Mining Contract

An agreement that allows individuals to sell their computing power for the purposes of verifying transactions on a blockchain.

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Could a mining contract be something for you? If you’re a small miner with limited hardware and limited budget for mining equipment and space, you can still reap the benefits of solving very complicated mining algorithms without investing in server hardware or other mining hardware.

Mining is a very energy intensive endeavor for cryptocurrencies these days. It usually requires you to be technical savvy to set up everything and keep it running too.

This is especially true if you plan to mine Bitcoin or Ethereum. Which both rely on the proof of work algorithm that, thankfully, most mining contracts are used for. 

The reason to use a mining contract is that as a network becomes more popular it becomes more profitable, this in turn brings more miners which increases the difficulty rating -- an automatic measure designed to prevent rewards being given out too fast.

So if you’ve found yourself and your hardware squeezed out of profitability due to increases in difficulty -- or if you simply lack the budget for all the hardware to turn a proper profit -- mining contracts may be the way to go. 

A mining contract is an agreement where you pay for the output of mining power from hardware placed in mining farms by people who then manage the hardware.

It's like investing in mining. You pay for a company to do the mining for you. They get capital to create mining farms and they take their cut to manage these mining farms. 

This means you don’t need to deal with excess heat or the loud whirring of fans or the updates to algorithms. That becomes someone else’s problem, like maintenance and updates. 

On the other hand, if you’re unable to verify these mining farms, then you could fall victim to a scam where it’s been difficult for customers like you to get their money back.

The other downside is that you won’t be making as much money because you’ll be giving up gains to the people who build and maintain and update everything. 

The other problem is volatility. If you sign up for a one year contract, the money you get may be less if the coin you sign on to run goes down in value. 

Yes, there are plenty of options to consider. Get started, dig deep, and you’ll find the best option for you, whether that’s mining coins yourself or mining in a pool or paying for a mining contract.