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There is no denying that there are lot of companies in the cloud mining industry which are launched with the sole intention of defrauding their customers, we have had our fair share of experience with such already. Since its inception, Bitcoin has been plagued by scammers that have cost customers millions of dollars and looking at the big picture, this doesn’t just hurt one or a few users for such a service, it hurts the entire ecosystem. What you should get from bad experiences however is knowledge that will help you make better and more informed choices in the future. Below you can find a list of nine questions that you should ask yourself when considering a new cloud mining company, a list prepared by Genesis Mining, one of the most serious cloud mining businesses out there.
1. Longevity doesn’t mean legitimate.
A mining company that is set up as a ponzi scheme doesn’t have to open and close overnight. There is no way for you to pull your money out, so they will keep on doing business long after you’ve realized you’ve been scammed. That means that a company with 10 months of mining history isn’t necessarily legitimate — keep researching.2. Pics or it didn’t happen.
Datacenters are large operations and you can prove they exist by taking pictures of them. If your mining company isn’t sharing photos of their operation, start asking questions.3. Look for the Asic endorsement.
If a cloud mining company does real business, then they have had to work with an Asic vendor before. These vendors freely give out endorsements to their customers as a form of self-advertisement. A mining company can easily acquire one. No Asic endorsement should raise red flags.4. Beware the discounts.
Remember that in the world of Bitcoin mining, margins are everything. A company that is laser focused on customer acquisition by giving out huge referral discounts (anything upwards of 10%) should give you pause. That’s a sign of a dangerous (possibly devious) business model.5. There should be nothing to hide.
Do you know the people who operate the mine? Are they forthcoming with their identities? A classic sign that you’ve stumbled onto a scam is that the operators go to extreme lengths to conceal their identities. Look for transparency!6. Do they accept credit cards?
Merchant processing is not easy to get for a Bitcoin mining company. The process can be tedious and involves being attached to a real identity so if they are only accepting anonymous crypto payments, this can be a potential red flag to watch out for.7. Are they out and about?
Are the founders or staff regulars at events? Are the constantly contributing to the overall growth of the cryptocurrency industry?8. There are no guarantees.
This almost seems to obvious to say, but it’s been tried before, so we’ll warn you anyway. A company that guarantees you profit from mining is selling you lie. No one can predict what the exchange rate will do or what will happen with Bitcoin next. Guarantees should make you suspicious!9. If it’s too good to be true…
As the saying goes, if it’s too good to be true, it probably is. Are they promising returns far above anyone else in the industry? While profit is the objective, it’s important to always consider if what they are promising is simply too good to be true.
Do note that these are just some guidelines and a cloud mining company not meeting some of these requirements or a one that meets all of them may or may not be legitimate. Also some of these could be true only for large scale mining businesses and a smaller mining operation may not be able to comply with all of them. So while the above may be considered helpful and useful for ruling out many of the possible risky investments, there are no guarantees, sometimes it is all about the gut feeling you are having when checking out a new service. And one more important thing, as we usually say when we start checking out a new cloud mining service – never invest more than you can afford to loose!
- Published in: Cloud Mining
- Related tags: bitcoin cloud mining, BTC cloud mining, cloud mining, Genesis Mining
As Bitcoin popularity and usage continues to grow and along with that it is becoming harder and harder to be mined at home due to large scale mining farms all across the world. Furthermore the things get harder for home miners due to many ASIC manufacturers stopping to sell hardware to end users and focusing either on their own mining farms or supplying large mining operations such as KnCMiner and Spondoolies-Tech. Other companies getting bankrupt due to various reasons leaving just BitMain as pretty much the only Bitcoin ASIC miner supplier offering up to date hardware and shipping to home miners as well as mining farms. This turns users’ attention to cloud mining services, but these can be risky as we’ve seen from our own experience testing many such services over time. The two most significant risks with cloud mining services are them turning out to be a scam and running away with your money or the services turning unprofitable and stopping to mine as they are not able to cover the hardware maintenance costs. We’ve already seen many examples of both, but we’ve also seen some that are still here and continue to operate as we have been using them long term for about a year or so. We have listed the services we’ve been using long term below along with some that we’ve started testing more recently and we are seeing some good potential in them.
Using for a long time already:
– Genesis Mining is one of the most serious entrants into the cloud mining world that we’ve been using for about 12 months already. The company is trying to be open and transparent regarding its mining operations including their hardware suppliers to counter the mistrust issues. Daily payouts, transparency, multiple ways to purchasing cloud mining hashrate. Here is a special promotional code that is giving you 5% discount for every purchase you make – CryptoMiningBlog5.
– Bitcoin Cloud Services is a more anonymous cloud mining operation that we started using about the same time as Genesis Mining, though it is apparently over a year old now. Have changed their initial offer from 5 years to 1 (currently promotional 2 year contracts), but are still here and pay out mined earnings on a daily basis, offer attractive pricing and anonymity is a plus for some people.
– ScryptCC is the oldest cloud mining services we are still using – over a year and a few months already. It looked promising and worked fine unless you had an issue and needed to deal with support from the start, so we’ve had some mixed feelings about it initially. They are still here and still paying out, recently had some data center electricity issues that resulted in a few days downtime and lower profitability for a bit, but it seems that things are apparently resolved now.
Started testing these more recently:
– Mining Sweden is a relatively new entry in the cloud mining scene, starting as a smaller mining operation and with big plans to grow with the help of its users promising to share a part of their own profits. The service offers Mining Shares that are only for cloud mining and VIP Shares that give you not only cloud mining hashrate, but percentage of the profits of the operation. The service also offers users to buy BitMain AntMiner S5 ASIC miners and have them hosted in their data center. Could be a good long term investment as things seem to be working pretty well so far. Here is an extra 10% discount code from the regular prices that you can use, just enter ms10 during checkout
– GigaHash is another new and interesting entrant in the Bitcoin cloud mining scene. It is another small mining operation that is scaling well, started as a private mining investment and after that offering cloud mining services to broader audience. Currently sold out all of the available existing hashrate, but offering pre-orders for the new hardware that is coming to them in a couple of days.
– HashFlare is another new service that has recently launched apparently operated by a Bitcoin ASIC manufacturer, but a bit controversial one – HashCoins. So far it seems that the service is working just fine and is paying out, but be careful with larger investments in cloud mining hashrate here just in case. If you want to try it out, here is a promo code for 5% off for purchases over 250 GHS – HF15SMMR5P2 or 20% off for purchases over 2500 GHS – HF15SMMR20P2.
It has been a while since Genesis Mining has lowered their Bitcoin cloud mining hashrate prices, the last time was early this year when they also lowered the maintenance fees . This time they have lowered the prices slightly without apparently announcing the fact like they usually do and we have just discovered that, though we are not sure when this has actually happened. The new prices are as follows: 50 GHS are available for $22.49 USD ($0.45 per GH/s), 1000 GHS for $419 USD ($0.42 per GH/s) and 15000 GHS for $5850 USD ($0.39 per GH/s) which is roughly between about 8% and 13% down from the previous prices with the maintenance fee remaining at $0.0015 USD per GHS per day. While these prices might not be the lowest out there in the cloud mining industry at least you will be investing in a reliable company that has been out there for quite a while already, so your long term investment should be much safer than if investing in a risky new business that turns out to be a scam. You can also use our special promo code – CryptoMiningBlog5 that will give you an extra 5% discount on the regular prices for every purchase at Genesis Mining, so you can get even better prices.
– You can get more information about the cloud mining services offered by Genesis Mining here…