Can I Use Cloud Hosting To Mine Cryptocurrency

Can i use cloud hosting to mine cryptocurrency

Disclaimer

  1. I'm not endorsing mining (or cloud-based mining for that matter).

    What credit card companies allow purchse of cryptocurrencies

    This is not an opinion piece about whether you should mine or not, or whether you should do mining with your own hardware or on the cloud.

  2. I'm also not endorsing any particular cloud service, nor am I being paid to do so.
  3. I'll attempt to be as transparent as possible with my methodology.

    Please let me know if you have any questions.

  4. Yes, 12 MH/s is very low.
  5. There is a terminology section at the bottom of this thing for anyone unfamiliar with the key terms in this write up.

TL;DR


HashMining offers a seemingly attractive offering for cloud-based cryptocurrency mining especially when compared to other cloud services.

Can You Mine Cryptocurrencies on AWS or DigitalOcean?

But because it only accepts payment in Bitcoin, you have to consider how much you are ACTUALLY paying in order to get a return on your investment.

Key Points:

  1. Performance-wise, Amazon AWS's cloud-based VMs are limited to around 12 Mh/s (using Claymore v9.5 as the miner).
  2. It costs $0.9 per hour on AWS for that 12 Mh/s.

    That's around $7,900 a year.

  3. HashMining allows you to scale to however many Mh/s you want, and tells you a "price" but be weary--you must pay in Bitcoin
  4. Bitcoin prices have jumped by more than 4x since last year
  5. On HashMining, getting around 12 MH/s (around the same as the performance of the AWS machines) purchased at $305.72 a year ago would mean you actually spent $1,236.47 While AWS is still much more expensive, you still wouldn't have made profit on HashMining versus if you just kept your bitcoin (you would've lost around $350).

What a Controversial Topic!


Especially with the supposed dawn of the age of Proof of Stake (Steem is Proof of Stake), why are we still mining??

Can i use cloud hosting to mine cryptocurrency

Well, I'm not an industry expert so I can't list all the reasons, but I think it's because right now the major currencies are still Proof of Work, and also there's a lot of hype around owning coins right now so people are trying to find ways to get their hands dirty with the pickaxes.

That being said, I'm not here to recommend you go start mining.

If you are actually considering it, I just want to throw some numbers on there through some quick first-hand research.

You still need to go out into the world, little minnow, and figure out for yourself if mining is the path you want to take.

This is a quick comparison of cloud-based ether mining comparing two cloud offerings:

  1. Amazon AWS (which is a more traditional cloud offering)
  2. HashMining (I saw this article and got curious about if it was actually good value)

Amazon AWS

First, I want to describe Amazon AWS.

Number of Sites Hosting Cryptocurrency Miners Surges 725% in 4 Months

It's the largest player in the traditional cloud space. They have a huge selection of different virtual machines that you can purchase for different use-cases.

For this experiment, I chose their p2 series which is categorized under Accelerated Compute Instances.

VPS Mining Guide - How To Mine Crypto Coins On Cloud Servers

This is also the only series of VMs that has GPUs in it (NVIDIA). I'm using Claymore's pool miner to run hashing algorithms to mine Ethereum.

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Definitely, you could use different things that can produce different hashrates so definitely this is a limited perspective on the performance potential of AWS in crypto-mining use cases. But overall, I think you'll still find it very expensive with negative ROI.

Can i use cloud hosting to mine cryptocurrency

Why? Because Amazon AWS's GPU VMs weren't built for you to exploit crypto-mining with!

  1. I provisioned a p2.xlarge (the smallest VM size) because they all use the same graphics card anyway, and I don't need excessive CPU/RAM.
  2. I provisioned with Ubuntu 14.04 OS.
  3. There is also a g2 series that has Graphics capability but it doesn't seem to be the latest version (p2 has more memory) and is only slightly cheaper.

    I don't think it's worth it to test as a comparison between AWS and HashMining because you'll find that HashMining is still way cheaper.

P2 Series:P2 instances are intended for general-purpose GPU compute applications.

LET’S EARN TOGETHER

High-performance NVIDIA K80 GPUs, each with 2,496 parallel processing cores and 12GiB of GPU memory.
At $0.9 per hour, that's around $7,900 per year

On HashMining, ~12 MH/s is only 274.34 Euro per Year (that's around $305 USD). Wow, wow, wow! What a deal?!!!


HashMining Seems like a clear winner, right?


Well, compared to AWS, yes...

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But you still lost money if you purchased a year ago.

What? I still LOST money?


Yea, you read that right. That's because HashMining takes payment in Bitcoin. That reminds me of the 10,000 BTC pizza story because you have to account for the potential growth in BTC.

12 MH/s purchased at $305.72 a year ago would mean you actually spent $1,236.47.


If you purchased that at HashMining a year ago, you would've lost $348

This is because the price of Bitcoin has grown 4.044x YTD.

Best Cryptocurrency to mine (2020) : Easy and Cheap using CPU and GPU.

Comparatively, though... Looking at HashMining's estimated charts, the potential money you could make over the course of the year is only 797.28 Euros, or about $888.

So some questions arise in your mind: Will Bitcoin rise in price again by 4x over the course of the next year?

Can i use cloud hosting to mine cryptocurrency

Will Ethereum prices (or other currencies that you are attempting to mine) drop over that year, too? Will it increase?

If you decide to play the cloud-mining game with HashMining, you need to consider not just how much you spend today, but what the spend could mean a year from now.

The estimated revenue is misleading because there's no guarantee that the prices of bitcoin and other cryptocurrencies will remain the same.

Best of luck on your wild-west Cryptocurrency Adventures!


TERMINOLOGY

I'll try to describe each thing in the most ELI5 way I know how.

MH/s: Megahashes per second.

Basically, how fast your computer is at mining cryptocurrency. The higher the number, the better.

VM: Virtual machine. Oh boy, this is tough...

Disclaimer

Just think of it as a computer but it's not sitting in front of you, it is somewhere else but you can still control it remotely. Well, it doesn't have to be somewhere else... But in this case, it is.

Cloud: I'm really starting to regret making this section.

Cloud is...

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Anything you access over the internet, basically. So you can remotely access your VM (remember, the computer that you can control but doesn't have to be right in front of you) through the internet to install a miner on it.

Cryptocurrency/Ethereum/Bitcoin: Seriously?? Omg I give up.