Cryptocurrency News

How to Identify Whether a Cloud Mining Platform is a Scam?

Aug 24, 2019 at 10:38 // News

The use and adoption of blockchain and cryptocurrencies including Bitcoin, Ether, Ripple and others, has continued to grow worldwide.

The use and adoption of blockchain and cryptocurrencies including Bitcoin, Ether, Ripple and others, has continued to grow worldwide. Nevertheless, a lot of cryptocurrency maniacs cannot manage to purchase expensive paraphernalia to carry out mining and that is the reason why they decide to seek other best alternatives such as cloud services, that can properly work for them.

Cloud services are on the increase even though most people in the cryptocurrency industry don’t understand it, and the going-on has proved to be generating real profit provided adequate investments are provided. The process offers hashing power for rent, and this therefore means that there is no need to buy, install or look after the rented equipment.

What to Consider Before Joining a Cloud Service  

With this alternative, there is actually no worries with power bills, noise pollution and attendance problems. A participant just becomes a member of the team, get to unite with the rest of the users and then carry out cryptocurrency mining efficiently.   

However, the challenge has been to find a dependable platform among many scams which arise unexpectedly. Let us see some major recommendations which will enable those interested to choose a reliable service and circumvent being scammed or cheated.   

1.      Look into the public address
2.      Don’t focus on services which provide an iron-clad success guarantee
3.      Look into the firm’s level of transparency
4.      Check the reviews and customer feedback
5.      Check the social media activity
6.      Confirm whether the service provider has mining farm
7.      Discover what type of rigs they are using
8.      Look out if the platform promises you high profit immediately after you purchase the contract
9.      Understand how to compute profit
10.  Completely and properly read and understand the contract details before you make any purchase   

Cloud mining experts also offer additional advice on how to protect your funds against scam. Anton Makarchuk, the CMO of
CryptoUniverse, the Eurasian largest multifunctional cloud mining service, who has been working in the company from the beginning and has strong knowledge in mining processes, told Coinidol:  

Screenshot at Aug 24 13-36-00.png    

“To tell whether a given cloud mining service is not a scam, you need to look for several things:
1) Confirmation that the company owns its own mining equipment, and enough of it.
2) A lot of information about it online (both positive and negative reviews). There needs to be a lot of reviews, as that confirms that the company has a lot of clients. If there are only positive reviews online, that’s a hint that there’s something fishy going on. There is no company that satisfies 100% of its clients.
3) Being registered in a “good” jurisdiction. A company that is registered offshore or isn’t registered at all inevitably raises questions. When a company is registered in the EU or a “favorable” Asian jurisdiction, that allows for clients to turn to a just court system in the event of a dispute.”   

Advantages of Disadvantages of Cloud Mining   

Traditional pools need dedicated rigs. People who participate in mining want to learn how to set up a rig, arrange program, take care of a facility, look for adequate and cost-effective electricity.   

Nevertheless, common people find it hard to access all these basic resources, hence becoming a big barrier for cryptocurrencies mining investments.   

The pros of
cloud services include: fragmental investment friendly; no special skill is needed; and save time and electricity. The cons include: contract providers sometimes flee; frauds; contract providers tend to turn off rigs when the token’s price connected to the contract drops to the lowest point where revenue can’t pay for cost for particular period. 

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