Cloud Mining Vs Hardware Mining for Bitcoin: Which is Better?

by | Jun 13, 2018 | Bitcoin, Cryptocurrency, Mining

Cloud Mining | Hardware Mining | Bitcoin Mining | CLoud Mining advantages | Cloud mining disadvantages

Cloud Mining Vs Hardware Mining

Cryptocurrency mining has undoubtedly become a real trend since 2015. Hundreds of thousands of miners all over the world use various ways to mine bitcoins, mine litecoins, ethereum, dash, and other digital currencies. All of them want to find the cheapest and at the same time the most profitable sources of mining. Gone are those days when Bitcoins could be mined through CPU’s or home computers. Advanced Technologies and sophisticated hardwares are required now to mine Bitcoins or even other cryptocurrencies. Hence the most important question arises in present scenario’s is Which way to choose for Bitcoin Mining ? Cloud mining or hardware mining? 

Each of the mining ways has its own advantages and disadvantages. Let us have a closer look at the question which is the best type of mining cryptocurrencies and understand which is better, Hardware Mining or Cloud Mining.

(Note: Although major high priced cryptocurrencies could not be mined through CPU’s now, but there are some cryptocurrencies which can be mined through CPU even now and which has potential for significant price rise in future. Here is a “List Of Cryptocurrencies For CPU Mining | Best CPU Mining Coins“)

Nowadays, Bitcoin is the most popular cryptocurrency used as an alternative to traditional payment systems. All Bitcoin transactions are verified by miners and in return they are rewarded with free Bitcoins for providing their resources. This process is known as mining of Bitcoins.

Bitcoin Mining is is done by bitcoin mining softwares that accesses the CPU’s processing capacity to solve transaction-related algorithms. Originally, bitcoin mining was conducted on the CPUs of individual computers. Nowadays, to have enough processing power, Bitcoin mining or mining of anyother cryptocurrencies is done in big data centers.

What is Cloud Mining?

Cloud Mining is the process of mining bitcoins or other cryptocurrencies by utilizing a remote datacenter with shared processing power.

In simple terms, an organisation set’s up mining rigs and maintains the facility by themselves. You just need to simply register and purchase the mining contracts of the organisation by depositing some fees. Once your fees is deposited and your contract initiates, the mining company will allocate it’s mining hardwares to your account and all the rewards generated by that mining rig would be tranferred to your account. The mining company will obviously deduct some fees before transferring your rewards to your account.

Depending on the terms of the contracts you may have to pay additional fees for electricity and/or maintenance often on a daily basis that gets deducted from your mined coins or you pay for that upfront. Some services even advertise Lifetime contracts for Bitcoin mining (or other crypto currency), but there is a catch with these as by the lifetime they mean that it will mine until it generates profits.

What is Hardware Mining?

Hardware mining means that you by yourself buy your own mining equipment and supervise all the necessary operating costs, liabilities, and setup fees. Mining itself consumes much energy. Moreover, hardware mining is very noisy depending on hardware type and brand. Therefore, hardware miners often join in groups to use various equipment to mine cryptocurrencies efficiently. Hardware mining is much more exciting but a more expensive process. You need to buy all the expensive stuff by yourself. Sometimes, the delivery can take weeks. Also, you need some technical expertise to set up mining rigs.

Mostly, all the hardware miners joins the Bitcoin mining pools or cryptocurrency mining pools. By joining the pool, miners combines their resources and becomes one entity in the mining network. Also, mining pools generates more rewards as compared to solo mining as mining pools generates more hash rates.

Here is a list of “Best Bitcoin Mining Pools” , which you can join to earn more rewards.

To break it down for you easily, here the advantages and disadvantages of Cloud Mining over Hardware Mining, so that it’s easier you to decide.

Advantages of Cloud mining over Hardware mining

  • Cloud mining is going to cost much cheaper than hardware mining as it requires lesser maintenance.
  • As soon as you purchase a contract for cloud mining, you can start mining that very minute without having to wait in line for hardware to become available and no long shipping wait times.
  • Cloud mining has a constant hash rate, which will not decrease over time due to declining efficiency of hardware or environmental factors. Typical cloud mining contracts last 2 years, which is expected life span of any mining hardware assuming it is running non stop.
  • Coming to space issues, Cloud mining is 100% space effective as it doesn’t occupy physical space, doesn’t create noise and requires no maintenance or initial set up on your side, therefore a lot of financial resources are saved on this part.
  • Other mining activities like cooling mining machines, dust cleaning, performance monitoring.
  • According to most hardware miners, it’s difficult to expect to become profitable within 3 to 6 months. 10-15 months is realistic for many, though. A lot depends on crypto prices, electric costs, and the type of mining rig you use.
  • Efficient and automatic mining pool management, which would require a lot of your own time to do with custom set up.
  • There is no risk of ordering wrong mining rig parts or breaking them in the process of set up or while they are working.
  • Daily payouts (automatic or manual)

Disadvantages of Cloud Mining over Hardware Mining

  • Cloud mining has higher initial cost compared to purchasing your own hardware, however this gap is decreasing due to high demand and low availability of GPU’s and ASIC’s.
  • Apart from the mining companies that operate using frauds, most hardware mining companies like Genesis Mining or Hash Flare are good and tested.
  • Hardware mining tends to require more research and thus results in miners being more educated about cryptocurrencies they mine and block chain in general.


Hardware mining and Cloud mining, both have their own advantages and disadvantages. It’s hard to say which is the best form of mining and it totally depends upon the preferences and technical comfort of person to person. If you are technically sound, go for hardware mining but if you aren’t cloud mining is better option, although it will fetch you less returns.

Also, some people believes that mining cryptocurrencies are not profitable enough and one should Buy and hold it instead of mining it. If you are also confused, I suggest you read this article:- Bitcoin Mining Vs Buying Bitcoins, Which Is More Profitable?

Rohit Kukreja

Rohit Kukreja is a Commerce graduate with Financial Markets expertise involving Stocks, Forex, Futures & Options Market and now Bitcoins & Cryptocurrency Markets. Blockchain Enthusiast but not a techie, Rohit is an active member of various Blockchain & Crypto communities all over India.

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