5 Ways to Detect a Cloud Mining Scam

The recent increase in value and volatility of bitcoin is quickly driving business towards cloud mining companies throughout the world. Investments are growing, and for many, the concept of cloud mining is becoming considerably more viable.

Increased interest in these services is completely understandable, given the fact that smart cloud mining can actually yield a profit as long as there is enough capital involved. However, finding the right cloud mining business can be quite difficult, especially since we are on a market where numerous scams are thriving. In this guide, we will talk about some of the main tips that you’ll want to follow when selecting a cloud mining company to invest with to avoid being scammed.

#1 Stay away from companies that ‘guarantee’ profit

While guaranteeing profit is a smart marketing move to lure users in, legit bitcoin mining pools are well-aware of the fact that they can’t make such promises. Profit is not up to them, but is rather based on the amount invested and evolution of the digital currency. Therefore, most legit bitcoin mining pools don’t choose to build their image on fake advertising.

#2 Check whether the pool has a public mining address

Public bitcoin mining addresses represent one of the biggest forms of proof that the company is indeed mining their coins on the network. Do keep in mind that some scammers showcase fake addresses, which is why you may want to look for signed blocks, or even ask the pool to specifically sign a block for you (especially if you’re looking for a bigger investment).

#3 Check their popularity

If you’re not new on the digital currency market, then chances are that you won’t find it difficult to check whether a certain company is popular, and serves a good number of customers. To do so, you can look for online reviews, guides, and articles about the mining pool in question.

#4 Social Media

Most illegal bitcoin mining pools won’t emphasize on social media, and if they do, then chances are that their social media pages consist of prefabricated, standardized and inorganically-grown content. Quality-check their number of likes, social media reviews, posts, videos, and photos.

#5 See how transparent the company is

If the bitcoin mining pool in question posts details about their data center and servers yet refuses to provide further proof such as photos, contracts, or electricity bills, things may be fishy. However, don’t use this tip as the absolute guideline, as some companies prefer to stay anonymous and not share too much information. Regardless, upon request the service should be able to provide some kind of proof that they are actually mining cryptocurrency.

By following the tips that have been mentioned so far, you likely won’t have to risk your funds and deal with an illegal bitcoin cloud mining company. If you liked this article, follow us on Twitter @themerklenews and make sure to subscribe to our newsletter to receive the latest bitcoin, cryptocurrency, and technology news.