What is Cryptocurrency?
A cryptocurrency (or crypto currency) is a digital asset designed to work as a medium of exchange that uses cryptography to
secure its transactions, to control the creation of additional units, and to verify the transfer of assets. Cryptocurrencies
are classified as a subset of digital currencies and are also classified as a subset of alternative currencies and virtual
currencies. Cryptocurrencies use decentralized control as opposed to centralized electronic money and central banking
systems. The decentralized control of each cryptocurrency works through a blockchain, which is a public transaction database,
functioning as a distributed ledger.
What is Bitcoin Mining?
Bitcoin mining is the process by which transactions are verified and added to the public ledger, known as the block chain, and also the means through which new bitcoin are released. Anyone with access to the internet and suitable hardware can participate in mining. The mining process involves compiling recent transactions into blocks and trying to solve a computationally difficult puzzle. The participant who first solves the puzzle gets to place the next block on the block chain and claim the rewards. The rewards, which incentivize mining, are both the transaction fees associated with the transactions compiled in the block as well as newly released bitcoin.
What is Cloud Mining?
Cloud Mining is the process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of
cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware. The mining
rigs are housed and maintained in a facility owned by mining company and the customer simply needs to register and purchase
mining contracts or shares. Since Cloud Mining is provided as a service there is generally some cost and this can result in
lower returns for the miner.