At this moment bitcoin cloud mining is not profitable. A cryptocurrency is made up of several blocks of code. The difficulty to find another block increases over time. Now due to the high difficulty and the “low” price of a bitcoin, the price is little over €5250, together with the maintenance cost, cloud mining is simply not profitable at this moment. Mining of other coins might still be okay, but in the end the coins that can be mined will become too hard to mine. This process would be called PoW, or proof work. As a miner you, or the company you invested in for cloud mining, get a reward for spending computer time, computer calculations, in finding a new block. The more computer power you use to more reward you get.
An other way is PoS, proof of stake, this is like getting interest on your currency. This is the way the second most popular coin Ethereum will go to. Also as it costs more and more energy to find another block it is costly for the environment. In PoS the more you have of a coin the more you get as reward. You can do some research on which coins work well as PoS coins to invest in and which wallet to use. For example there is reddcoin, neo, qtum and soon ethereum. Depending on the coin some will offer you a lower or higher percentage. For the coin Neo I know this gives you the NEO-counter part GAS. The idea is that at some point you exchange the GAS into new NEO coins. While on an exchange you can have for example 0.1 NEO in your wallet and sending NEO you can only use whole numbers of NEO.
One last thing the amount of PoS currency you have in an exchange will mostly not generate anything. However I heard that some currency exchanges do offer this, but I do not know which ones.