Cloud Mining Scams: A Deep Dive into Crypto Mining’s Dark Side

Cloud mining is growing in popularity by the day. It all started with the rise of cryptocurrencies, especially Bitcoin, and quickly became the new trend in finance. 

But while many people made a fortune in this field, many others fell victim to Cloud Mining Scams. There are a lot of scammers out there, and there have even been crypto mining scams on instagram. Here is all you need to know to protect yourself.

What Is Crypto Cloud Mining?

Definition

Crypto cloud mining is a process where people can participate in cryptocurrency mining in a cloud. Most cloud mining service users are people who do not have adequate hardware for efficient mining.

How Does it Work?

You can participate in crypto cloud mining by renting the mining capabilities of a company that operates the mining hardware for a certain fee. When the company then mines a block, they split the reward with the customers. 

The appeal of this type of mining comes from the technical requirements of mining. If you want to mine yourself, you need a state-of-the-art graphics card that costs a pretty penny. Naturally, not many people have enough money for such an investment, so the next best thing is to rent the resources for mining. It is cheaper, and you do not have to worry about maintenance. 

There are typically six steps of cloud mining. The first one, of course, is finding a mining company. The next step is choosing a mining package, and you do that depending on how much computing power you need and for how long. 

You then choose the mining pool, pay for the services and start mining. Finally, you receive mining rewards, which vary according to the amount of computing power you own. 

What Is a Cloud Mining Scam?

A cloud mining scam is no different than your regular crypto scam. The scammers trick people into depositing money for a service (in this case, cloud mining capabilities) and then disappear without a trace. 

Why Scams are Common in Cloud Mining

The whole cloud mining market is very new and is yet to be strictly regulated. This gives the scammers freedom to facilitate cloud mining fraud as there is little to no accountability preventing them from conning people out of their money. Additionally, service providers can remain anonymous, which is another reason cloud mining is an appealing field for scammers. 

Types of Cloud Mining Scams

Although cloud mining is a relatively new field, scammers have already thought of many ways to con people. Here are some of the most common ones. 

The first on the list is offering fake cloud mining services. This one is not that sophisticated. The scammers claim to offer this service, which they do not, you give them money for it, and they disappear and cease all contact. 

In the second place, we have phishing. Shady cloud mining providers can send you an app to install, which is malware hiding in plain sight. After you install it, they can hijack your computer, steal your data and empty your bank account. 

How to Spot a Cloud Mining Scam

If you do not know what to look for, spotting cloud mining fraud can be a nightmare. Lucky for you, we will point you in the right direction by showing you the common red flags. 

Red Flags

When you see “100% guaranteed return on investment,” simply choose another cloud mining service provider. Many people want to make their fortune in the crypto world, but the market is still not that stable, and no one can guarantee success.

Secondly, you should sound the alarm if the broker offers very little information about their business. Do not trust anyone with your money who is not transparent about what they do. 

Thirdly, look for possible ways to fund your account and withdraw from it. Cloud mining scammers usually only accept payments in cryptocurrencies because they can stay anonymous that way. So if you can pay for cloud mining services only with cryptocurrencies, you can suspect a scam. 

Analyzing the opportunity

The first thing you should do is check the company information. Legitimate companies will have all the necessary details publicly available and fraudsters will hide them. Those details include domain names, owner info, etc. 

Furthermore, find out how long the project has existed. Young domains usually point to fraudulent activities, as does the lack of website traffic, so look for those when investigating a company.

How to Avoid Cloud Mining Scams?

Preventive Measures 

The best preventive measure is to always think twice before investing. Be inquisitive, and do not stop researching until you are 100% sure the service provider is legit. 

Also, do not put yourself in risky situations. Investigating can be exhausting, and we know you want to make a profit as soon as possible but be patient. It is better to wait for a better opportunity to invest than to give money to a cloud mining provider only for something to “suddenly” go wrong and you to lose all your money. 

What to do if You’ve Been Scammed

Sometimes there is nothing you can do, but other times the chances of getting your money back are good. Start by ceasing all transactions and documenting everything you can about the scam. This can be valuable information that will lead you to your money.

You should also contact your financial institutions and report the scam to them. If you used your debit/credit cards for payment, the bank might be able to help you. If you file a chargeback request in time, there is a chance your bank can revert the payment and bring you your money back. 

Finally, you can seek professional help. Certain companies deal specifically with returning stolen crypto investments, so do not hesitate to contact them if you need their services. And if you do not know who they are and how to find them, we can help you.

Final Thoughts

Hopefully, you learned a great deal about Cloud Mining Scams today. The key takeaways we want you to remember include doing your research, looking for false promises and guaranteed profit, and avoiding risky business decisions. 

Oh yes, and above all, have fun out there. The crypto world can bring you so much happiness; you just need to approach it safely.

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