Definition
Cloud mining is an arrangement in which a customer pays a provider for a share of remote mining capacity rather than buying and running their own hardware. The provider owns and operates the ASICs in its own facility; the customer holds a contract that entitles them to a portion of the output, usually for a fixed term. The appeal is access to mining without the noise, heat, electricity contracts, and maintenance of physical machines. This entry is educational and is not financial advice.
How contracts are structured
Cloud mining contracts vary widely. Some allocate a fixed amount of hashrate for a set period for an upfront fee, sometimes with ongoing maintenance or power deductions; others are profit-sharing or token-based schemes. Returns depend on the same variables that drive any mining operation, including bitcoin price, network difficulty, the block subsidy, and fees, but the customer typically has no visibility into or control over the underlying machines, firmware, or pool configuration.
Risks and due diligence
Because the customer never controls the hardware, cloud mining concentrates trust in the operator. The sector has a long history of opaque pricing, contracts that become unprofitable as difficulty rises, and outright fraud where no real mining takes place. Anyone evaluating a contract should scrutinize the provider's track record, verify that capacity is real, and read fee and termination terms carefully. Owning hardware, by contrast, keeps custody and operational control with the miner, which is the more sovereign path even though it carries its own logistical burden.
For the alternative of running your own single machine probabilistically, see solo lottery mining; the revenue metric that determines whether any mining is profitable is covered under hashprice.
Model real ownership instead in the ROI & payback calculator.
In Simple Terms
Cloud mining is an arrangement in which a customer pays a provider for a share of remote mining capacity rather than buying and running their…