What is  this Cloud Mining?

Cloud mining is by definition a process in which you contractually rent computing power from remote data centers to mine cryptocurrencies without having to own or maintain mining hardware yourself. It is different from traditional mining, where individuals or companies have to buy and operate their own devices to generate new crypto coins or tokens.

In essence, cloud mining is based on a simple mechanism: you conclude a contract with a cloud mining platform. This provider has a large plant with mining hardware, which it operates on your behalf. You pay a fee for this service, which is usually based on the computing power you want to use. The provider takes care of the maintenance and operation of the mining hardware, while you receive shares in the mined cryptocurrencies, depending on the amount of compute power rented and the current market situation.

This method offers you the opportunity to participate in the mining process without having to have the technical know-how or the physical infrastructure. It is an accessible option for those who want to get into mining but do not have the resources to build and operate their own mining farm.

What kind of mining is there?

Managed Cloud Mining

Managed Cloud Mining is a service in which the provider not only takes over the computing power, but also the management and maintenance of the mining process. This is a worry-free option for those who want to invest in mining without having to deal with the technical details. Of course, a higher degree of trust in the provider and its platform is required.

Cloud Mining Pools

Cloud Mining Pools are groups of miners who bundle their computing power to increase the chances of a reward. Participation in such a pool can also reduce the volatility of mining revenues, as more regular, albeit smaller, payouts are made instead of achieving large but irregular mining success.

Leased Hashing Power

With leased hashing power-based cloud mining, you rent a defined amount of hashrate – the speed at which mining tasks are performed – from a cloud mining platform. Such a cloud mining contract is particularly attractive for beginners, as it requires no technical setup and the services are often directly accessible via a user-friendly cloud mining app.

Hosted Mining

Hosted mining is a form of cloud mining in which the customer rents mining hardware from a provider, which is then hosted in their data center. The conclusion of such a contract offers the advantage that you as a customer are not responsible for maintenance or electricity. Serious cloud mining providers e.g. B. in Germany ensure that the rented hardware works efficiently, and often offer additional services such as security measures and regular updates.

Virtual Hosted Mining

Virtual Hosted Mining provides a virtual private server environment where you can install and run your own mining software. It gives you flexibility and control, but requires some technical understanding to configure the systems and achieve optimal mining results.

Do you have to have a business?

Cloud mining usually does not meet the requirements of a commercial enterprise and is usually treated as income from services in accordance with § 22 No. 3 EStG. Since the taxpayer often does not have direct access to the hardware, cloud mining is often considered an investment.

What taxes?

💰 Taxable: If you sell your cryptocurrencies within one year, an exemption of 600 euros applies (from tax year 2024: 1,000 euros). If your profit is above that, you have to pay tax on the entire amount - not just the part above the exemption limit.

How much capital gains tax do you have to pay?

In Germany, capital income is subject to a tax deduction of 25 percent plus a solidarity surcharge of 5.5 percent of the capital gains tax, regardless of whether the domestic income flows to a recipient resident in Germany or abroad.

When do I not have to pay capital gains tax?

The most important in brief: Capital income is tax-free up to an allowance of 1,000 euros per year (married or partnered: 2,000 euros). If you have generated more than the allowance from capital income, you must pay tax on it at 25 percent in Germany.

Bei diesem Artikel handelt es sich nicht um eine Steuerberatung. Insbesondere dann, wenn deine steuerliche Situation komplex ist, solltest du in Erwägung ziehen, dich von einem Profi – also einem Steuerberater – beraten zu lassen.