Online scams in all forms are on the rise. The increase in fraud is hitting an alarming rate with reported fraud losses increasing more than 70 percent in 2021, with an estimated value of $5.8 billion compared to 2020.
2022, so far, has seen a further increase, with billions more wiped from people’s bank accounts, investment portfolios, and online crypto wallets.
Even huge cryptocurrency companies, in the past, have fallen victim to scams and hacks, losing billions of their client’s money in the process. MtGox is one such company that experienced catastrophic failure due to scammers.
While online scams, in general, have increased, specific scams targeting cryptocurrency have increased also.
It stands to reason that the more popular something becomes, the more interest there is from fraudsters who want to take investors’ profits.
The Increase In Attention
Bitcoin, ETH, and altcoins are more popular than ever and so, they attract attention from the bad guys on a daily basis.
Nowadays, due to the costs involved in mining cryptocurrencies, cloud mining is one of the most popular and cost-effective ways to do it. This means, however, that illegitimate cloud mining companies are popping up more often.
What Is Cloud Mining?
In simple terms, Cloud mining is the process of cryptocurrency mining utilizing a remote data center with shared processing power. This type of cloud mining enables users to mine bitcoins or alternative cryptocurrencies without managing the hardware.
This means people can now mine cryptocurrency without having to front the huge costs involved for equipment, rigs, and even electricity.
It’s a simple, easy, and safe option for people who don’t have a lot of spare cash to invest in mining or who only want to invest a little in the first place.
Cloud mining is a legitimate way to mine crypto for a fraction of the cost, (although keep in mind your profit will be lower as it is relative to the amount you put in).
You just need to ensure you are doing your due diligence before setting up with a company so you can be certain that you are investing your money in a legitimate business.
They do exist.
*Cough* Mining Syndicate *Cough*
Let’s have a look at the ways you can protect yourself from scam cloud mining companies in order to protect your money and crypto.
- Verify the Public Address of the Company
- Avoid The Companies Promising You Profit
- Double-Check That You Can Withdraw Earnings
- Avoid Lifetime or Unreasonably Long Contracts
- Check the Company’s Social Media Pages
- Avoid Anonymous Operators
- Is the Company a Ghost?
- Check a Company’s Popularity
- Verify the Product
1. Verify the Public Address of the Company
The cloud mining company should have a listed address somewhere on its website. This is the address they declare publicly as being where the business is based and registered.
To verify the address you can ask the company for a signed message/transaction. This is simple for them to do and they should do so willingly since they know people are wanting to invest money in their company and it’s a reasonable request.
If the company refuses, then walk away.
Another way to verify the company for yourself is to visit the premises if this is possible. For example, if you live close by and the business allows visitors.
At Mining Syndicate, we welcome visitors and are happy to give a tour to anyone who makes a request. You can request a site visit here. We are based in Dallas, TX, although for privacy reasons we don’t list the specific street on our site. We will give you this info during the site setup.
2. Avoid The Companies Promising You Profit
Any investor wants to make a profit. The bigger the better, right? But it is never guaranteed. No matter the investment type, no one can ever say for certain that you will make a profit, much less tell you how much profit you’ll make.
If a company is promising profits and using this as a big part of its selling point, then this is not the company for you.
Promising people profit is a marketing strategy used only to entice those looking for a quick payout. But as we all know, these don’t exist. Only get-rich-quick schemes guarantee returns and 100% of get-rich schemes are scams.
At Mining Syndicate, we won’t make empty promises, guarantee your returns, or tell you that you’ll be a millionaire by next Christmas.
However, we can guarantee you that our mining syndicate services are legitimate, and mining with us is the most affordable option for anyone interested in Bitcoin mining.
3. Double-Check That You Can Withdraw Earnings
If you put money into an investment, you should be able to take money out of that investment. After all, it’s your money.
Any company that puts restrictions on your money or takes control of it once you make a deposit is an immediate red flag.
A cloud mining company is there to help people mine crypto at a lower cost. It’s not there to tell you how much you can have or when. You should never have to jump through hoops to get your money back and you should never have to sign any convoluted and complicated contracts that are full of hidden rules.
Take the time to review the company’s policies on deposits and withdrawals and be absolutely clear about the fees they take before you sign up for anything.
Oftentimes, companies take regular fees without telling you. Either with the hopes that you don’t notice or try and pass it off as service and admin fees.
Before investing in any cloud mining company, you should know exactly how much you’re putting in and exactly how much you are expected to pay out; be it a one-off payment or a regular fee that is legitimate.
At Mining Syndicate, aside from a small one-off set-up fee and a monthly electricity fee, we never take anything else. You keep all your mined crypto. You keep 100% of what is mined.
4. Avoid Lifetime or Unreasonably Long Contracts
Is there anything in life that you would be happy to sign a lifetime contract for? Probably not. Being locked into a lifetime contract, especially in an investment, could be a financial disaster.
Having a lifetime contract may seem great when your investment is going well, but when things dip or there are downturns, suddenly, you’d do anything to get out of it.
Signing a lifetime or unreasonably long contract gives you very little control over the future of your investment and could leave you financially vulnerable.
A lifetime contract is troublesome and any clouding mining company offering these is one to avoid.
Lifetime or long contracts are a scam red flag for any investment not just Bitcoin or other cryptocurrencies. Don’t be tempted to sign a long contract while the market or asset is doing well. No one has any idea what the situation could be like in the future.
At Mining Syndicate, we offer three types of contracts. Three months. Six months. And one year. You are free to choose whichever suits you best and you can renew with a different term whenever your contract ends (or not at all, if you wish).
By having short and flexible contracts, our clients can be assured that their investment is safer.
5. Check the Company’s Social Media Pages
While setting up social media pages is easy work - it can be done in just a few clicks - making them look authentic, however, and maintaining them takes a lot of time.
Any cloud mining company that isn’t legitimate is highly unlikely to invest the time and manpower needed to set up and maintain social media pages. Pages that have regular updates, news stories, interactions with clients, photos, etc.
If you can’t find any social media pages for the cloud mining company you’re researching, or their pages are stale then it’s more than likely they are not a real business.
However, it’s important to remember that even in this day and age, not every company will have social media. This doesn't automatically mean they are a fake business.
As we said above, it takes a lot of time and work, and if the company is small to begin with then they may prioritize their time on running the business and providing the best service rather than growing social media pages.
If you can’t find any social media connected to the company, you should still be able to find online reviews, a Google listing, etc. These are other ways to confirm the business is legitimate without the use of socials.
6. Avoid Anonymous Operators
If the company doesn’t list any personal information on its website then this is another red flag.
All legitimate companies are happy to have an About Us page/Meet the Team, or something similar.
This gives the company a chance to introduce itself, and the people who work there, to potential clients and helps build a relationship virtually.
Owners running real websites have absolutely no reason to hide and, therefore, there should be no issues in being able to find out a little more about who is behind the scenes at the company.
At Mining Syndicate, we have a small but hard-working team. You can meet the owner, Chris, and the other brilliant team members here. We want to get to know you and we want you to get to know us, too.
7. Is the Company a Ghost?
All companies, regardless of what they do or sell, have to be registered somewhere. They have to be talked about somewhere. There have to be traces of information about them somewhere. And all of this shouldn’t be hard to find with quick Google searches.
If information about a company is difficult to find or non-existent then it’s time to move on to another company.
A real company shouldn’t be a ghost on the internet.
8. Check a Company’s Popularity
People who have good experiences with a company like to write about it and discuss it with others online.
Likewise, people who have bad experiences with a company like to write about it and talk about it with others online.
Read what other people are saying on forums or on reviews. A popular company will be talked about for all the right reasons. If you read good things and the discussions are legitimate then this is a big green flag.
9. Verify the Product
Have you seen the mining equipment that you are investing in? Is there a way for you to verify that the pictures on the company’s website are real? Is there a distinct lack of photos or information about the product that you are supposed to be investing in?
It’s not easy to verify the product when it comes to cryptocurrency mining. After all, you are investing in a machine that you can’t see or touch.
But the company should still have legitimate photos and videos to show you.
They should be able to offer you some evidence of what you’re investing in and while this isn’t fool-proof, it does go a long way to confirm the legitimacy of a company.
Cloud Mining Is Real
Cloud mining is a real and affordable way to invest in Bitcoin. But, unfortunately, not every company will be legitimate. It’s up to you to do your research to ensure that you’re investing with one of the good guys.
Taking the time to verify the company, the address, the team, the products, etc, will be well worth it when you get set up with a genuine company that delivers you top-quality service.
Join Mining Syndicate from Anywhere in the World!
If you would like any more information about starting or expanding your Bitcoin horizon; reach out to us at Mining Syndicate. Our mission is simple: Strengthen the Bitcoin network by enabling small-scale miners to affordably purchase and reliably host miners.
As a small miner, Chris became frustrated by the lack of hosting options available for miners with under 100 units. As luck would have it, he found a 2.5MW mining facility for sale right down the road, and thus, Mining Syndicate was born. Facilities #4 and #5 are currently launching and #6 and #7 are in the works.
Why is Mining Syndicate so successful? Because we have a team of people who are just like you, eager to be a part of the future of mining. If you would like more information about how you can be a part of Mining Syndicate, how our facility works, or the products we sell, you can reach out to us here.
We are here for you through every step of your Bitcoin journey!