As a coin has two sides so too is every situation with its pros and cons. This also applies to Bitcoin and cryptocurrencies in general. As more and more people are turning to cryptocurrency, the risk factor involved in the industry rises as well.
Be it Bitcoin, Ethereum or any other cryptocurrency, all of it comes with a vast number of fraudulent activities. Staying one step ahead of the common people, scam artists set such ingenious traps and the naïve easily become their victims.
Therefore, it is important to do proper research before stepping into the world of cryptocurrencies. The fraudulent activities commonly experienced by amateurs on cryptocurrency sites are many; some of them involve the use of scam coins, contracts, and mining rigs. It doesn’t end here though; the fraudsters are evolving day by day as technology evolves. Thus you should be very alert while indulging in any crypto trade or business. Moreover, figuring out the authenticity of any Bitcoin cloud mining contract can be a difficult task; many websites can write fake reviews for a particular contract firm in exchange for a certain sum of money.
Thus, it is best not to invest in Bitcoin, Ethereum or even Litecoin on the basis of surface knowledge. Proper research from genuine sites and complete analysis before taking any decision must be key points to stay out of any scam and end up losing hard-earned money.
What Drives the cloud Mining scam?
Statistics suggest that from 2014 to 2015, there has been a gradual shift in the type of people indulging in mining rigs. Earlier, individuals used these rigs without giving any second thought because they were very inexpensive. But lately, the prices have increased to a level where a single individual cannot afford it. Also, 80% of the Bitcoin has been mined till date, suggesting that the cryptocurrency market is in a boom; hence, making it easier for the scam artists to easily dupe people by offering multiple contracts for Ethereum, Bitcoin, and other Altcoins as well.
The main reason behind this is the vast network of the cryptocurrency that spreads across the globe; not falling into a trap can be difficult, however, not completely impossible. Staying alert and following a few guidelines can ensure easy identification and prevention of any scams.
How can you Prevent cloud Mining scam?
Some of the traits which scamsters use nowadays include:
- They never register the domain name in the name of any real user; also, they never reveal the domain name.
- In order to provide an illusion of prestige and authenticity, they register a company whose directors are foreigners instead of local citizens as forging the documents is easy abroad.
- When asked about proof for verification, fraud sites usually provide vague answers.
- To provide an illusion of honesty and confidentiality, the initial funds that the client invests, are used to make payments, keeping aside the funds received.
- The fraudsters show a verifiable Bitcoin address from where they make the payments which eventually will stop paying someday.
- They focus more on promotion instead of quality substance which is usually baseless and vague.
- The websites to whom the verification of the company is not a priority make the advertisement; also those websites write favourable reviews in exchange for a large sum of money.
Keeping the above points in mind and staying alert over the internet investment in Bitcoin, Ethereum or any other cryptocurrency, cloud mining scam can be prevented.