The crypto mining dilemma: go virtual
or stay physical?

Are you thinking of getting into crypto mining? The main dilemma that all newbies in crypto mining face is whether to opt for cloud mining or go for physical mining machines. Mining, in today's world, is not just about making big bucks, it is about making more big bucks! Therefore, the decision between cloud mining and physical mining is a major one. Without any hassle, you want to earn more and ensure greater profits with mining. Having said that, let’s understand the two aspects better here.

Understanding the basics

Before diving into the differences, let’s understand each process better. Cloud mining involves renting mining power from a remote data center. On the other hand, physical mining involves the purchasing of mining rigs and hardware. While cloud mining involves no maintenance as the mining company does everything for you, physical mining involves proper maintenance and high electricity costs as well!

Initial outlays

Upfront outlays are the main consideration before selecting either method. In cloud mining, no hardware purchase is involved, but contract outlays are present. You can purchase a contract for a set period, generally a year and you have to prepay for the mining power! The actual prices of these contracts vary but can cost you some hundred to thousand bucks, depending on what mining farm you select.

In contrast, if you are opting for physical mining, you need to be a rig, preferably an ASIC miner. You also need to make sure that an appropriate power supply is being facilitated and cooling solutions are also available. A high-end ASIC miner can cost quite a big amount!

Running outlays

Do you think that just setting up a rig or getting a subscription is enough? No, you need to ensure appropriate maintenance of everything.

However, when it comes to cloud mining, maintenance is not an issue, as there are no electricity outlays or any other worries. Nevertheless, there are certain mining services that might deduct maintenance fees from your earnings.

High electricity outlay is on the cards the moment you opt for physical mining. From power consumption to maintenance and repair of hardware, the entire onus is on you and you need to ensure proper maintenance of your mining machine for enhanced profits.

Profitability over time

Cloud mining ties your earning potential and profitability to the contract that you sign! You have signed a contract, where the return you will get is mentioned. So, even if the price of crypto increases, you don’t get more profits, you get only what was mentioned in the contracts. Sounds like a real loss, doesn’t it? Besides, you might face hidden costs that eat away an even bigger chunk of your profits over time. You might also end up losing a lot of your profits if the prices drop due to the contract!

On the other hand, in physical mining, full control over your setup is yours! With the increase in the price of crypto, your profits are higher, as you are mining more valuable coins. However, if the market crashes, you can see a sharp decline in profits! Nevertheless, you can choose to pause mining when the markets are not conducive as you have full control.

ROI

With cloud mining, you start earning from day one, as there are no hardware outlays involved! The length of your contract determines the breakeven point, along with the price of crypto and any hidden fees. You may never hit profitability if the market does not perform well enough.

Contrarily, the breakeven period is longer in physical mining as a lot of hardware costs, cooling costs, and electricity costs are involved. Nevertheless, once you break even, all the profits that you make are totally yours to relish.

Potential risks

Legitimacy of the service provider is the biggest risk as scams abound in this domain. There are companies that take your precious bucks and disappear. Sounds scary, right? With legitimate providers, profitability might be less as fees might be on the higher side.

In the case of physical mining, hardware might become obsolete as more powerful rigs are hitting the markets constantly. However, you own your own machine, and reselling it is an option!

The flexibility factor

You have zero flexibility if you are choosing cloud mining. You have a contract and have to make sure that you stick to that contract always. However, physical mining gives you the option of upgrading your hardware, switching to mining different cryptocurrencies and even pausing mining whenever you want. A more flexible choice, isn’t it?

Environmental concerns

Crypto mining impacts the environment in a widespread manner and both cloud mining and physical mining have their role to play. Even though cloud mining farms claim that their source of energy is mainly renewable sources, you have no control over the same! In physical mining, the control is completely in your own hand and you can select the energy source yourself!

Which one should you choose?

Are you someone who is happy with lower returns and doesn't want to take any hassle? Then cloud mining is the perfect choice for you! All you need to do is select a reputable service provider, which is not a scam and you can sit back and enjoy!

However, for individuals who are looking for maximum control, higher long-term profits, and greater flexibility to market changes, physical mining is the ultimate option you have! It might take time, but if done properly, the results are amazing!

Final thoughts

Want more profits and greater flexibility in mining? Make sure to select physical mining, as it offers greater flexibility. You are responsible for all your mining decisions and actions. Besides, you get a higher profit and are not bound by a contract. However, if you are a person who does not like taking risks and hassle, cloud mining is your ultimate choice. Always remember that cloud mining means that you have a contract to abide by and a large chunk of your profits might not even be available to you! You also do not have the chance to switch between profitable coins or even pause mining operations temporarily to avoid poor market scenarios! So, which mining type is suitable for you?