Hardware Mining Vs Cloud Mining: Which is Better for You?

First published
June 3, 2022
Last updated
June 3, 2022

During the mid-19th century, the United States of America witnessed one of the most significant moments in its economic history - the Gold Rush. A massive westward migration began when news broke of California being awash with this prized asset.  Men with little more than a pickaxe and determination mined alongside corporations with industrial machinery and dynamite, desperately seeking their fortunes.  

Mining the land was an arduous task. 

Yet, both parties' attempts were successful, leading to a prosperous future. Fast forward a couple of hundred years, and we are facing something of a mining craze. 

What Is Crypto Mining?

The creation of cryptocurrencies through mining is our modern-day Gold Rush.

Cryptocurrency mining is the process of solving complex mathematical equations to generate cryptocurrency. This is done by verifying and recording transactions into a blockchain public ledger. 

Mining can be achieved on a personal computer or specialized hardware. Thousands of crypto miners worldwide have seized the challenging opportunity to unearth crypto coins. And it's clear why they do it. Miners are reimbursed for their efforts with digital currency such as Bitcoin

Due to the considerable influence of cryptocurrencies and favorable earning potential, crypto mining has become as popular as it is essential to the DeFi space. Much like the pickaxe mentioned above and machinery, there are two primary means by which cryptocurrencies can be mined: hardware mining and cloud mining. 

The former is the 'original' way to coin crypto. Much reliance is placed upon the individual miner, who must invest in good quality equipment and be dedicated to the process to yield results. 

Cloud mining is quite the opposite. That is becoming increasingly prevalent with miners working remotely with a data center and a minimal set-up. Don't be fooled. Both methods of mining are challenging. Though like mining for gold, both means can be highly fruitful too. 

If you're planning on becoming a crypto miner, consider this post as a starting point, helping you understand both hardware and cloud mining a little better. It will analyze, compare, and present both mining types' unique benefits and drawbacks. 

A fuller understanding of these systems will allow you to move more effectively once your crypto mining journey begins. By the end, you'll have more clarity on the processes behind crypto mining. Furthermore, you'll be able to decide which mining method suits your needs best.

What is Hardware Mining?

Hardware mining of cryptocurrencies became prominent in 2017 when the prices of Bitcoin and other digital currencies began to soar.  

Hobbyists and small-scale miners found that they could make a good return on investment by mining crypto using their home computers or specialized hardware known as ASICs (Application-Specific Integrated Circuits), and  GPUs (Graphics Processing Units).  


As the traditional method of mining cryptocurrency, hardware mining requires serious preparation to execute correctly.

If you are considering hardware mining as your method, remember that you’re entirely responsible for every step of the process. From initial purchasing costs to setup and maintenance, you’re entirely in control of all aspects of your mining rig, and with great responsibility comes greater reward.

Finally, hardware mining is restricted to one location (often taking place in the home). When the computers are making a racket all day, turning your home into a sauna, and filling up your living space, please keep this in mind! The benefits of being in complete control of your mining experience are alluring. And to offset the expenses, hardware miners often join mining pools. For a small joining fee and a percentage on each new coin (usually between 1-3%), the miners utilize their resources as a single entity. This gives the miners a support network harnessed with higher processing power, producing a greater return from the mining, and ultimately permitting higher financial rewards once new coins are created. 

Hardware miners can limit high-start up costs and skyrocketing bills simply by being diligent. When purchasing their rig, miners should ensure the technology and equipment selected consume low energy levels. Also, choosing renewable energy sources can curb the over-usage of electricity. Yes, hardware mining does take a lot of preparation and patience and may even take time to notice any results. 

Approaching hardware mining with knowledge, insight, and respect for the systems can provide you with a new and potentially profitable income stream. 

Pros and Cons

  • Hardware mining gives users complete control of their mining.
  • Mining pools provide a more significant opportunity to obtain a high yield return.
  • Creates a passive income stream.
  • Exorbitant startup costs and demand for equipment is a constraint for many.
  • Deep knowledge of the system is required.
  • Mining this way is energy-sapping, meaning higher bills.

What is Cloud Mining?

Cloud mining is an alternative to traditional mining. It provides a way for people who don't have the resources or the time to invest in mining hardware and software to be still able to mine cryptocurrencies. Almost all activities related to cloud mining are done remotely. For instance, the mining rig is based at a data center and accessed via the cloud. Cloud mining is rapidly gaining traction as the most feasible way to mine cryptocurrencies by simplifying the entire process and utilizing cloud computing technologies. 


The accessibility and versatility cloud mining provides has seen its popularity soar amongst mining communities. By simply opening an account with a mining firm, users can remotely mine cryptocurrency with minimal startup costs or equipment. However, this ease of access came with a price. Apart from demanding a signing on fee and a cut of all coins, cloud mining is often more cuts labeled under vague terms such as 'expenses'. The amount of digital currency earned and what you receive may be different. Even converting crypto into fiat has a fee attached.

This has led cloud mining to be regarded as a low-earning mining platform. 

Due to the simplistic joining process, hackers and scammers have flooded the cloud mining space. 

With a distinct lack of regulation, crypto spaces are always susceptible to attacks, yet there is some irony that cloud mining's biggest strength is also a significant weakness. 

Finally, cloud mining has raised ethical questions too. Cryptocurrencies are decentralized financial systems designed to operate without a central body overlooking their transactions. Cloud mining implicitly favors centralization. 

Designating a small number of companies as gatekeepers over the distribution of hashing power undermines the ethological point of cryptocurrencies - to act as a decentralized financial system.  Despite the negatives, cloud mining is an accessible, affordable, and effective crypto mining platform. Providing a clear and concise route to crypto mining has instantly created ample financial opportunities for miners across the world. It cannot be stressed enough that placing the onus on remote operations, eliminating high set-up costs, the need for detailed mining knowledge, and creating a highly functional and flexible product, has been simply genius. 

You can mine crypto from anywhere in the world, knowing that your transactions and mining occur safely within the cloud. With hardware mining, you've tied to mining only Bitcoin. Cloud mining permits the user access to mine Bitcoin, Ethereum, Litecoin, and various cryptocurrencies. 

Since the responsibility of processing power for mining is now with data centers, that means cloud mining is more energy-efficient and will not thrust your electricity bills into orbit. Also, requiring minimal equipment to be mining, your home will not be filled with mining rigs and will be free from excess heat and noise! 

Pros and Cons

  • Cloud mining is an affordable and accessible method to bring crypto mining.
  • Mining rigs are self-regulatory and energy-efficient, taking maintenance liabilities away from users.
  • By pooling their resources, miners can expect a positive financial reward. 
  • Centralization undermines the decentralized nature of cryptocurrencies. 
  • Fraudulent activity is prevalent due to easy access to mining farms. 
  • Due to many fees levied on miners, the returns aren't as high as other forms of mining.

So, What Mining Method Suits You?

Now that you have sufficient information on both mining systems, you can make an efficient choice as to which mining setup best suits your needs. However, in case you're still needing a little prompt in the right direction, here is a suggestion on both to consider.  

Hardware mining is for you if you're looking for a higher reward and greater security and stability.  If jumping straight into the action with a flexible mining set-up with minimal upfront investment sounds more like you, cloud mining is the way forward. With the proper knowledge of what's available and an astute understanding of your own needs, you can easily decide which cryptocurrency mining method will lead you to success. 


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