Lately, mining cryptocurrency has emerged as a lucrative option for many tech enthusiasts to earn huge profits. Understanding the process of mining cryptocurrency can be confusing for newbies. So, it makes sense to keep refreshing your knowledge of this complex process. Mining is the process through which new crypto coins are produced and the Bitcoin network is secured. The mining enthusiasts use fast computers to solve complex mathematical equations. In exchange for verifying and securing the Bitcoin network, miners are rewarded with new Bitcoins. A new coin is generated each time miners solve a mathematical equation.
Now that you’ve refreshed what mining is, let’s move to methods of mining. In the early days, miners used setup home rig with CPUs to mine Bitcoin. But in the current market climate, it’s not possible to reap profit with a small mining rig set up in your house. Home-based mining setup is not only inefficient but it is also difficult to house all the bulky, noisy, power-hungry equipment. Mining hardware works best under specific temperature conditions. It’s impossible to get the electricity and cooling systems requirement of the latest ASIC hardware at home or in the garage or office. This is where miners started exploring other methods of mining. These days, more and more miners are either joining a mining pool or using colocation for crypto mining.
Cryptomining requires intelligence, powerful hardware, a cooling system, and a blisteringly fast internet connection to maximize mining rewards. These conditions are best fulfilled by data centers that offer mining colocation services. The colocation providers can help you reap higher profits and boost your resiliency. If you don’t know what colocation is, keep reading!
Colocation is a method of crypto mining where you can rent space in a data center for your servers and other computing hardware. Also known as “colo,” colocation means outsourcing the infrastructure and management for your mining equipment. Instead of housing the mining rig in your home or office, you can send it to a data center. The colocation service providers will install your hardware in their data center and provide power, bandwidth, IP address, and cooling systems that you need to deploy your server.
It is also possible to purchase the mining equipment from the colocation data center service and ask them to operate it for you. You will own the hardware and the data center will charge for kWh for their services. You will be paying for power rates and hosting facilitates and there may be an annual or biannual rental contract.
Given the increasing mining competition and high power costs, colocation mining has become a viable method of mining. The crypto mining colocation centers use some form of renewable energy. The state-of-art, large-scale data centers, and low power costs make mining more profitable. Moreover, whether you have an ASIC miner or GPU rigs, data centers can host your equipment in a secure facility under the supervision of IT professionals. These facilities have 24/7 security guards, video surveillance systems, redundant power and network feeds, as well as industrial-grade cooling equipment to maximize your mining profits.