, some believe that China is about to ban mining of all cryptocurrencies ahead of the so-called ‘China Coin’ launch.

Do you think that poor Bitcoin’s privacy features could indeed bring down regulatory control over BTC one day? Feel free to share your view in the comments section!

Subscribe to U.Today on Facebook, and get involved in all top daily cryptocurrency news, stories and price predictions!

About the author

Yuri is a journalist interested in technology and technical innovations. He has been in crypto since 2017. Believes that blockchain and cryptocurrencies have a potential to transform the world in the future. ‘Hodls’ cryptocurrencies. Has written for several crypto media. Currently is a news writer at U.Today.

👓 Recommended articles

This site uses cookies for different purposes. Please set your preferences in Cookie Settings and visit our Cookie policy for more information on how and why cookies are used on this site. Click here for cookie policy

Cookie settings