How Does Cloud Mining Bitcoin Work?


What is Bitcoin?
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How to Store Your Bitcoins
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Is Bitcoin Legal?
Who is Satoshi Nakamoto?
How Bitcoin Mining Works
How to Set Up a Bitcoin Miner
What are Bitcoin Mining Pools?
How Does Cloud Mining Bitcoin Work?
How to Calculate Mining Profitability
How to Make a Paper Bitcoin Wallet
What is the Difference Between Litecoin and Bitcoin?
How to Buy Litecoin
How to Mine Litecoin and other Altcoins
Understanding Bitcoin Price Charts
Bitcoin E-Commerce Services for Merchants
Bitcoin Glossary

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If you want to invest in bitcoin mining without the hassle of managing your own hardware, there is an alternative. You can use the cloud to earn your coins.
Put very simply, cloud mining means using (generally) shared processing power run from remote data centres. One only needs a home computer for communications, optional local bitcoin wallets and so on.
However, there are certain risks associated with cloud mining that investors need to understand prior to purchase.
Pros

Here’s why you might want to consider cloud mining:
A quiet, cooler home – no constantly humming fans
No added electricity costs
No equipment to sell when mining ceases to be profitable
No ventilation problems with hot equipment
Reduced chance of being let down by mining equipment suppliers.
Cons

Here’s why you might not want to consider cloud mining:
Risk of fraud
Opaque mining operations
Less fun (if you’re a geek who likes system building!)
Lower profits – the operators have to cover their costs after all
Contractual warnings that mining operations may cease depending on the price of bitcoin
Lack of control and flexibility.
Types of cloud mining

In general, there are three forms of remote mining available at the moment:
Hosted mining
Lease a mining machine that is hosted by the provider.
Virtual hosted mining
Create a (general purpose) virtual private server and install your own mining software.
Leased hashing power
Lease an amount of hashing power, without having a dedicated physical or virtual computer. (This is, by far, the m