How To Avoid Bitcoin Cloud Mining Scams

bitcoin mining

Bitcoin investment has grown day by day, with cloud mining rising as the new and most efficient strategy to making sound profits. However, for you to invest in this area, you are required to be dependent on bitcoin cloud mining companies, but rarely will you land in the hands of legit ones.

Here is how you can know as well as avoid bitcoin cloud mining companies that are scams

1. Dont have any ASIC miner vendor supportIt is true that most of these legit bitcoins cloud mining companies hard-wares are expensive but worth noting it ASIC vendors will voluntarily and out of appreciation make not only acknowledge but also make public posts about the company they are dealing with.

The purpose is to demonstrate that the company is one of their clients. Worth noting also is that these advertisements are free, and as such, the bitcoin cloud mining company mentioned acquires confidence. As such, most Bitcoin cloud mining companies will request these postings so as they can become known in the marketplace and help promote them as a legitimate company in the highly competitive bitcoin market.Therefore, there should be no reason why any ASIC vendor wouldn’t support the company with whom they do business.

2. Lack relevant photos of both their data center and Bitcoin mining hardwareIt is quite suspicious why a bitcoin cloud mining company would provide you with details of their data center but when you request a relevant photo regarding the details provided, you are subjected to a variety of odd excuses why they don’t have the photo.

Here is the warning: A legitimate bitcoin cloud mining company should provide both the datacenter details and its relevant photos whenever asked and send them to whoever asks for them.Companies that are not scammers, on the other hand, will provide pictures of bitcoin miners whenever asked.

For example, a legitimate company may even provide you a copy of their electric bill to prove that they are legitimate. Scammers will do all they can, and come up with a myriad of excuses, why they cannot provide this or that piece of evidence to verify their legitimacy.Always bear in mind that companies can fake data centers.

So be extremely cautious and demand proof that the company is not fake before doing business with them.

3. Neither does it have a public address or user selectable poolA legit bitcoin cloud mining company will have a public mining address. It is a sign of legitimacy and evidence that the company is mining their available bitcoins on a network.

However, you should keep an eye out since some of the companies have been known to borrow addresses that they don’t own.Along with this, check whether the company owns the address or not. You can request the company to sign blocks, and if it is unable to do so, then the company doesn’t own the address.

In addition, it is worth noting that only those companies that can sign blocks own the address used. It is an important means of attesting to the legitimacy of a Bitcoin cloud mining company.

Did you know that a scam bitcoin cloud mining company that you purchase hashing power from will not be able to direct the purchased hashing power to your preference mining pool? This is another indicator of the company’s illegitimacy.

4. They operate their website domains as anonymousRun, run, run (!) if you come across any Bitcoin cloud mining company website that is anonymous. It is a red flag that the company is a scam. But why? Any owner of any cloud mining company website domain should never at any moment be anonymous since they must provide full contact details during the registration process of their website domains.

As such, legit Bitcoin cloud mining company website domains will not appear as anonymous and one can view all their contact details with ease- they are not hidden. It’s only scammers who will hide their contact details to eliminate any chance of future tracking.

5. Presence of social networking and referral programs for Bitcoin cloud miningIt is true that the mining market sector has very sharp, thin profits and as a result, it gets harder for companies to pay 5%, and even harder to pay 10% referrals. If you come across a company paying these rates, BEWARE! A bitcoin cloud mining company that has referral programs, claiming to pay almost or equal to 10% almost certainly means that the company is fake.

It is worth noting that experts in this industry echo that referral programs are used as a hook to lure in unsuspecting bitcoin miners. Companies that provide posters or advertisements about financial incentives are merely trying to hide the true, illegal, nature of their company.

6. Doesn’t have an exit or withdraw option on its websiteAny legitimate bitcoin cloud mining company that you engage should allow you to both sell the GH as well as withdraw your earnings. However, scammers will always act the opposite.

They will allow you to sell the GH buy on their website, there is no specific place you can withdraw your earning.That is not the way a real bitcoin company operates and is a major indication that you should leave the site immediately and not do business with them.

In addition, if the cloud mining company doesn’t credit any trade bitcoin or sale option of your GH, then they are crooks and you should stay away from them.

7. Those that offer “guaranteed profit.”Scammers use any sensible and attractive way to get you to use their site, and that’s why you will find some of these fake bitcoin cloud mining companies offering a specific, guaranteed profit. This is another reason to stay away.

Why? In the bitcoin mining world, there is no such thing as certain profit.Worth noting is that the bitcoin mining world is very unpredictable. As such, no one has any idea what tomorrow’s BTC price will be and certainly has no clue as to what the price will be in the coming weeks or months.

There is no way to guarantee profits. If they claim they can, then it is a scam.Meanwhile, there are totally legitimate services. For example, one can currently trade bitcoin for goods, services, and exchange it for other currencies, and the applications of this technology are growing in number over time

8. Unlimited IPODid you know that the amount of GH that you can sell is always limited by the amount of mining hardware in your data centers? Since this is the case, legitimate companies will always have limitations, particularly in the amount of GH one can sell.

Worth noting is, the process of getting more hardware in a bid to sell more GH will always consume more time during ordering and delivery process. As such, any company that doesn’t limit sales, it’s all a scam- BEWARE!!Scam cloud mining companies are common and many have fallen prey to their schemes. It only through the above tips that you can avoid them.

Written on 01 Dec 2015.