Why does cloud mining have a “controversial” reputation
The complexity of cryptocurrency mining is growing every day. Today, there is an option to rent powerful mining equipment without investing in the purchase of miners. You can remotely mine the very coin that brings profitability. This type of investment is called cloud mining.
This interesting way makes it possible to mine people living in countries with a high cost of electricity, those who are not very well versed in the assembly of equipment and other nuances. But whether everything really works, as equipment lessors say or is it a divorce, we will understand.
Cloud mining has earned itself a controversial reputation due to the huge number of scammers on the cryptocurrency market. Users are seduced by colorful ads that promise big and easy money. People who have just entered this business rent capacities on unverified services, believing in the promise of profit from 300% per year and even more!
Unscrupulous services regularly appear that do not actually provide any equipment for rent or hold farms. They collect user money supposedly for power. Such scam services work on the principle of a financial pyramid. Newly arrived users buy pseudo-capacities, with this money payments are made to existing users, then new ones come, pay again, and old ones get mine again and enjoy life, until, at one fine moment, the shop closes. With a lot of money, the founders disappear and the pyramid “falls apart”.
Such platforms are called scam services. They should be bypassed in all possible ways!
Here are the main criteria by which you can determine scam:
- Such servers hide the address of the pool where they allegedly perform mining. It makes no sense to hide this information from the user. If the server is hiding something, then this is at least suspicious.
- No information or photos provided. Companies with a good reputation present any evidence, at least a photo of the premises where they hold their facilities. The best option is to monitor the operation of equipment in real time through a webcam, which is installed in a room with capacities.
- Offer to buy unlimited power. Such an offer can only be done by scam service. In any case, there should be some restrictions.
- Guaranteed a big profit. Guaranteed a big profit can only scammers. Mining is a risky area of activity and no one can give any guarantees for big profits. On verified sites for mining, only the alleged income of the investor can be published.
Benefits of Cloud Mining
The undoubted advantage of cloud mining is its low entry fee. Anyone can enter this business. To test the service is enough and $ 30. You can earn immediately after the conclusion of the contract, and withdraw money – at any convenient time.
The whole process of cryptocurrency mining is remote, there is no need to rent a room for miners and purchase expensive equipment.
The companies that organize cloud mining place their equipment in a place where the most favorable tariff for electricity. This helps to save and increase revenue for users.
Cloud mining is a great option for those who do not have enough capital to buy equipment, as well as for those who do not understand the rules for installing and configuring software for its operation. The equipment itself is run by professionals. This is another undoubted advantage, the user does not need constant monitoring, which makes cloud mining accessible for busy people.
The cryptocurrency mining process is automated, and the profit is regularly credited to the user’s account. Mining cryptocurrencies alone is difficult, unproductive and costly. Cloud mining makes this business more affordable.
Since there are a lot of scammers on the cryptocurrency market, the question arises: is it possible to make money on cloud mining? Legal companies, of course, are not few, but scams who want to get your money are much more. About services that deceive people, there are many reviews and information on thematic forums.
The contract usually indicates the profit that can be obtained from cloud mining, but this is only the possible profit, without any guarantee. The amount is determined at the time of signing the contract, but the coin may lose its position. Falling rates on the cryptocurrency of your choice can lead to a decrease in payback. For example, instead of the promised 200% per year, profits can instantly drop to 100%, 50% or even less.
Moreover, even reliable companies may change conditions. In the cryptocurrency market, the situation is changing every day, and not a single company will operate at a loss. First of all, the owners of the service earn on cloud mining, and only then all the others. Profit depends not only on the current value of the cryptocurrency, but also on other factors – the same electricity, for example. But the biggest impact is the complexity of cryptocurrency mining. The complexity of the algorithm leads to the fact that 4-6 months after the conclusion of the contract there is a loss-making dynamics.
Another disadvantage is the difficulty in withdrawing profits. Even if you are in the black, it’s too early to rejoice, you still need to receive money. For many reasons, cloud mining companies can drag out this process, explaining payment delays for various reasons. Or, the situation may be generally stalemate – work and all obligations of the service can be frozen for an unknown period. Enter the service with money, no problem, but getting them back is not always easy.
And yet, is cloud mining a scam or not
All the same, despite all the risks, cloud mining cannot be called a divorce. In the case of legal services, everything is written in the contract, and fraudsters can be easily recognized. ProstoCoin has compiled for you a rating of 100% proven services that have been operating on the market for more than a year and successfully pay money. These include HashFlare, IQ Mining, AlienCloud and others. You can see the full list here.
As you can see, the obvious advantages of cloud mining cover a large number of minuses, which makes this type of earnings an excellent option for those who cannot or do not want to purchase their own mining equipment for various reasons.
In fairness, it is worth noting that a competent approach can bring the user a good regular income in the field of cloud mining in accordance with the exchange rate of coins. Nevertheless, you need to be very vigilant when signing a contract with a company that provides cloud mining services, because you can get caught in a divorce, which quite often happens with novice miners.
Never believe the first project that catches your eye, do not impress with loud promises screaming from the main page of the site. Find out as much information about the site as possible from various sources, study reviews, take an interest in the experience of friends, carefully read the contract and study all the conditions of the contract.