Overall interest in mining Bitcoin and similar cryptocurrencies has taken a bit of a hit as of late, due to miner profitability falling through the floor along with the Bitcoin price. One area that seems to be most affected is cloud mining; profit margins here are lower by default (due to third party fees involved) and people simply don’t rent hashing power as they did before.
However, the interest is still there, otherwise you wouldn’t be reading this article which compares probably two of the market’s most popular cloud mining services, NiceHash and MinerGate.
NiceHash is a Slovenian cryptocurrency cloud mining marketplace which connects sellers of hashing power (miners) with buyers of hashing power in a peer-to-peer manner. The company was founded by Marko Kobal and Matjaž Škorjanc in 2014. They don’t exactly have a squeaky clean record as NiceHash suffered a hack back in 2017, during which $64 million worth of cryptocurrency ended up being stolen. To their credit, 71% of stolen cryptocurrency was reimbursed to the victims.
MinerGate was founded on 24th of March, 20114. It was the first mining pool for CryptoNote based currencies, first of which was Bytecoin. There’s a lot to say about MinerGate’s connection to Bytecoin and other projects like CoinTelegraph, Freewallet, Changelly, ChainRadar, HitBTC and Fairproof. What’s concerning is that Bytecoin is generally seen as a scam in the crypto community and many people who worked on it moved onto the projects listed above, including MinerGate. Additionally, some users report that MinerGate tends to systematically underperform and steal hash power from those who buy it from them, which is another cause for concern.
None of this has apparently stopped the service from amassing more than 3 million users on their books. There are some positive reviews of the service but most of them contain referral links to the website; while this isn’t necessarily bad it does somewhat undermine the validity of said testimonies.
Well we started off quite negatively, haven’t we? That’s because cloud mining in general has a bad reputation in the crypto community (especially among “regular” miners).
You’re essentially paying a very loosely controlled third-party intermediary to provide you with hashing power to mine cryptocurrencies with variable mining difficulties; in such an environment, there’s plenty of space for underhanded behavior and scamming. But let’s assume that you don’t care about any of that and would still like to try your luck out with cloud mining. If that’s the case, let’s take a closer look at what both services have to offer.
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Security is very important for a cloud mining service. NiceHash did suffer the 2017 hack which saw a hacker transfer 4,736 Bitcoin onto his own wallet. In order to prevent similar issues in the future, NiceHash redesigned their payment system to include a dual channel approach which requires manual confirmation for every transaction that leaves their system. To further help restore the trust that was lost, the company has reimbursed ¾ of what was lost in the hack and are continuing to do so. They also recommend that you use a non-hacked e-mail when signing on for the service, a strong password that only you know, and offer 2FA features for additional security.
MinerGate hasn’t suffered any hacks in the past but have shown some negative behavior patterns which we covered above. However, even though some users report that the service keeps “skimming off the top” of their hash rate, others swear that they’ve had no problems with it. One potential issue we experienced was Chrome/Windows reporting that the website minergate.com contains a Trojan virus; this is apparently a false flag as crypto mining sites seem to be considered malicious by default. Additionally MinerGate software is closed source, which means that the community cannot review the code and determine if there is anything malicious in there. When running MinerGate, you have no idea what (and if any) additional processes are running on your computer; some reports found additional data being added with MinerGate blocks which can be worrying. Some additional security features include SSL certification and 2FA.
Also important thing to consider, as more uptime means more hash contributed, which means more coins mined out and more profit. NiceHash doesn’t offer any official uptime numbers; meanwhile MinerGate reports 99.97% uptime numbers, which is quite impressive.
NiceHash has an impressive number of cryptocurrency and corresponding algorithms available for mining:
- Litecoin, DogeCoin, DGB-Scrypt, FedoraCoin (Scrypt)
- Bitcoin, Bitshares, EmerCoin, DigiByte (SHA256)
- LeoCoin (ScryptNf)
- Dash, FuelCoin, StartCoin, VCash (X11)
- HellenicCoin, AmberCoin (X13)
- Maxcoin (Keccak)
- HTMLcoin, MaryJane (X15)
- TalkCoin (Nist5)
- Feathercoin, Orbitcoin, Phoenixcoin (NeoScrypt)
- Vertcoin, Crypto, Hanacoin, MonaCoin (Lyra2RE)
- Vanillacoin (WhirlpoolX)
- DGB-Qubit (Qubit)
- Quark, Monetary Unit, AmsterdamCoin (Quark)
- Axiom (Axiom)
- Monacoin, Hanacoin (Lyra2REv2)
- LeoCoin (ScryptJaneNf16)
- BlakeCoin, Decred, Dirac (Blake256r8)
- Decred (Blake256r14)
- Vanillacoin (Blake256r8vnl)
- Hodlcoin (Hodl)
- Ethereum, Ethereum Classic (DaggerHashimoto)
- Decred (Decred)
- Karbo, Bytecoin, DigitalNote (CryptoNight)
- Lbry (Lbry)
- Zencash, BitcoinGold, Zcash, Hush, Zclassic, Komodo (Equihash)
- PascalLite (Pascal)
- SIBCoin (X11Gost)
- Siacoin (Sia)
- NevaCoin, Tajcoin, Verge (Blake2s)
- HDAC (Skunk)
- Quantum Resistant Ledger, Electroneum (CryptoNightV7)
- Sumokoin, Loki, RyoCurrency (CryptoNightHeavy)
- GINcoin, Alpenschilling (Lyra2Z)
- Ravencoin, Motion (X16R)
- Graft (CryptoNightV8)
- Bitcoin (SHA256AsicBoost)
- Bitcoin Gold, BitcoinZ, ANON (Zhash)
- BEAM (Beam)
- Grin (GrinCuckaroo29)
- Grin (GrinCuckatoo31)
- Vertcoin (Lyra2REv3)
- Zcoin (MTP)
- Monero (CryptoNightR)
The following cryptocurrency can be mined via the Minergate cloud mining service:
- Ethereum (DaggerHashimoto)
- Zcash (Equihash)
- Monero (CryptoNightR)
- Bitcoin (SHA256AsicBoost)
- Litecoin (Scrypt)
- Bitcoin Gold (Equihash BTG)
- Ethereum Classic (DaggerHashimoto)
- Bytecoin (CryptoNote)
- Dashcoin (CryptoNight)
- DigitalNote (CryptoNight7)
- QuazarCoin (CryptoNote)
- MonetaVerde (CryptoNight)
- FantomCoin (CryptoNight)
- Aeon coin (CryptoNightLiteV1)
- Infinium-8 (CryptoNight)
Fee Structure and Payment Methods
NiceHash fee structure is somewhat complicated, as there are fees for buying/selling hash power and also withdrawal/deposit fees for NiceHash wallet. You can check out the complete structure here. Payouts are done in Bitcoin; this can be limiting to people who want to hold the coin they mine.
As for MinerGate, the pool fee structure is as follows:
|Bitcoin Gold||–||1 %|
|Ethereum Classic||–||1 %|
|Litecoin||0 %||0 %|
|Bytecoin||1.5 %||1 %|
|Monero||1.5 %||1 %|
|Monero-Classic||1.5 %||1 %|
|Aeon coin||–||1 %|
|GRIN||0 %||0 %|
The first row refers to a Pay Per Share payment method, a more direct method which lets you get a standard payout rate for each share completed. This method is considered as one that delivers constant payments that don’t fluctuate. Second row contains fees for the Pay Per Last N Shares payment method, one that apparently includes a luck factor which has more variation in what you earn and can potentially earn you more (or less) than what’s considered standard. MinerGate describes these methods themselves:
“PPLNS – If you are looking to make money off of the cryptocoin network, you want to use PPLNS due to its higher payout.PPLNS will give you wide fluctuations in your 24 hour payout, but for hardcore miners,the law of large numbers states you will earn more this way. This is for people trying to mine as fast as possible. PPS – PPS is for people who want to have statistics to base calculations off of for upsizing their mining power.PPS is not recommended for a simple mining because the payout is less in the long run.”
Payouts are made in the coin you mined.
NiceHash has a couple of additional features that will interest the community:
- Profitability calculator – lets you calculate how much hash rate/profit you can achieve with your current hardware and electricity costs.
- CPU/GPU mining – lets you mine with PC hardware with the NiceHash Miner Legacy.
- NiceHash wallet – internal wallet that can be used for your operations on the platform (alternatively you can connect an external one).
- Simple Multi-Algorithm Mining
MinerGate has evolved as a service over time, developing a whole host of products that are available to its community. The products include:
- Smart Mining – MinerGate allows you to use the Smart Mining service to improve your overall profitability. Built-in algorithms automatically switch your hash rate to mine the most profitable altcoin. This feature might be desirable for absolute beginners.
- Multi-pool – offers 9 possible pools to which the community can connect and mine.
- Pool stats tracker – lets you track stats for different mining pools.
- Service monitor – tracks whether or not certain currency mining is online or offline, as well as the status of balance confirmation, transfers, withdrawals and PPLNS rewards.
- Benchmarking tab – helps you perform a benchmark of your mining hardware to determine how efficient and it is at mining.
- Calculator – helps you determine potential profit of a certain mining contract.
- CPU/GPU mining – Alongside ASIC’s, lets you mine with your PC hardware and even lets you determine the number of cores on said hardware that you want to use for mining.
- EOS Block Producer – MinerGate launched its own EOS block producer in 2018.
- Lumi Wallet – partnership with Lumi Technologies led to the creation of this “secure, simple, independent and private” Android/iOS wallet which can be used to store your crypto.
- MinerGate token – loyalty token of the system, serving as development fuel, loyalty tool and means of supporting the EOS network.
- Affiliate program – lets you market the website to your friends and acquaintances which can net you a kickback from MinerGate’s profits.
Which One Should You Use?
Cloud mining critics will tell you that the practice is generally a scam and won’t really bring you much profit or joy. However, there are a certain number of crypto enthusiasts out there who simply want to achieve some crypto gains without having to go through the process of purchasing their own equipment and learning how to set up and operate the thing. If such a casual approach is something that interests you, both platforms can provide a satisfying service. Whether or not this service does turn out to be as you would like it to will depend on many variables, but the potential to make steady gains with the help of either NiceHash or MinerGate is certainly there.
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CaptainAltcoin's writers and guest post authors may or may not have a vested interest in any of the mentioned projects and businesses. None of the content on CaptainAltcoin is investment advice nor is it a replacement for advice from a certified financial planner. The views expressed in this article are those of the author and do not necessarily reflect the official policy or position of CaptainAltcoin.com