5 Easy ways to identify Bitcoin and Ethereum cloud mining scam
Cloud Mining for cryptocurrency has been very profitable lately. As a result, many scam projects arise to trick people and make them lose their earnings. Not only that, cloud mining seems to favor those who are not technically inclined and who do not want to mine alone. These individuals become easy prey for scammers to dupe.
How to avoid Bitcoin and Ethereum cloud mining scam
Bitcoin and Ethereum being the most popular cryptocurrency coins are a major target for cloud mining scam. In 2015 alone, over 20 scam cases were recorded. The number has significantly improved since then because sincere miners still do not know how to successfully identify scams on the Bitcoin and Ethereum platform.
Sometimes, miners feel that reading reviews about cloud mining projects is the best way to know if they are scams or not. While reviews are good, depending on reviews alone is not enough.
If you are a newbie to cloud mining or you want to successfully evade scam projects in the business world of cryptocurrency, then here are some basic ways you can differentiate between a cloud mining scam and a true cloud mining project.
How to identify cloud mining scam?
In conclusion, before you use any cloud mining platform for Bitcoin or Ethereum always study the company first. Check to see If they have existed for a very long time or if they just started. Compare reviews from other sincere clients. These will keep you safe from any scam project there may be.
- Unregistered Domain name: A fake company would never get its domain name registered. This means that you cannot track their activities. They are hidden behind a cloak and when their mission has been accomplished, they easily vanish into thin air. Before you accept that cloud mining project for Ethereum or Bitcoin, make sure that the company has a fully registered domain name.
- No provision for Proof of Payments: This is one of the best ways of identifying scam companies. They never provide proof of payments. If you request to be given, they become evasive. Sometimes, they can show you other documents apart from Proof of payments to trick you.
- False payments: Scam companies make it seem as if they pay, but the truth is they do not actually pay. These companies circulate funds from one client to another. They may allow you make an Initial cash out, but the funds you get are the deposits from other clients. This chain of money distribution is not sustainable, so with time it collapses, the scam company stops paying and finally they go out of existence with your fixed funds. To appear trustworthy, they may give you a verified Bitcoin address from which payouts are made.
- Promotion over Substance: You will find them everywhere from blogs, video channels to even media houses. They try to promote their companies without letting the masses and clients know how they operate. When you dig deeper, you'll see that they have no proof of equipment.
- Unreasonable promises: Whenever you find a cryptocurrency mining company offering you very high-profit margins, you have to be cautious. Scam companies make sweet promises that will invoke the interests of Newbies. They might offer you huge cash out in a small amount of time. Always run from such promises.