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What is Bitcoin Cloud Mining and is it a Good Investment?

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Bitcoin Cloud Mining

Bitcoin mining refers to the use of your computing power to process transactions on the bitcoin blockchain for which you get returns (in the form of new bitcoins). Bitcoin Cloud Mining refers to the process of ‘mining’ bitcoins with the use of a remote datacentre that has a processing power that is shared. With cloud mining, you don’t need to manage mining hardware. The miner might get lower returns as cloud mining is a service, hence there is a cost involved. Cloud mining enables to people earn bitcoins without the hassle of having to buy and maintain mining hardware.

Genesis Mining is currently the largest provider of bitcoin mining. It is the safest way to purchase hashpower as it doesn’t require any software and hardware set up.

Some of the advantages of bitcoin cloud mining are:

  • No excess heat to endure.
  • Zero costs of electricity.
  • No problems of ventilation when handling hot equipment.
  • There will be no cases of suppliers failing to deliver on time.

One of Genesis Mining’s most popular cloud mining contracts is the unlimited bitcoin mining contract, which will run indefinitely as long as the price of bitcoin does not drop to a level where the costs of mining exceed the revenues it generates. If that occurs, machines are shut down and the mining contract ends. Hence, cloud mining is only profitable as long as the price of bitcoin maintains an upwards (or at least sideways) trend.

WATCH OUT FOR SCAMS

Unfortunately, it is important to note that mining scams are on the rise like the possible $500,000 bitcoin cloud mining Ponzi scheme that was uncovered. Potential buyers of cloud mining services need to be extremely careful before purchasing any bitcoin mining contracts as companies posing as bitcoin cloud mining providers are one of the most common scams in the bitcoin economy. Hence, when choosing a bitcoin cloud mining operator, you need to be very careful and always consult community forums, such as bitcointalk.org, to receive information about the cloud mining company you plan to use.

One of my favourite bitcoin publications, BTCManager, has an excellent bitcoin cloud mining comparison site that can help choose a bitcoin cloud mining service, should you decide to purchase cloud mining contracts.

IS BITCOIN CLOUD MINING A GOOD INVESTMENT?

Well, the answer is yes and no. Since the mining difficulty of bitcoin has increased substantially in the last few years, mining at home using bitcoin mining hardware has become unprofitable for individuals as they can not compete with large international mining operations that own warehouses full of bitcoin mining machines.

In terms of bitcoin cloud mining, since the price of bitcoin has continuously increased in recent years, cloud mining contracts have been profitable investments and will stay profitable as long as bitcoin continues to gain in value. Having said that, historical data shows that investors who simply bought and held bitcoin made higher returns than those who invested in bitcoin cloud mining contracts.

Hence, it is up to you to decide whether you prefer to invest a larger amount once to then receive smaller daily or weekly bitcoin payouts “indefinitely” or do you prefer to buy and hold bitcoin and benefit purely from the capital gains of the digital currency?

There is an excellent article on how long it will take you to generate a return on investment using the most prominent cloud mining provider Genesis Mining by 99Bitcoin’s Ofir Beigel on Finance Magnates. If you are considering investing in a cloud mining contract, you should read this post first.

WHY I CLOUD MINE BITCOINS

Personally, I cloud mine bitcoin using Genesis Mining for idealistic reasons. I purchased their cheapest lifetime bitcoin mining contract (for $30) as I want to play my small part in ensuring that the bitcoin network continues to operate effectively. To get a return on investment it will take me well over a year, provided the price of bitcoin stays stable. Having said that, I am not too fussed about $30 should I not break even on this “investment” anytime soon. 

While you may like the idea of receiving regular passive income payments in bitcoin (I know I do!), you will most likely generate a much better return on investment by investing bitcoin peer-to-peer loans or simply buying and holding various promising cryptocurrencies (such as Dash, ether or everyone’s favorite bitcoin) as long-term investments.

 

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Paxful’s #BuiltwithBitcoin Initiative to Fund Rwanda Water Project and Afghan Scholarships

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Paxful Fund Rwanda Water Project

Peer-to-peer bitcoin exchange Paxful has announced a new development in its #BuiltWithBitcoin charitable initiative. The company is launching a Rwandan water tank project that will be spearheaded by AnthemGold, their new initiative member; additional classroom resources for the Rwandan nursery school that was built as the first #BuiltwithBitcoin project, and award more than $15,000 scholarships for female Afghan refugees to pursue their careers in the United States.

Paxful’s scholarship beneficiaries include Susan Naseri who is interested in non-profit work and law; Dunia Azizi, who will pursue a mathematics degree; and Farzana Nawabi, who is working towards a bachelor’s degree in nursing. The beneficiaries were chosen by Zam Zam – a non-profit organization partner for the program – based on the personal essays they wrote describing the hardships encountered while getting an education, migrating to the U.S. and blending into the American society while pursuing their careers and raising families.

Susan Naseri, one of the beneficiaries, said: “As a recipient of the Zam Zam Water scholarship, I’d like to express endless gratitude and appreciation to Paxful and everyone involved in the donation process. Receiving this scholarship is not only an immense honor and privilege; it also eases my financial stress significantly. I’m beyond humbled and thankful for this scholarship; thank you eternally for helping me expand my education and fulfill my dreams.”

Paxful Expansion and Partnership

Paxful Fund Rwanda Water ProjectFor the initial scholarship, winners were given $5,000 paid in two installments each of $2,500. Zam Zam Water will continue running the scholarship as an annual program. In addition, both Paxful and Zam Zam welcomed AnthemGold to the #BuiltwithBitcoin initiative after the virtual currency provider contributed enough bitcoin to construct a 35,000-liter water tank as well as fund the cultivation of more than 80 sustainable community gardens and 30 goats for two villages in Rwanda.

Speaking of the initiative, AnthemGold’s CEO, Anthem Hayek Blanchard said: “I am grateful to participate in a project that builds sustainable and essential projects for communities in need. We hope to use Zam Zam’s knowledge to provide people with the building blocks needed to foster and grow.”

Paxful’s announcement comes after its May announcement regarding its investment expansion in Africa by electing a new African Regional Director and building an incubation hub for blockchain technology in Lagos, Nigeria. The hub is expected to launch in the fourth quarter of 2018 and will be a co-working space that will provide services such as mentorship, advice on ICOs, and individual and corporate blockchain training. Paxful will also be sponsoring various crypto-focused events in Nigeria and plans to hold talks with similar events in Kenya, Ghana, and Cameroon.

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Crypto-Finance Platform Nebeus Enters the Africa Market

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Nebeus
Image by Nebeus

Cryptocurrency users in Kenya, Uganda, Tanzania, Rwanda, South Africa, Nigeria, and Ghana now have full access to the suite of Nebeus services. The “crypto bank” Nebeus enables users to buy and sell cryptocurrencies, enjoy remittance services, and access crypto-collateral loans, among many other services related to crypto-finance.

Opening access to Crypto-Finance services in Africa

Nebeus is a London-based fintech startup that runs a P2P exchange platform, offers crypto-collateral loans and incorporates a user-friendly bitcoin wallet. Nebeus was founded in 2014 with the aim of delivering a cheap, convenient and highly efficient service that catered to the demands and challenges of the evolving cryptocurrency landscape.

The crypto-finance platform will take advantage of local telcos and mobile money to penetrate these new markets, according to a company press release. Mobile banking has enabled African countries to leapfrog many developed nations by tapping into a previously unbanked segment of the population. The success of mobile money platforms, such as MPESA in Kenya, has attracted a number of fintech and blockchain companies to the African market.

The pay-in and pay-out corridors for the trading service include MPESA in Kenya, Airtel mobile money in Uganda, mobile money (Vodacom, Airtel, Tigo) for Tanzania, mobile money (MTN) Cameroon, Mobile Money (MTN) for Nigeria and MasterCard, Verve (Cards) and online banking for Nigeria. The established network of local payment partners will provide access to crypto-services for a population of over 400 million people.

Nebeus also aims to play a greater role in serving the African remittance market, which is estimated to receive billions of dollars annually. The company’s objective is to become the focal provider for this section of the African economy.

Alex Lempka, Nebeus’ Director of Communications, said: “Cryptocurrencies have a potential to make a significant impact on developing countries in many ways by providing a bridge into the global economy. Nebeus is looking forward to playing a major role in that by providing necessary infrastructure for all participants”.

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Golix Relaunches ICO and Expands Into Kenya, Uganda and South Africa

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Golix Launches ICO

Zimbabwe’s digital currency exchange, Golix is relaunching its token sale, which was planned for mid-May but abandoned after the Reserve Bank of Zimbabwe issued a cryptocurrency ban which was later overturned by the Harare High Court.

The exchange, which has been operational for three years, has also announced that it has launched its services in Kenya, South Africa, and Uganda as from Friday 1 June 2018.

“As part of our strategy starting from Friday 1 June, people in Kenya, South Africa, and Uganda will be able to start trading from Golix. This is one of our plans to be the leading exchange in Africa, which inspired by the vision to provide financial autonomy in the continent, ” said Golix’s Head of Growth, Panashe Tapera.

Out of 54 countries in Africa, only three have local cryptocurrency exchanges while the rest are still to realise the potential held by the blockchain technology.

Golix has set its target to avail its services across the entire African continent to address the cryptocurrency infrastructure shortage which has slowed down the adoption of digital currencies.

Golix Lead of Special Projects, William Chui, stated that the token sale was an initiative they set afoot to enable instant remittances and international payments through cryptocurrencies.

The Token Sale

“Since from onset our main agenda is to provide financial autonomy in Africa. The GLX token is going to be used to facilitate and realise this agenda. People from respective different countries will be able to buy the GLX token from the exchange using their fiat currencies. The GLX token will be used to buy other Altcoins in the exchange, all this will be done at zero transactions fee.

“The GLX token will also be used to facilitate remittances and international payments at lesser fees, compared to current banking methods. This cascade immensely towards contribution of GDP growth in African countries,” said Chui.

The GLX token, an Ethereum ERC20 token, will be available for purchase from Friday 1 June 2018 10 AM UTM/GMT on the Golix token sale website, tokensale.golix.com.

Potential buyers can use bitcoin (BTC) and ether (ETH) to buy the GLX token, which has been priced at $0.05612.

1,274,240, 097 tokens will be availed but only 637,120,049 are going to be sold during the token sale and the public will only be able to buy half of the tokens.

*Disclaimer: This post is informational only. Readers should do their own due diligence before taking any actions related to the mentioned company, product or service. BitcoinAfrica.io is not responsible, directly or indirectly, for any loss or damage caused by or in connection with the use of or reliance on any content, product or service mentioned in this article.*

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