Cloud mining is a method for individuals to participate in mining without owning or maintaining mining hardware or facilities.
Cloud mining companies will offer purchase agreements for part of their total hashrate to customers. Customers don’t own mining machines, they simply own a portion of the company’s hashrate for as long as the mining contract lasts. In exchange for purchasing some of the hashrate, the cloud mining contract will include an agreed-upon payout.
The goal of cloud mining is to remove all upfront costs associated with mining from individuals who want to participate in mining, albeit in a very limited way. But in exchange for removing this hardware, maintenance, electricity, and other costs, ownership and control of the actual mining hardware stay with the company and not the clients.
Several legitimate companies offer cloud mining contracts, but this type of mining service has historically suffered as a target for fraudulent businesses who sell more hashrate than they have or simply disappear with customer funds.
Cloud Mining versus Compass
Compass is not a cloud mining company. Compass offers full ownership of mining hardware to its clients, optionality to move mining machines between different facilities, join and swap mining pools, or sell mining machines to other miners.
With Compass, miners are not simply signing a contract to buy a portion of someone else’s mining operation. Compass miners buy their own machines, direct the Compass team to place them in a facility of their choice, and have full control over the hardware.