This bear market is substantially affecting everyone in the Blockchain industry, including miners.
As suggested by a recent press release from Cointelegraph, individual Cryptocurrency miners are finding it difficult to keep up with massive mining firms like Bitmain, who seem to continue to succeed, even in the face of sharply falling Crypto prices.
Because of this difficulty that individual miners are facing, one can logically conclude that there is a place for a company that aims to help these individuals out.
Enter Hashtoro, which claims to provide a cheap and profitable cloud mining solution. Before we dive into what Cointelegraph says about Hashtoro in their press release, keep in mind that press releases are paid for and therefore, highly biased.
Because this is true, it is important to look at any press release, especially in the Crypto space where scams are almost commonplace, with a critical eye.
Firstly, Cointelegraph starts their piece by introducing cloud mining to the average reader who might not understand what it entails as a business.
They directly claim that it is basically a plug and play solution for the everyman and everywoman to become a successful Crypto miner without having to own or understand how to use any specialized technical equipment.
At face value, this is true, given that all of the technical work is normally done by the cloud mining provider, in these cases. Behind the scenes, difficulties still exist for both the consumers and the provider.
Judging by industry reports on the subject, many cloud mining providers can be scams simply due to the understood fact that customers find it hard to prove the existence of their supposed mining facilities. Doing so should be as simple as asking the company to prove what they have and receiving an acceptable answer. Though ideally this would mean physically being able to see the location, making such information public poses its own problems like the risk of mining firms being robbed.
Because of this, it is not unreasonable to decide in the end that you are not comfortable with any cloud mining business, though if you are still interested, arguably, a true utility exists in this niche.
As mentioned above, cloud mining theoretically makes the mining of Cryptocurrencies more of a fair space because it enables almost anyone to join in and receive some sort of profit for their efforts. In the case of Hashtoro, their self-stated differentiation begins with minimizing their costs, while making their solution as easy to use as possible.
On top of this, they claim to be the first mover in terms of cloud mining companies going green, which is substantiated by the knowledge that their mining facilities are in European countries that are green friendly, as well as the knowledge that Hashtoro uses their excess energy to help power local communities that they are in.
In terms of their actual service, fully examining Hashtoro’s claims on how it works versus the truth of how it works would call for another piece entirely. For now, we will stick to a short discussion of the costs for the end users, in order to attempt to illustrate how the cloud mining space usually makes its money.
Hashtoro says that to start mining with them, all that the average user needs to do is pay a minimum fee of 20 Euros and click through a few screens, which are logically, whatever agreements are required to run the service.
On the surface, this appears to be the lowest average cost in the history of Crypto mining, given that the average home miner could typically expect to be pay somewhere in the thousands, in US Dollars, per month.
What beginners to the idea of cloud mining usually do not quite comprehend at first is that this 20 Euro cost is akin to the idea of a “Freemium” model of an app. With Freemium apps, you get the basic features for free, but in general, anything that is actually interesting requires some sort of payment.
While we have not experienced Hashtoro firsthand, based on the history of cloud mining, it is reasonable to say that this space is no different. In cloud mining, firms try to draw you in with a low initial cost, then keep you there with small profits and keep you paying with the promises of being able to buy more hash power in their mining operation.
To clarify what this means, every Crypto miner who connects to any Crypto network ends up effectively running a percentage of that network’s hash power. In a general sense, hash power is nothing more than the power your computer has to effectively mine on a particular network.
In the same way that it is hard to prove the location of a cloud mining company, it is nearly impossible to prove how much hash power you are using. Logically, this can be said to be due to the fact that the only publicly available data on the subject will be related to the company’s overall hash power and not to that which is being purchased by its individual users. In response to this, it is possibly a good strategy to compare your stated hash power to that of other miners, in order to see if the cloud mining company is paying you fairly.
Furthermore, buying more hash power in a cloud mining operation can cost hefty amounts of money, due to the fact that since the industry is in its infancy, there is no real accepted standard for what these costs should be.
Therefore, with all of this knowledge in mind, choosing a cloud mining provider carefully, including examining all of its hidden costs before signing up, is worth the time and the effort.
By: BGN Editorial Staff