Cloudmining or hosted mining is often recommended to generate good profits but let’s today check if and why Cloudmining or hosted mining is (not) profitable for interested people to generate a profit. Is it really a good idea to generate profits from Cloudmining or hosted mining?
After Bitcoin is already very established in 2025, it is not a niche anymore where we can make a profit easily, like from mining. In all belongs, current miners have to compete against highly competitive experts to get a new block.


How mining is working

Mining by itself is designed as a big competition: who will find and mine a new Bitcoin Block next? It is an essential question for mining because if you get a new Bitcoin Block mined, you are eligible for Bitcoin Block Rewards. Block Rewards are 3.125 Bitcoin per Block currently and it will get reduced to 1.675 BTC pro Block for next halving.

But here it is getting tricky: mining is a challenging competition and miners are top competition of professionals.
 
Mining is done under a very harsh competition where we need to compete against experienced businessmen and experienced coders

Mining is done by several experienced industrial and professional businesses under a very harsh competition where we need to compete against experienced businessmen and experienced coders. Top businessmen like from AntPool are very big players and can hire very experienced coders and technically experienced people, where we need to compete against in mining a block. It’s really a big competition.

Mining needs to be competitious and you need cheap electricity to make a good profit. You also need to have a modern miner to be competitious. After some time, new miners will be released where a better technology will create more hashpower.
When you look at a history chart of hashpower, it's always going up which is making mining more difficult.
It is very hard business because you are in competition against industrial and professional business who are able to hire experienced computer experts and finally, maybe you won't get your initial investment back. It is huge risk and can cause huge loss.

A middleman is necessary for Cloudmining or hosted mining

Cloudmining or hosted mining is designed to have a middleman in a factory where your miners are set up and operated by a professional. He will produce costs himself and his revenue share comes on top on your total mining profits.
Hosted miners or Cloud Miners will always charge a fee to set up and operate mining devices which will decrease your mining rewards even more.
If such costs gets too large, your overall profit will almost vanish and when mining business gets more competition, for example when a rising hashrate takes place or Bitcoin price is falling, your revenue share might vanish or turn into negative values because it is not profitable anymore to run your Cloudminers or hosted miners.

A cost for a middleman always comes on top on your total mining profits for Cloudminers or hosted miners and as a result, Cloudmining or hosted mining is simply not suited to receive a good and safe profit.