Power Mining Pool

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What do cryptocurrency mining scammers look like

Whether it’s Power Mining Pool today or Bitconnect yesterday, the cryptocurrency space is filled with scammers and opportunist scams. The conditions are ripe, and there is an opportunity to get money.
Among other dangers, Bitcoin mining fraudsters are quite difficult to determine, which makes it difficult to separate the grains from the chaff.
Such scammers use the technically difficult task of mining Bitcoin to disguise themselves.
They are offered as a convenient way for consumers to profit from mining, which are really valuable for investors who want to diversify their investments.
Real cloud mining pools too often find themselves buried in search results, giving way to crowds of one-day firms.
Finding real pools can be a daunting task and may require a long reading of Reddit posts and Bitcointalk forum posts.
However, there are real cryptocurrency mining enterprises. As always, do your own research and be skeptical until this wild frontier has yet to be fully mastered.
For now, let’s see what cryptocurrency mining fraud looks like in order to better prepare you for identifying key alerts.

Cloud mining pools and Ponzi schemes

Let’s clarify what cloud mining is and why it attracts Ponzi schemes like Madoff, faster than honey attracts flies.

What is a cloud mining pool

A cloud pool is the most convenient cryptocurrency mining option of all existing. They allow participants to rent capacities that do not belong to them directly.
Then, the leased facilities are combined, and remuneration is paid to the participants in proportion to their contribution (after deducting fees and operating expenses).

The critical difference between a cloud mining pool and a traditional pool is the ownership of the equipment

  • Cloud mining: you do not have your own equipment (hashing facilities).
  • Traditional mining: you have your own equipment (hashing power).

 Why do we need pools at all? In short, getting rewarded for a block becomes too difficult as the total hash power of a particular blockchain increases.
As an example, let’s take Bitcoin. There was a time in Bitcoin mining when a standard processor could mine whole blocks on its own.
These times are a thing of the past. Bitcoin mining is currently a large business with a large number of stakeholders who use their resources to ensure the security of the blockchain.
Miners with serious powers make it unlikely that small miners will be able to get a block reward. Their capacities are simply not enough to compete.
Solution: gather all these small players and combine their hash power. Miners in the pool no longer compete for the right to mine blocks, but look for them together and proportionally divide the loot.

 What is a Ponzi scheme

Let’s face it – this is theft. If you are in the Ponzi scheme, then either you will be robbed, or you yourself are a robber.
A typical Ponzi scheme involves enticing participants to invest their money in a fund or investment strategy that supposedly guarantees profitability.
In fact, their income is not derived from real trading or superior business acumen.
On the contrary, new investments in the fund are distributed among existing investors and are presented in the form of market profit.

Charles Ponzi is notorious for creating this investment scheme.
Ponzi schemes require a constant influx of new investment in order to keep the machine moving.
As soon as the influx of new investment slows down, the scheme is often disclosed. In the cryptocurrency world, the collapsing Ponzi scheme is accompanied by a fraud with the withdrawal of funds.
Keep in mind that Ponzi schemes flourish in times of economic expansion and speculative bubbles.
For their success, it is important to catch the wave of collective optimism. Bitconnect is a prime example of how fever in the market affects investors.

Detection of alarms specific to Ponzi cloud mining schemes
Firstly, the duck test. If something looks like a duck, swims like a duck and quacks like a duck, then it’s probably a duck.
The duck test is not scientific by any standard, but can be used to tap into intuition and identify early signs.
Ponzi schemes, both on Wall Street and in bitcoin mining pools, have common characteristics.
If the option you are considering has the same features as the previous Ponzi schemes, this is probably what it is.
Let’s take a look at some of the criteria or general characteristics of Ponzi’s Bitcoin cloud mining schemes.Alarms specific to Ponzi cloud mining schemes (adapted based on criteria compiled by Puppet).

 Lack of a public address for mining / users can not choose their own pools
When you rent capacities from a cloud miner, you only rent these capacities. This means that you must choose the pool you are contributing to. The cloud mining operator from whom you rent capacities may have its own pool for convenience, but should not require that you use only it. The pool has no reason to hide its public address – it is simply pointless.

Lack of recommendations from equipment suppliers / ASIC’s
Since the vast majority of cloud mining enterprises turn out to be Ponzi schemes, it is practically necessary to seek feedback from equipment suppliers so that customers know that the company really has miners that will work on their behalf. If your cloud mining company cannot prove that it owns its equipment (without raising other issues), then you should think again.

 Lack of photos or videos of their equipment or data centers
Miners are usually silent about where their data centers are located. Therefore, do not expect to find reliable images or videos that reveal the location of the property or owners. However, some evidence must exist and, except for the location, photos or videos should not look like they are hiding something.

No restrictions on the number of mining facilities that you can rent
Cloud mining service providers always have a limited supply of hashing power. In addition, the expansion of the enterprise takes time and may be limited by ASIC’s market supply and other factors. A cloud miner that does not share equipment data with its customers looks doubtful. It is noteworthy that criminals often promise instant and unlimited scalability.

Referral Payout Schemes
Often, mining Ponzi schemes also have a multi-level marketing system to stimulate the attraction of new investments. Members are encouraged to develop their own teams, and each new member they invite increases their reward.

Operator Anonymity
If the owners are anonymous, it is better to pass by. The cloud mining operator has virtually no reason to remain anonymous. If they provide identification, double-check it, ask all your questions, and exercise extreme caution.

There are no obvious ways to withdraw funds.
There should be clearly defined methods for withdrawing funds or closing lease agreements.

Power Mining Pool: Ponzi Cloud Mining Study

A textbook example of a Ponzi cloud mining scheme is the Power Mining Pool.
Power Mining Pool is a typical Ponzi scheme and even includes a multi-level marketing (MLM) referral system.
Looking back, it is now much easier to see the alarms that were present at that time. After the “fight” everything seems obvious.

Signal No. 1
Power Mining Pool did not have a public mining address and did not allow coins to be mined outside its own pool.

Signal No. 2
Lack of recommendations or endorsements from equipment suppliers. It is impossible to find anything on Reddit, Telegram, BitcoinTalk and so on.

Signal No. 3
Serious lack of informational images. The Power Mining pool archive shows a website full of stock images and slurred copywriting.

In addition to blurry images, there is a video that gives almost no idea about the company.

Signal No. 4
No restrictions on the size of investments. Power Mining Pool sold mining power in the form of shares that any investor could acquire without any restrictions.

Stocks are not only your requirement for a guaranteed profit, but they also provide you with many opportunities to rise in the MLM reward system.

Signal No. 5
From assistant to president, members can rise in the hierarchy, both by acquiring new shares in the pool and by successfully attracting new members.
When you receive each new rank, you received bonuses and higher profits.
However, in order for you to move up the hierarchy, your referrals also had to move up.
You not only need to attract new successful participants yourself, but your referrals must do it too. Common situation?

Signal No. 6
The founders of the Power Mining Pool are brothers who live in Central Europe. And this is all the available information about them.
A search by their names, Andrew and Mike Conti, is about as useful as their cartoon images on the site.
In addition, a WHOIS search for a company’s domain indicates that the administrator’s contacts are hidden by the domain name privacy service.

Signal No. 7
After the termination of work, Power Mining Pool left with the main investments of investors. First, the accounts of members receiving their daily mining profit went, as promised.
However, early participants in Ponzi schemes often make a profit, while their initial investment is pumped to other participants.

Signal No. 8
“Each share you buy will bring you 70 €.” The promise of profit has disappeared from the company’s website. Each share cost members 50 €, that is, the Power Mining Pool guaranteed participants a 40 percent return.
Power Mining Pool is just one example of a Bitcoin cloud mining service riddled with alarms and warning signs.
In fact, there is evidence linking the Power Mining Pool with other Bitcoin cloud mining scammers. Fighting these patterns is a fight with hydra: closing one creates three more.

Conclusion

The fact that there are alarm signals does not always mean that you have a scam in front of you.
They are early warnings and alarms recommending that we look a little deeper, explore further and remain skeptical.
Questions and suspicions are not dangerous in themselves; ignoring them is dangerous.
The Power Mining Pool was filled with reasons for concern and clarity.
This is just one example from a long line of Ponzi Bitcoin cloud mining schemes. BitClub Network, HashOcean, Coinmulitplier Club, MinersLab, and Bitcoin Cloud Services are just a few other examples.
Unscrupulous operators deceive people and rob them of their money. If you see any reason for concern, share it with the community, ask the operators to be clear, and be careful. Do not keep it a secret.

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