The growth of cryptocurrency and blockchain continues to attract the attention of investors and anyone interested in this business. There are many people who want to make money with cryptocurrencies like Bitcoin. Nowadays, cloud mining is considered to be one of the strategies for making profits. However, investing in cloud mining means you have to trust the cloud mining companies. Unfortunately, not all of them are legitimate, and many of them are not trustworthy and are just scammers looking for your money. Fortunately, there are some things you can keep in mind to protect yourself. In this guide, we will give you some tips on how to identify such scammers in order to protect your bitcoins.
Avoid The Companies Promising You Profit
Ensuring profit is a popular marketing strategy used by many companies. However, legitimate companies will never do it because they simply cannot make such promises. The main reason for this is that your profit does not depend on them – it is based on the evolution of the cryptocurrency and the amount of money you have invested. Therefore, reputable cloud companies will never try to build their image and attract customers by making empty promises and using fake ads. If a company promises you profits, you need to be careful – this is one of the most common signs of a cloud mining scam.
Verify The Public Address of The Company
Most of the time, reputable mining companies have a public address associated with their cloud mining pool. This public address is the first one you should pay attention to as it is a sign that the company owns the equipment and operates on the network. The easiest way to verify the address is to ask the company for a signed transaction/message, especially if you’re going to be making a big investment. If the company refuses to give you a signed message. it is most likely a sign that they do not own this address. In this case, you must move away.
Make Sure You Can Withdraw Earnings
Before you start working with a certain cloud mining company, check their website and make sure there is a way to get the income you can earn from that site. It is not recommended to work with the company that only allows its customers to sell on their website to someone else. Take your time and review the policies implemented by the cloud mining company. Before deciding to start working with a certain company, check if you need to sign a long contract and how much you should spend each month. Knowing these details is extremely important.
Beware of Lifetime Contracts
One of the most common scams in the cloud mining industry is a lifetime contract. At first, lifetime contracts may seem like a good deal because they allow you to maintain the same costs throughout the life of the business. You may also feel that you are getting good payback. However, it is important to understand that the difficulty of mining will continue to increase. This means that even if you continue to pay the same amount in the future, your profits will decrease as your hashrate won’t follow.
Check The Company’s Pages On Social Media
Most fake cloud companies will not have social media pages. Even if they do, their pages will likely be made up of content that is manufactured, grown in an inorganic and standardized manner. You should take your time and carefully analyze the company page: pay attention to the number of likes, customer reviews and comments in published articles. Also, pay attention to how often the company posts videos and photos on its page. If the page is empty and the content has not been updated for a while, this may be a sign of a scam.
Analyze The Level Of The Company’s Transparency
Make sure to check the company website carefully and gather as much information as possible about it. Remember that if the company publishes the details of its servers and data center, but does not provide any evidence such as photos, videos and electricity bills, this is quite suspicious and may indicate a scam. However, you should also understand that this tip is not an absolute guide – there are many legitimate cloud mining companies that prefer not to make this information available to the public. However, they will still provide you with proof upon request. Therefore, if you can’t find all the information you need on the company website and have doubts about its transparency, you can always contact their administrator before investing your money.
Check How Popular The Company Is
To check whether the company is popular and has a good reputation is easy. All the information, including guides, online reviews, and articles about the company are available online. There are plenty of cloud mining forums where customers share their experiences about cloud mining companies. Therefore, make sure you do some thorough research about the company.
Stay Away From Anonymous Operators
If the owner of the company is anonymous, it is better to move on. There are almost no reasons to be an anonymous owner of a cloud mining company unless you are a scammer and trying to hide something. Ask the company for identification, and when it provides it, make sure you double-check it and ask around. There are certain questions you need to find the answers to: how long has the company’s domain been registered? Is the owner of the company hidden behind private registration? The more information you can find about the company and its owner, the better.
Be Aware Of The Companies With The Lack of Product
Lack of product is one of the main red flags that should warn you against a cryptocurrency cloud mining scam. Mining companies that focus more on recruiting new members rather than selling their services and products are suspicious. If the promotion is more important to a business, it does not necessarily mean that the business is a scammer. However, this can be a sign that it is not reliable and legitimate.
Be Careful With Companies Whose Directors are Foreign Residents
The directors of many fake cloud companies are foreign residents. First of all, it gives the illusion of prestige. Second, the identity requirements of foreign residents are easily rigged and difficult to verify. Therefore, if you notice that the leaders of the company are from another country than the operating one, you must be careful and deepen the research on the company before working with it. Cloud mining can be a good investment option for you. However, you should be careful when choosing a cloud mining company. Choosing the first company you see is certainly not the smartest idea. Instead, you should follow the advice we have provided to you to reduce your risk and protect your funds. Make sure that you do not rush into investing money until you are completely sure that the cloud mining company is legitimate and that there are no hidden pitfalls.
Remember that you should never settle for the best, and always weigh all the pros and cons when choosing a company to work with.