Logistics And Supply Chain Management

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Logistics and Supply Chain Management

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2192 Words

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Cloud Mining

Introduction

Over the past few years, crypto-currency has become a popular talk among many people

including the economic experts, the media, online forums and other investment conversations.

The rise of digital currencies such as Bitcoin and other forms of cryptocurrencies has

revolutionized the online transaction approach across the world by many stakeholders. Many

economic experts maintain that the cryptocurrency market is likely to continue growing in the

coming years and that many people are expected to benefit from the growth

. Despite the original

perceptions about cryptocurrency that they are used by criminals and money launderers, this type

of currency is currently getting embraced by many investors across the world. Bitcoin, for

example, has been growing every passing day with its value now approaching fifteen thousand

dollars

. The latter shows the importance of investing in cryptocurrency as it has a potential of

bringing favorable returns. However, for one to mine the cryptocurrencies there is need to

understand the technology involved in the process. Cloud mining is the process of mining the

cryptocurrencies using a remote data center that has the capability of mining the currencies

Cloud mining can also be defined as the process that allows the users to complete the

transactions involving the use of cryptocurrencies.

What is Cloud Mining?

Bhaskar, N. Devi, and L. David Kuo Chuen. "Bitcoin mining technology." Handbook of Digital Currency: Bitcoin,

Innovation, Financial Instruments, and Big Data (2015): 45.

D. Williams, Cryptocurrency Compendium: A Reference for Digital Currencies: A Reference for Digital Currencies.

Lulu. com, 2017.

Solanas, Marc, Julio Hernandez-Castro, and Debojyoti Dutta. "Detecting fraudulent activity in a cloud using

privacy-friendly data aggregates." arXiv preprint arXiv:1411.6721 (2014).

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Most people involved in cryptocurrency transactions cannot secure and operate the

infrastructure required to mine the currencies

. The term “mining” in this case refers to the

process of validating all the transactions taking place on each cryptocurrency. For one to transact

using any form of cryptocurrency such as Bitcoin, the transactions need to be broadcasted and

verified to confirm that the transaction is valid

. Clouding mining, therefore, refers to the process

of relying on cloud-based machines to validate the cryptocurrency transactions.

During cloud mining, the transactions are broadcasted to a network, and once the

broadcasting is complete, the transaction is verified to confirm the validity of the transaction

After verifying the transaction, it is then recorded in a public database called the Bitcoin

blockchain in case one is transacting using Bitcoin. The people involved in the processing and

verifications of the transactions before they are recorded on the blockchains are called miners.

The miners earn by receiving transaction fees in form of the newly created cryptocurrencies.

What does Cloud Mining Entail?

Cloud mining involves the use of a computer hardware to validate the cryptocurrency

transactions through a centralized data center. In cloud mining, one only needs a computer with a

high processing power that can complete the transaction and aid in communication. Bitcoin and

other digital currency mining are difficult and require sophisticated hardware to achieve the

transactions. However, in cloud mining, the users do not have to own the physical hardware but

uses a cloud service provider to complete the transactions and earn his or her coins as a miner

Cloud mining involves using shared processing power to operate from remote data centers. One

only needs a home computer and an optional wallet among other simple infrastructures to start

D. Williams, p. 16

M. Pilkington, "Blockchain technology: principles and applications." Browser Download This Paper (2015).

M. Pilkington, p.76

Bhaskar, Devi N., and L. David Kuo Chuen, p.45

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cloud mining. The rate of mining depends on the speed and the processing power of the

computers used during the process

Cloud mining as a method allows people with less technical knowledge on how to run

their software and hardware but is interested in cryptocurrency mining. It reduces the cost of

capital required to set up own mining software and hardware by reducing the cost of electricity

and another cost of running the required infrastructure

The hash rate is used to measure the miner’s machine power. The hash rate measures the

number of times that a machine can compute a hash function per second. The hashrate is what

determines the profits acquired by the miners

. A hash function uses a specific input of a given

length and produces an output of a specific length. The hash function is specific to every

cryptocurrency. For example, for the hash rate used for Bitcoin is SHA256

. The hash functions

are considered as deterministic since the same input produces an output of the same measure.

However, the hash functions are designed to be unpredictable such that if one wants to find an

input that produces a specific input, then the only way to do that is through trial and error by

trying as many hash functions as possible

. The inputs include a list of all the recent transactions

that needs verification and validation and whose hash values are smaller than the specified

values.

The miner then needs to broadcast the verified list that then becomes the next block in the

Blockchain. The miner then earns some coins for his or her contribution in operating the Bitcoin

protocol. Therefore, for anyone willing to start cloud mining, he or she should consider the hash

Bhaskar, Devi N., and L. David Kuo Chuen, p.45

O'Dwyer, J. Karl, and D. Malone. "Bitcoin mining and its energy footprint." (2014): 280-285

Rosenfeld, Meni. "Analysis of hashrate-based double spending." arXiv preprint arXiv:1402.2009 (2014).

Rosenfeld, Meni.

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rate of the cloud host to be sure that its speeds are faster enough to process the hash functions

quickly

. The faster the remote host, the higher the earnings a miner is likely to get.

Why Invest in Cloud Mining?

Investing in cloud mining through buying hash rates is a good investment move. First,

cloud mining offers the potential miners a mining system that requires a low cost of entry,

minimum expenses, and minimal risks. Cloud mining is opposed to the traditional mining

methods that require the procurement and maintenance of highly sophisticated hardware. Cloud

mining offers miners a cheaper means of earning coins by using a remote data center that is

mainly managed by a third-party company

. For example, while using a service provider such as

HashFlare, one only needs to sign up and buy the hashrates according to the number of

investments he or she intends to commit then start the mining process. Using cloud mining is

easier and profitable since mining starts immediately after confirmation of the payments with the

first payments expected within 24 hours after confirmation of payment in most of the companies

Despite the controversies surrounding the use of cryptocurrencies, the business has grown

over the years, and it is now a multimillion-dollar industry. The high rate at which the digital

currencies are growing makes it a worthy business for one to invest. Investing in cryptocurrency

mining is an ideal investment idea that people should consider. Unlike the traditional methods of

mining where one is required to procure, operate and maintain sophisticated hardware and

Tosh, K. Deepak, et al. "Security implications of blockchain cloud with analysis of block withholding

attack." Proceedings of the 17th IEEE/ACM International Symposium on Cluster, Cloud and Grid Computing. IEEE

Press, 2017.

Miller, Andrew, et al. "Nonoutsourceable scratch-off puzzles to discourage bitcoin mining

coalitions." Proceedings of the 22nd ACM SIGSAC Conference on Computer and Communications Security. ACM,

2015.

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software, cloud mining offers a cheaper and better way of mining. Cloud mining uses a remote

data center that makes it easy to mine the digital coins. Investing in cloud mining is profitable

and can help individuals earn from their investments.

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References

Bhaskar, Devi N., and David L., Kuo Chuen. "Bitcoin mining technology." Handbook of Digital

Currency: Bitcoin, Innovation, Financial Instruments, and Big Data (2015): 45.\D.

Williams, Cryptocurrency Compendium: A Reference for Digital Currencies: A

Reference for Digital Currencies. Lulu. com, 2017.

Miller, Andrew, et al. "Nonoutsourceable scratch-off puzzles to discourage bitcoin mining

coalitions." Proceedings of the 22nd ACM SIGSAC Conference on Computer and

Communications Security. ACM, 2015.

O'Dwyer, Karl J., and Malone D. "Bitcoin mining and its energy footprint." (2014): 280-285

Pilkington M., "Blockchain technology: principles and applications." Browser Download This

Paper (2015).

Rosenfeld, Meni. "Analysis of hashrate-based double spending." arXiv preprint

arXiv:1402.2009 (2014).

Solanas, Marc, Julio Hernandez-Castro, and Debojyoti Dutta. "Detecting fraudulent activity in a

cloud using privacy-friendly data aggregates." arXiv preprint arXiv:1411.6721 (2014).

Tosh, Deepak K., et al. "Security implications of blockchain cloud with analysis of block

withholding attack." Proceedings of the 17th IEEE/ACM International Symposium on

Cluster, Cloud and Grid Computing. IEEE Press, 2017.

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