Bitcoin Cloud Mining: Investment opportunity or masked scam? | Cryptocurrency

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The ecosystem of digital currencies increasingly has a greater number of followers, since there are many people who want to enjoy the benefits associated with their use and trade. Next, we present the first part of a brief analysis related to one of the best-known alternatives for obtaining balances in the cryptocurrency, explaining a little in what it consists and what are its considerations.

It is no secret to anyone the increasing demand that cryptocurrencies are currently experiencing, especially in countries whose economic problems have forced their citizens to devise methods to protect their savings or to make investments that must be financed in foreign currencies. The crisis has motivated people to take greater pains in the search for strategies to generate digital currency and thus solve their own needs.

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Bitcoin is currently the digital currency with the best reputation among the existing ones, since it is the one with the longest trajectory and to date it has been able to maintain before the public its benefits over the disadvantageous aspects associated with its use. Currently, each BTC  is valued above 680 dollars (at the time of writing), and this current price has almost quadrupled the profits of those who took advantage of the drop in the value of the cryptocurrency after the events associated with the closing of Mt. Gox, when the digital currency reached a minimum cost close to 177 dollars (for the month of January 2015).

The proliferation of companies that now accept payments in the digital currency, as well as the creation of new companies that offer services based on their underlying technology, have further boosted Bitcoin’s good reputation  based on its most beneficial characteristics, such as the fact that the transactions are direct between the people involved without needing a third party, the assets are transmitted almost immediately even at cross-border level through the Blockchain without the payment of exorbitant commissions and the identity of the users is protected since it works at through electronic addresses not linked to personal data.

It is not surprising that more and more people are interested in owning assets in the cryptocurrency to enter this fascinating world. However, the alternatives for obtaining BTC balances in general are not as varied as one might imagine, although the possibilities of acquiring bitcoins are growing every time.  We outline three methods to obtain digital assets:

  • Buy them from a person, in a specialized exchange service or through outlets and ATMs specially designed for this purpose.
  • Receive payments for services rendered.
  • Minar Bitcoin balances.

The latter, mining, over the years has become a popular activity around the world, especially in regions in which Bitcoin represents a fairly profitable alternative to deal with unfavourable economic scenarios as is the case of Latin America, a territory that many labels as enormously promising for the ecosystem of digital currencies.

What is Bitcoin mining?

Given the decentralized nature of the digital currency and its general ledger, transactions carried out around the world require a mechanism that facilitates the process for data to be loaded in Blockchain. In general, the network requires the support of external people who have specialized devices, whose main function is to take a series of transactions and group them in a block of information that will be loaded into it.

Thanks to the miners, the information associated with the block is transformed into smaller pieces of information called HASH through the application of mathematical algorithms, resulting in a kind of unique electronic signature that is attached to the data block with which guarantees the integrity of the information deposited there. This process guarantees the security and inviolability of the blocks, since if any data is altered, the HASH would change and the information would not be valid to be loaded in the Blockchain

To carry out this process, people who wish to carry out mining operations must have computers or hardware specially designed for this purpose. With this equipment, the information of the different transactions can be captured and grouped into blocks that will later be sent to the network, allowing the owner to appropriate the respective commissions.

For the Bitcoin network to work, a great processing potential is necessary. The network itself has a good part but requires the support of people who buy certain types of specialized hardware for this function as is the case of cpu or equipment with mining chips. Originally a person could mine from his desktop computer but the process would be very cumbersome and would require a very large investment of electricity and operating memory, which does not correspond to the profits that could result from mining BTC in this way. That is why several companies such as BitFury and 21Inc they have been especially dedicated to the development of equipment that incorporates chips to increase the processing potential while reducing the amount of electricity consumption.

 

bitfury-vs-bflHaving the right hardware, it connects to the P2P network of Bitcoin, allowing the user who makes available his resources receive a remuneration in balances of the digital currency in exchange for the processing potential of the transactions that he makes available with your CPU. It is also possible to earn additional balances by capturing the commission rate that is set when making transactions as they are arranged to streamline the process and allow BTC assets to be available for use as soon as possible once they are transferred.

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