What is the difference between cloud mining and mining hosting? What exactly does mining difficulty mean?

Hosting and cloud mining

Cloud mining (Cloud miner), also known as cloud mining, is a m31s whatsminerremote mining method that has emerged in recent years.

Purchasing your own miner, establishing your plant, and paying massive electricity bills is not only a large capital investment, but it also carries a high level of risk. There are companies that provide cloud mining services because there is a demand for it.

Cloud mining is related to local mining in the same way that cloud storage is related to local storage. Simply put, it is the online transfer of local to remote resources that can be considered a sharing economy model. Cloud mining service providers provide mining machines, network, operation, and maintenance services, whereas users only need to pay a small fee for renting and hosting services, choose which digital currency to mine, and then wait for payment. You won't have to worry about the time-consuming process of purchasing machines and maintaining them, and the investment will be minimal.

Mining machine hosting services are similar to cloud mining inmining app that miners spend their own money to buy mining machines, but the installation, commissioning, mining, and maintenance of mining machines are all handled by the service provider for a fee. The main distinction between it and the previously discussed cloud mining is whether the mining machine belongs to the miner or to the service provider.

Difficulty in mining

Previously, we explained Bitcoin mining scientifically. Simply put, mining is the process of many people competing for the right to record the next block and receive a reward by solving the result of a mathematical problem. The greater the mining machine's (computer's) arithmetic power (performance), the greater the chances of obtaining the first result and receiving the reward. However, the arithmetic power of mining machines (computers) has increased many thousands of times since the birth of Bitcoin, but the number of coins mined has not increased, excluding the rule of halving the reward every 4 years (or other length of time) of the cryptocurrency, another factor is the role of mining difficulty.

The degree of difficulty in solving the mathematical resultminer gate each time is referred to as mining difficulty. As the number of miners increases, the difficulty of solving the math must be adjusted to keep competition reasonable. The difficulty increases dynamically based on certain rules as the number of miners increases. However, if all miners swarm to mine a specific digital currency, the solution difficulty will be extremely high. And the size of the miners' arithmetic power is fixed, so that to get the same amount of rewards, it will be more difficult to mine than usual, which is known as mining becoming more difficult.

In general, miners will pay close attention to the mining difficulty of cryptocurrencies in order to ensure mining revenue. If a particular coin becomes increasingly difficult to mine, they will switch to a cryptocurrency that is relatively easier to mine. As a result, mining difficulty is a critical parameter for miners.