Perhaps cryptocurrency mining is one of the most popular ways to earn cryptocurrency. Yet, the costs and difficulties surrounding proof-of-work mining keep many enthusiasts away. But some have thought of renting out hash power to individuals giving birth to the so-called cloud mining. But can we trust cloud mining?
What is cloud mining?
The concept behind cloud mining is fairly simple. A company builds a huge cryptocurrency mining farm and starts mining one or more coins and tokens. However, to stimulate the cash inflow, it starts selling hash power or all sorts of mining packages to various users that want to mine cryptocurrency but don’t have the time, money, knowledge, or disposition to build a mining rig.
So, in theory, the cloud mining company would pay the user back his investment plus a proffit.
Again, in theory, the system could work. Crypto farms would get cash flow that could help them pay various business expenses and develop, while the users would get a profit. Everybody wins.
Yet, cloud mining is perhaps the least safe method of earning crypto. Why is that?
Why we can’t trust cloud mining (at least yet)
We under no circumstance accuse every cloud mining company is a scam. However, we’re here to underline that many such projects scammed their users; that’s why you need to be supper dupper cautious if you choose to test one out.
There are also some cloud mining users that complain that the cloud mining platforms that used pay in peanuts or run on negative.
But the reason why it’s so hard to trust cloud mining cryptocurrency is mainly because the crypto space is still rather unsafe, and many bad actors try to scam anyone they catch on the wrong foot.
Cloud mining is no exception. Hashflare and Shamining are just 2 of the cloud mining websites that were closed and recognized as a scam. But many others still work to this day, with people accusing them of being ripped off by them.
And even if there were a few that legitly tried to start a cloud mining platform, they closed down as they couldn’t afford to give out attractive payouts.
The difficulties of a legit cloud mining platform
Cryptocurrency is very volatile and not just when it comes to prices but also when it comes to mining.
The ever-increasing difficulty, the costs of electricity, the costs of buying new hardware, and the maintenance make it a very risky business to start on your own. Unfortunately, there is no way for a cryptocurrency farm owner to promise an exact profit to any investor.
So, if one wants to operate and give out decent winnings, they, unfortunately, have to make use of some shady practices like taking in money from users to pay out other users that have invested before.
It may work as long as the platform grows and receives new users. But at some point, it will still crumble.
This is just one of the possibilities.
Alternatively, a legit cloud crypto mining operation will have to keep a close eye on payouts and potentially let loose only when the market is in a bull run.
Can we trust cloud mining? Let’s have an experiment!
Now that we’ve gone through cloud mining and its difficulties let’s find out if there is any hope to trust cloud mining with one funny experiment.
We’ve found a cloud mining platform that says it has been operating in the US since 2016 and offers you $15 right from the start. It’s called Gbitcoins.
Also, apparently, you can use that $15 bonus to get into a cloud mining package once a day that gives back around $0.9.
Our first impression is that it sounds too good to be true. So, let’s make an experiment.
We’ll use this apparent infinite money loophole to try to reach $1000 without depositing anything, then withdraw and deposit back. Next, we’ll try to get to $6000 and withdraw.
Realistically speaking, we think that’s not gonna happen. But let’s have some fun.
Follow us if you’re curious to see how the experiment is going to end.
Later edit: Our game ended quicker than we would have thought. Gbitcoins.net is down. So this answers our question in a way. Also, you may check Brave New Coin’s article on cloud mining scams.
P.s.: This is not financial advice; we’re just having fun here. Also, be very, very careful what you put your money into, and never invest more than you afford to lose. Stay safe!
