Bitcoin and Ethereum Cloud Mining Scams : How to Identify | Its Blockchain
Scams in Bitcoin and Ethereum Mining
Any new industry’s success rate is proportional to scam rate. Yeah, as soon the industry grows, scams and fraud in that sector also increase. If we talk in the context of cryptocurrencies, doesn’t matter how secured and unhackable they are, scams and fraud are happening. From scam coins to mining rigs and contracts there are a lot of methods to befool you and and steal your money.
Identify a Bitcoin or Ethereum Cloud Mining Scam
there exist many sites that are for comapring mining contracts for Bitcoin, Litecoin and Ethereum. These sites get reward by scam artists or fraudsters for sending potential traffic to their site.
So these comparison site generally run fake adverts or campaigns to send traffic to scam masters because at the end they are gonna get share of whatever amount of money victim loses in scam.
From 2014 and 2015 it has become quite expensive to use mining rigs for individuals and the shift from mining rig to cloud mining has increased tremendously. This shift and growth in cloud mining market has caught attention of scam masters as they have established a lot of fake cloud mining sites offering mining contracts for Bitcoin, Litecoin, Ethereum and other cryptocurrencies.
Scammers always try to stand one step ahead of those policing it and it is quite difficult in Bitcoin to identify such scams but still some useful and catchy tricks used by scammers are:
- They use hidden domain name which is never registered to a real user .
- They run a registered company but the Directors are always residents of other country so that they can use faked documents.
- They avoid showing any proof of their equipment.
- Initially, they use funds collected from clients to give payout just to set their prestige. Also, they use a verified bitcoin address for transactions and then the day comes when the address stops paying.
- They promotes videos of fake persons or representatives and their office is never seen equipped of eqiupments in the video.
- They advertise with comparison sites which are later gonna get their part of money to present that this site is verified by showing payouts by verified bitcoin address.
So, don’t just go for any company without inquiring all details about the company. There are many lists of fake mining companies are available on Internet, consider going through them first.
Hitesh Malviya is the Founder of ItsBlockchain. He is one of the most early adopters of blockchain & cryptocurrency enthusiast in India. After being into space for a few years, he started IBC in 2016 to help other early adopters learn about the technology.
Before IBC, Hitesh has founded 4 companies in the cyber security & IT space.