Cloud Mining or your own Miner? Why rented hashrate almost always loses in 2026

By Dominik Lederer, Founder, Hardware Engineer & Solo Mining Expert · July 27, 2026 · Reading time: approx. 8 minutes

There's a type of advertisement I've been seeing on social media for months: a rented data center somewhere in the middle of nowhere, with the promise that I can earn Bitcoin daily "without hardware, without noise, without effort." Sometimes a celebrity smiles next to it, who is certainly unaware of the campaign. As someone who builds miners with my own hands, I read such ads with a mixture of fascination and vicarious embarrassment. Because the calculation that these providers never show fits on a beer mat. Today, I'm going to demonstrate it publicly.

What is cloud mining and how does the business model work?

In cloud mining, you rent computing power from a provider who supposedly operates mining hardware somewhere. You pay in advance, usually for one or two years, often plus ongoing "maintenance fees." In return, you receive a share of the earnings credited to an account with the provider. You don't own a machine, you don't see a machine, and you can never verify whether your rented hashrate even exists.

This is precisely where the problem begins. The business model has an inherent conflict of interest: if mining with a machine is profitable, the operator earns more by running it themselves. If they still rent out the power to you, it's only because your rental price is above their expected earnings. So, you're contractually taking on their risk and even paying a premium for it.

Why does BaFin warn against cloud mining offers?

The German financial supervisory authority rarely speaks so plainly. But it does when it comes to cloud mining. In its official consumer notice, BaFin writes that such offers "not infrequently come from disreputable actors," and furthermore: "It is possible that providers de facto do not provide cloud mining, but merely want to keep the funds. Once invested, consumers then try in vain to get their money back."

"If consumers receive a cloud mining offer from unknown persons, they should be suspicious. This also applies if they independently become aware of a cloud mining service's website."
Source: BaFin, Consumer Notice "Crypto Assets: Beware of Cloud Mining Offers", 13.02.2023

Mind you: This is not a warning against a single black sheep. It is a warning against the entire category of offers. And it comes from an authority that otherwise weighs every word three times over.

What is the calculated value of rented hashrate in 2026?

Now for the back of the envelope calculation. I'm using this morning's network data and will disclose every assumption.

The Bitcoin difficulty, after the adjustment on July 26, 2026, is 126.23 trillion (the retarget, by the way, was tiny at minus 0.74 percent, source: mempool.space, July 27, 2026). This results in a network hashrate of about 904 EH/s, or 904 million TH/s. The network finds 6 blocks per hour, multiplied by 24 hours, multiplied by 365 days: 52,560 blocks per year. Each block pays 3.125 BTC plus transaction fees, at the current rate of 57,439.11 Euros, this is about 179,500 Euros (exchange rate dependent, as of July 27, 2026, BTC-ECHO).

So, what do 1.3 TH/s, the typical performance class of a Bitaxe Home Solo Miner, accomplish? The share of the network is 1.3 divided by 904,000,000, which results in a block-finding chance of about 1 in 13,230 per year. Multiplied by the block value, the statistical expected value is about 13.57 Euros per year. Not per day, as some ads suggest. Per year.

And with that, the crucial number is on the table: 1.3 TH/s hashrate is honestly worth about 14 Euros in annual earnings on the market. Any cloud mining contract that rents you the same performance for more money guarantees you a statistical loss before even a second of calculation has been done. In addition, many providers charge ongoing maintenance fees, which further depress the balance. You don't need fraud to lose money with cloud mining. Math is enough. The fraud that BaFin warns about is just icing on the cake.

What happens to my balance if the provider goes bankrupt?

The second weakness of the rental model is legal in nature. Your cloud mining earnings are held in an account with the provider. This is not Bitcoin in your wallet; it is a claim against a company. The outcome of such situations was evident just last week: the once largest mining pool, Poolin, filed for bankruptcy, with approximately 163.7 million US dollars in unsecured claims from about 11,700 customers. I described why a balance with a provider is legally only an unsecured loan in my analysis of the Poolin bankruptcy and its consequences for miners. In cloud mining, this dependency is even greater, because you don't even own the machine.

Your own solo miner reverses this relationship. If your device finds a block, the Bitcoin protocol directly credits the reward to your address in the Coinbase transaction. No account, no withdrawal request, no insolvency estate. The protocol doesn't have customer service, but it doesn't need it either.

How to identify a dubious cloud mining offer in 4 steps?

If you still want to check an offer, here's my approach. Step 1: Calculate the expected value yourself. Take the rented hashrate, divide it by the current network hashrate (mempool.space shows it live), and multiply by 52,560 blocks and the block value. If the contract price is higher than the result, you're done. Step 2: Search for the provider in BaFin's warning list and company database. No entry as a regulated institution plus big promises of returns is a red flag. Step 3: Demand proof of hardware, such as signed messages or verifiable pool accounts. "Trust us" is not proof. Step 4: Check if fixed daily returns are promised. Mining has no fixed returns; the difficulty changes every two weeks. Anyone promising fixed interest rates is not doing mining, but marketing.

Cloud Mining or your own miner: Which is the better choice in 2026?

You already know my answer. But I'll back it up with numbers, not gut feeling. A Bitaxe Gamma 601 costs a one-time 149 euros and consumes around 149 kWh per year. At the German electricity price of 31.1 to 35 cents per kWh, that's 46 to 52 euros in electricity costs annually. In return, you own the hardware, it has a resale value, you get to know the Bitcoin protocol from the inside, and the block-finding chance of 1 in 13,230 per year is entirely yours. I've been saying it openly in every calculation for months: Even the Bitaxe is statistically a loss-making venture; the expected value of around 13.57 euros does not cover the electricity costs. If you want to see the sober derivation, you can find it in my honest expected value calculation for the Bitaxe. The difference to cloud mining: With the Bitaxe, you pay the difference to your electricity provider and, in return, own a piece of hardware and a real lottery ticket. With cloud mining, you pay the difference to a provider whom you have to blindly trust, and in the end, you own nothing.

Lifestyle Factor	Bitaxe Gamma (17 W)	Traditional Lottery	3500-W Industrial Antminer
Chances of Winning per Year	Approx. 1 in 13,230 for the entire block: 3.125 BTC plus transaction fees, currently approx. €179,500 (exchange rate dependent, as of 27.07.2026). The ticket runs 24/7, instead of expiring on Wednesdays.	Eurojackpot: 1 in 139,838,160 per tip. Over 10,000 times less likely, and the ticket is waste paper after the draw.	Approx. 1 in 64 per year, numerically strong. But the stake for that is a five-figure electricity contract instead of a hobby.
Running Costs in Home Office	€46 to €52 electricity per year, about a coffee per week. Runs in any outlet, quieter than your refrigerator.	Two tips per week cost well over €200 over the year, entirely without a device and without residual value.	Over €10,700 electricity per year at 35 ct/kWh, plus high voltage current, plus a noise level that makes any apartment uninhabitable.
Drawer-Danger (Boredom Factor)	Low: AxeOS dashboard, firmware updates, overclocking, and the daily question "did it happen last night?" keep the device alive.	High: Cross off numbers, lose, forget. No learning effect, no technology, no conversation starter.	High: The device inevitably disappears into the basement or hall, as it cannot exist next to humans.
Learning Effect & Blockchain Fascination to Touch	Maximum: own node connection possible, open firmware, real understanding of difficulty, shares, and Coinbase transaction.	Zero. The drawing machine is in the TV studio, not on your desk.	Present, but buried: industrial firmware, closed systems, optimization only via Excel instead of curiosity.

"Cloud mining sells you a promise whose value you cannot verify. Your own miner sells you a probability that you can calculate yourself. I know which business I'd rather do."
Dominik Lederer, Founder Polarblocks

Frequently Asked Questions about Cloud Mining and your own Miner

Is Cloud Mining even worthwhile in 2026?
Mathematically, almost never. The fair market value of 1.3 TH/s in solo mining is around 13 to 14 Euros in annual earnings (as of July 27, 2026). Contracts that demand more for comparable performance produce a guaranteed statistical loss, plus you bear the full provider and insolvency risk.

Is Cloud Mining legal in Germany?
Renting computing power is not prohibited. However, BaFin expressly warns that many offers come from disreputable actors and sometimes no mining is actually behind them. Legal does not mean reputable.

What is the difference between Cloud Mining and Solo Mining with your own device?
In cloud mining, you own nothing: no hardware, no payouts without a provider. In solo mining with your own device, you own everything: the machine, the chance, and, if successful, the entire block reward of 3.125 BTC plus transaction fees, directly to your address.