The basics of Bitcoin mining
Let us explain to you in simple words how a miner operates to bring you Bitcoins.
All cryptocurrencies operate on a blockchain, which is a register of transactions (like a digital book where all transactions are recorded). To be "noted" and to become secure these transactions on the blockchain must be encrypted.
The miner uses specific machines with high computing power, which secure transactions on the blockchain.
The computational powers are usually expressed in Hash per second (MH/S, GH/S, TH/S). The more powerful a machine is the more transactions it can make.
But in order to be able to offer a remuneration to these miners, each currency that can be mined gives a reward in this currency and this is how monetary creation is done on these currencies.
And so the more powerful our mining equipment is, the more Bitcoins we will receive as a reward. So we can represent this with a decentralized banknote sheet where everyone can participate.
To collect this miner currency, you just need to create or have a portfolio of crypto-currencies. And to inform the address of your miner. This way, your earnings will automatically be credited to your portfolio.
HARDWARE - Miner is a highly efficient piece of mining equipment specially designed for Bitcoin mining. Our datacenters house hundreds of miners.
ASIC miners are second (after Graphics card mining machines) generation machines created exclusively for mining. These are much better adapted to mining, are much more profitable and often have a lower electricity consumption. Today the dominance of ASICs is such that it seems rather illogical to turn to mining by graphic card. To give you an idea of these yields, you will find a ranking of the best miners by current profitability HERE and a selection of the best miners HERE.
POOLS - Miners are connected to pools. There are many pools so ECOS allows you to connect to the most trustable and reputable ones. This allows you to find the most profitable and secure combination.
PAYOUT - After being received from the pool the mined cryptocurrency is distributed among all ECOS customers depending on their hashrate amount in the system.
What is remote hosted mining?
Every country has its own currency. The Eurozone have the Euro, Russia has the Rouble and the USA has the US Dollars. We exchange money in banks or specialized foreign exchanges, transfer it worldwide and invest it. Today it is safe to say that the majority of money transfers are done through the Internet.
So it should not be a surprise that the digital currency such as Bitcoin was created. Interest in the currency has grown towards the end of 2013 due to significant spikes in the currency's value, but let's start from the beginning. In 2009, an unknown programmer named Satoshi Nakamoto put forward a whitepaper that proposed a creation of a new form of digital currency – cryptocurrency. Cryptocurrency functions as a means of exchange, unit of account and a store of value. Cryptocurrency, just like other resources, has some demand for it, and subsequently its market price. The significant difference is Bitcoin's intangibility – there is no bank-issued papers – meaning that rather being used in hand-to-hand transactions, Bitcoins are stored and exchanged only in the digital way within a decentralized, peer-to-peer network.
With fiat money, transferring funds from one person to another requires some intermediary authority. Even with hand-to-hand cash transactions, the issue, value and fiscal policy of money is controlled by a trusted centralized authority (such as a bank or government). Bitcoin operates differently as no middleman is required in transactions as the trust between actors is derived from technology, rather than trust in a central establishment. It also means that Bitcoin is transferred directly from the sender to the receiver, with absolutely no intermediaries.
A key point to note is that due to lack of central issuing body, Bitcoin is created and transferred with the help of a process called "mining". This process requires special powerful computers to crunch down the billions of calculations required to solve cryptological functions.
In reality, the mining process is extremely complex and technical. Despite its complexity, the process is transparent and open for review due to the open-source nature of Bitcoin.
The second, and more accessible model of remote mining is Cloud Mining, whereby a miner rents a part of the mining power of hardware hosted and owned by a Cloud Mining services provider. The service provider takes on configuring the hardware, maintaining uptime and selecting the most efficient and reliable pools.
This option provides a range of benefits: instant connection (meaning no hardware shipment wait times and delivery risks), fixed maintenance and electricity fees and no nuisances associated with mining at home such as noise, heat or space. Another key point is that this model of cloud mining requires no technical experience. Obviously, it's very important that miners understand the mining process, however this model doesn't require hardware expertise or significant configuration / implementation cost. Since customers can purchase any amount of mining power they wish, this means that the level of investment will depend only on the miners' ambition. This means that the cost of entry and subsequent risk is far lower than in comparison with the remotely hosted model.
ECOS is happy to be offering its new cloud mining services range. We guarantee a quick connection, 24/7 monitoring, an easy-to-use account dashboard, as well as daily payouts.
Cloud mining is greatly suited for miners who would like to try out mining and earning cryptocurrency without any hassle or risks associated with home-based mining.
The first form of remote mining is remote hosting. This model suits users with higher level of mining experience and know-how and who require a high degree of control over their mining hardware. Under this model, the mining hardware is hosted in a remote data center. Under this model, the miner pays monthly hosting fee to the hosting provider, who covers maintenance and electricity costs. This helps the miner handle the risks associated with maintenance as well as any risks with the shipment of the hardware.
It can therefore be summarised that the benefits of remote hosted mining are the control over the mining process, maintenance support and ultimate ownership of the hardware. However the entry cost is higher than with cloud mining, as the miner needs to purchase quite expensive hardware.