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Excerpt
Hosted mining is a process where a third party hosts your mining rigs. They offer a service of taking care and running your specialized bitcoin mining hardware in optimal conditions.
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Hosted mining is the process where a third party hosts your mining rigs. They offer a service of taking care and running your specialized bitcoin mining hardware in optimal conditions as well as offering cheap electricity rates. Lets dive into everything you need to know before investing with a hosting provider.
History
Bitcoin mining has come a long way, from being something you could do on your old laptop to becoming a fierce industry that requires top-notch equipment and lots of money. This has pushed a lot of people out of the game, which is why hosted mining, or "colocation," has become a popular alternative. But, believe it or not, colocation has been around since before Bitcoin. A "colo" is basically a location where you can rent space for your servers, networking hardware, and other tech stuff. It's not just for crypto--regular businesses can also benefit from improved security, better reliability, and lower costs compared to hosting their own equipment on-site.
When it comes to Bitcoin/crypto, you buy the mining rigs (usually straight from the hosting company) and then pay a monthly fee based on how much power the rig uses. The hosting company takes care of electricity, rack space, security, customer service, and monitoring. You usually have to commit to a certain amount of time, and if you want to get the machine before that time is up, you might have to pay a penalty.
Pros & Cons
Hosted mining is attractive to prospective miners for a number of reasons, primarily for the accessibility, convenience, and peace of mind. Hosting models often present better mining economics for clients as the hosting provider procures mining rigs in bulk and partners with enterprise-level colocation sites, passing the benefits of economies of scale on to their clients. Hosted miners can mine more profitably in a low BTC price/high network difficulty environment than home miners.
The convenience afforded by having a single service handle every detail of the mining process makes hosting the preferred option for many prospective miners. Users can find comfort knowing their machines are safely mining without any input required on their part. This leaves users to focus only on the revenue they are receiving, rather than the stressful work that goes into maintaining those revenues. Hosted mining turns mining from an activity into an investment.
However, there are some drawbacks to hosted mining. Users are placing their trust and the reliability of their machines in the hands of someone else, which can be a drawback in the event that the provider becomes unresponsive or does not serve the client's best interests. Additionally, most hosting providers require KYC during onboarding, which deters some users who prioritize privacy above all.
Alternatives
In addition to finding a hosting facility, there a number of other options all with its own pros and cons. While we tend to believe hosting is the best option for most people, home mining and split-shares is definitely worth taking a look at. Cloud on the other hand is not our favorite…
The chart below helps paint a picture for the terms of each:
ㅤ | Hosted Mining | Cloud Mining | Home Mining | Split-shares |
Hardware Owner | You | Cloud Provider | You | Share provider |
Hosting Term | 1-5 year contracts | Varies by provider | N/A | Typically 1 year |
Location | Anywhere | Typically Outside U.S. | Anywhere | Anywhere |
Uptime | Typically 95%+ | Varies by Provider | Varies | 99% |
Client Services | Phone line, email, ticket systems | Email/chat support | N/A | Phone line, email, ticket systems |
On-Site Repairs | Typically yes | N/A | N/A | Varies |
Convenience | High | Very High | Low | Very High |
Conclusion
In conclusion, hosted mining is an alternative to traditional bitcoin mining that offers accessibility, convenience, and peace of mind to prospective miners. It allows users to invest in bitcoin mining without having to deal with the expenses and considerations that come with traditional mining. However, users should be aware of the potential drawbacks and make sure to partner with a reputable provider.
If you’d like to get started with your own mining operation, check out our listings from verified sellers across the globe.
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