What are mining contracts?

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Joined
Jan 2018
From
Chicago
I have a very limited knowledge on cryptocurrency and I've been reading and watching a lot of cideos to learn as much as I can. I'm hearing the term "mining contract" used quite a bit and am not sure what that means. Can someone explain in very SIMPLE language what this means. Please explain this as if I were 8 years old.

Thanks!
 
Joined
Jan 2018
From
United Kingdom
Benji it is actually pretty simple. Imagine a company has a certain amount of bitcoin mining machines they can sell you part of that mining power and that will mine for you.

8 Year Old Version : If an ice cream factory makes 100 ice cream per day. > you can buy part of that capacity > so if you buy 20% you will get 20 ice cream per day

Hope this helps and feel free to ask
 
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