All you need to know…
Many people are confused by the phrase “bitcoin mining”, they can’t fully understand what it is, how it works and why they call it mining. In this article, we explain all you need to know about bitcoin mining and bitcoin mining contracts. Also, we will discuss some key aspects of the Bitcoin mining industry and answer how GX Blocks offers innovative and practical solutions.
What is Bitcoin Mining?
Bitcoin mining defines the process of acquiring bitcoins in exchange for performing the verification process for the validation of Bitcoin transactions to the distributed ledger known as the “blockchain”.
In other words, this process involves validating data blocks and adding transaction records to a public record known as a blockchain. These transactions provide security for the Bitcoin network, which in turn compensates miners by giving them bitcoins. Mining is also how new coins come into existence as a reward for being the first miner to add the next block of transactions to the blockchain.
Bitcoin mining is done by high-powered computers that solve computational puzzles (complex mathematical problems).
Miners have become very sophisticated over the past several years using complex machinery to speed up mining operations.
Who called Miners?
The people who voluntarily offer the computational power to perform these tasks are called miners. Bitcoin miners receive Bitcoin as a reward for offering computing power in order to complete ‘blocks’ of verified transactions that are added to the blockchain. This reward in bitcoin is what motivates people to get involved in bitcoin mining: to become bitcoin miners.
What are Cloud Mining Contracts — Bitcoin Mining Contracts?
Cloud Mining is a mechanism to mine cryptocurrencies, such as Bitcoin. This mechanism uses rented cloud computing power and this can be achieved without having to install and run the hardware and software directly. The companies that offer cloud mining contracts enable people to participate remotely in the cryptocurrency mining process.
With cloud mining contracts, it is possible to have more participants in this process. The term cloud indicates that this process can be done remotely, as mentioned above, and those involved in cloud mining don’t concern about the issues of equipment maintenance, energy costs, noise caused by miners, etc.
How exactly is this achieved? Cloud miners are part of a mining team, in this group users rent a certain amount of “hash power” for a certain period of time (each company has its own offers). The participant, depending on the “hash power” that he has rented, receives for a certain period of time that each company has set the allotted share of profits.
As we already mentioned above, Bitcoin miners compete to solve the mathematical equation known as Secure Hashing Algorithm-256 (SHA-256). Cloud mining allows users, instead of using their own machines, to extract hash power from hardware located in remote data centers.
All bitcoin mining is done in the cloud.
Cloud Mining is a process in which cryptocurrencies are mined with the help of one or more data centers, which have a common processing power for solving algorithms related to transactions. This extraction process allows its users to purchase hashing power, which is located in remote data centers, online, avoiding any installation or maintenance problems on a personal level. Cloud Mining allows its users to mine cryptocurrencies without having to manage and be responsible for the material themselves.
An organization — company creates mining facilities in order to be able to perform the process. The interested miner in order to be able to participate in this process will have to register and buy the mining contracts that the company has, paying the corresponding amount.
The user who buys a part of the computer capacity registers essentially chooses to buy the mining contracts and rent the servers that perform this process with a fixed charge, which is included in the contract.
The user then receives the hashrate directly and the corresponding payments for their contribution to the cryptocurrency mining process. Each company has its own policy regarding the deduction of some fees from the reward that will be transferred to your account.
GX Blocks provides Bitcoin mining contracts powered by Renewable Energy Sources and Smart Contracts. The GX Contracts include all the operating and power costs. We do not charge any power or transaction fees in contrast with the existing providers.
Mining contracts have certain terms, which are pre-determined by the company itself, and based on these the miner or the buyer may pay an additional amount for electricity/maintenance, which is either deducted from your extractable material or prepaid upon purchase of your contract.
GX Blocks has no Hidden Fees. There is no Maintenance Fee involved in the GX Mining Contracts. There are no other fees to consider when calculating the performance of this mining leasing contract, so you will receive the full mining output for the entire run time. Your only cost is what you pay for the computing power (the initial price at purchase).
What is On-Premises Mining?
When a person chooses to mine on his own, he chooses to buy his personal mining equipment, which means that he undertakes the full personal supervision of this process and the operating costs, installation fees and obligations that entail.
The process of extracting material consumes a large amount of energy and is noisy, depending on the type of machine used. Mining is difficult and a large amount of money needs to be paid for the purchase of equipment, which can take a long time to be delivered, but also for its installation and maintenance. It is important to note that the creation and maintenance of mining facilities require technically skilled people to deal with it.
There are some key differences between these two mining methods that need to be considered
Advantages of Cloud Mining
Cloud mining doesn’t need large initial investments.
Low entry costs and minimal risks.
Cloud mining contracts allow you to start mining once your purchase is completed.
It has a constant fragmentation rate, it does not decrease in the long run depending on the reduced efficiency of the material or the environmental conditions.
It is 100% effective in terms of space because it does not affect the miner on a personal level (noise, maintenance, installation, facilities).
No equipment is needed.
Mining activities are provided — cooling, dust cleaning, performance monitoring, maintenance.
Efficient and automatic management of mining pools is provided.
The equipment and machinery are guaranteed and any damage is required to be resolved by the company at no charge.
Mining different types of cryptocurrencies and providing a smart wallet.
Daily or Monthly payments.
Features of On-Premises Mining
High start-up costs and many risks, supply, maintenance & configuration of specialized material.
In order to start mining, the appropriate equipment must firstly be purchased. This will require a waiting time for the shipment and time for its installation.
Large load on the home grid — high cost of electricity.
There is no constant rate of fragmentation (especially if you do not belong to a group), it can be reduced in the long run depending on reduced efficiency, any equipment malfunction or environmental conditions.
It needs a specific installation space, it is noisy, it needs maintenance and technical knowledge.
Expensive resources in terms of equipment and maintenance.
Additional and necessary mining activities need to be carried out — refrigeration machines, dust cleaning, performance monitoring.
There is no automatic and efficient management of mining pools, it needs to be done by the miner.
Equipment and machinery are the responsibility of the miner, any malfunction or damage is an additional financial burden and interrupts or slows down the mining process.
The machines cause high heat, which means that an additional mechanism (cooling) is needed, both for the good operation of the machines and more broadly for the space in which they are located and the prevailing conditions.
For someone who is interested in dealing with the mining process, it is better for what was mentioned in detail above to start buying Cloud Mining Contracts. This will give him faster results, avoiding spending a huge amount of money and diligence — necessary technical knowledge of the equipment, as well as safety.
GX Blocks is an innovative company specializing in the development of blockchain services and decentralized energy networks, with the aim of creating hybrid services and new innovative products in the blockchain ecosystem.
It’s an easy way to contribute to the mining process through Cloud Mining. The only thing you need to do is register, connect to its network and select the type of Cloud Mining Contract that interests you.
GX Blocks provides:
Competitive Prices with no Hidden Fees.
Using Smart Contracts.