Home Bitcoin Scams Bitcoin Mining Scams- A Quick Look at Cloud Mining and Associated Scams

Bitcoin Mining Scams- A Quick Look at Cloud Mining and Associated Scams

by Josh Pit
Bitcoin Mining Scams- A Quick Look at Cloud Mining and Associated Scams

The first cryptocurrency to be introduced was Bitcoin and initially, people had to ‘mine’ Bitcoin in order to get these coins. The problem with traditional form of mining is that it requires a lot of equipment, which can be expensive for people. Moreover, it also involves high consumption of electricity, which again increased cost. While the process was made easier over time, it was still very complicated for people and so they began looking for alternatives. This is where Bitcoin cloud mining was introduced. As Bitcoin investment continues to grow, cloud mining has become a new and most efficient strategy for making high profits.

However, it can be tricky to determine if Bitcoin cloud mining is completely safe in the crypto world and exactly how cost effective it is. Most people would prefer to continue trading Bitcoin, but if you do some research, you will come to know that Bitcoin cloud mining has the potential of offering you a greater return on investment. There are several factors that determine what kind of return you will make. It begins with the fee involved in this process, the time it takes for you to mine Bitcoin, the upfront cost as well as the market value of Bitcoin.

The best thing about Bitcoin cloud mining is that if the costs are reasonable, you can enjoy some great rewards. In fact, they can get even better if the price of Bitcoin rises in the market, leading to a substantial return on investment. Once you decide to invest in Bitcoin cloud mining, you have to understand that you need to find a cloud mining provider. It is a fact that the increased popularity of the Bitcoin cloud mining industry has led to an emergence of opportunistic crooks, scammers and fraudsters operating in the space.

Hence, it is vital for investors to ensure that they are only dealing with reputable and legitimate companies so they do not end up becoming a victim of such scams. Bitcoin mining scams have become quite common nowadays because people don’t have a lot of knowledge about how this process works. In order to find the best cloud mining providers for your needs, you should do some research. This involves searching on forums, industry news sites and Reddit sub-forums where you will find a list of mining services along with customer feedback they have received.

Many times you will discover that people will share their experiences with different cloud mining services and will expose scams, along with providing details if a service is legitimate. One important thing you should remember is that these scam services often purchase advertising space on different forums, subreddits and news sites. Therefore, you need to be very cautious and not fall for these tactics as it is your hard-earned money at stake. If you come across an ad for a Bitcoin mining service, but you cannot find much information about it, then due diligence is essential.

This means asking about the service on a subreddit or a forum or even contacting the news organization where you saw the ad on and getting their feedback. In most cases, people will be able to provide you with useful information or refer you to websites where you can get it. There are a number of benefits associated with cloud mining due to which it has become so widespread. Let’s take a look at some prominent perks:

Pros

  • You don’t need any noisy or heat generating equipment in your home.
  • There is no need to worry about maintenance as it is the job of the cloud mining service provider.
  • You don’t have to pay any installation or setup costs because hosting centers will keep all the mining gear and run it at their location. Some of these services charge a one-time setup fee for this purpose.
  • There is no need to purchase any extra equipment to get your mining equipment running.
  • It eliminates the risk of fire or any other similar issues that often occur when you are running it yourself.

Before you can reap all these benefits, your priority should be finding a trustworthy Bitcoin cloud mining provider. If you don’t want to be a victim of Bitcoin scams, you need to know exactly what to be on the lookout for. Some of the primary characteristics that distinguish legitimate companies from scam ones are outlined below:

  • Scams will register their domain names as a fake user

There are a plethora of tricks and techniques that can be used by con artists for deploying scams. But, a major part of these schemes involves running counterfeit and fake sites. Typically, there are a number of factors that you can use for determining a counterfeit site. One of these factors is the domain name of the website, which is usually registered in the name of a fake user. Even though these sites may appear to be legitimate, you should bear in mind that they have been developed from scratch with the sole purpose of swindling unsuspecting users.

In order to check the authenticity of a website, you first need to determine whether it is owned by a real person or not. There is a Whois service offered by all domain name registrars that allows you to check the name of the person behind a domain name and also check some technical details about the website. If a domain name has been registered for fraudulent purposes, the Whois section will include inaccurate information. If the owner’s name and their contact information doesn’t seem legitimate, you should steer clear because it could just be another Bitcoin mining scam.

  • Scams publish pictures of people unrelated to the project

Bitcoin cloud mining companies will provide a list of their team members on their website. You should take your time to check all the team members and see if they have any knowledge of the company. Do these people even exist or are they fictitious profiles? There are numerous cloud mining sites that use names of prominent people in the blockchain and crypto industry on their websites. You should take a look at their profiles to see if they are truly associated with the said company or not. If you Google their names, you will be able to find them on different platforms like Google, LinkedIn and GitHub.

However, bear in mind that having a presence on these social media platforms is not enough to confirm their existence. Check when they signed up on the platform and how active they are. If the account is less than four months old, there is a good chance they are just impersonating someone.

  • Scams will offer you guaranteed returns

One of the most common characteristics of crypto scams is that they will offer you guaranteed returns. Everyone has heard of that old adage, ‘if something sounds too good to be true, then it probably is’. Thus, this means that you need to be wary of any website that’s making you promises of making massive amounts of money from the comfort of your home. For instance, a company offering to turn your $1,000 into $10,000 in a month is most likely a scam.

These scam websites will offer people daily rates of return that are extremely high. After you have made an account, they might send you some payments, but soon these are wiped out, along with your deposits. Other sneaky tricks that might be used by fraudulent companies are Ponzi schemes. You are probably receiving someone else’s money and it will eventually disappear.

  • Scams will have a suspicious digital footprint

In the real world, when you want to find out the character of a person, what do you do? You obviously speak to their family and friends. The same logic can also be applied to online companies. There are strong chances that other people who have had an experience with a cloud mining company have shared details about it somewhere. The top search results in Google are often a compilation of user reviews a company has received.

Other than using search engines, you can also take advantage of social media. You can speak to other people who have used the cloud mining provider and ask appropriate questions before you invest. It should be noted that it is crucial to ensure that you are checking reviews and feedback from sources that are unaffiliated with the provider. Go through what other people are saying about the service and then draw your own conclusions.

  • Scams will often offer you great promotions

One of the biggest red flags that should drive you away from a Bitcoin cloud mining scam is the absence of product. Mining companies that are more focused on recruiting more new members rather than selling services and products may just be another Ponzi scheme. A business focusing more on promotion is definitely a red flag, but not necessarily a scam. But, it is an indication that you should look deeper into the company before signing up with them.

  • Scams will not have any relevant photos

Another indication common in Bitcoin mining scams is the lack of relevant photos of their mining hardware as well as their data center. It is extremely suspicious of a company to provide you with details, but not confirm them through proper photographs. When asked, they will present you with a variety of odd excuses. Like other crypto scams, Bitcoin mining scams are common and they have spread from the traditional mining scene to cloud mining. You need to be able to spot these scams in order to avoid them and take full advantage of Bitcoin mining.

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