Safe, Not Sorry: How to Treat Cloud Mining Right
Trust is a major issue in the Bitcoin cloud mining industry. Cointelegraph looks into this issue to find out how to treat cloud mining right.
Cloud mining, according to some, is one of the most profitable ways of investing online. Many users are aware of such opportunity and actively use it. Others think that ‘making money from nothing’ is nothing more than fraud.
As always, the truth lies somewhere in between. Cointelegraph has looked into the issue of trust to find out why is there such a distrust for cloud mining and how should one approach this technology in a safe way.
Like any other investment area, cloud mining presents certain risks. To begin with, there’s no country where cloud mining is regulated by law. Against this background, fraudsters have broad opportunities to deceive cryptocurrency holders and investors.
According to different estimates, the volume of fraud in this market ranges between 50% and 90%.
At the same time, the situation is compounded by users themselves. It frequently so happens, that miners, due to inexperience, get lost in lots of aggressive advertising, forum promotion and fake reviews.
Eventually their money falls into the wrong hands, and as a result, misguided investors fill the Internet with negative opinions.
The already shaky trust for cloud mining companies was undermined even further in the end of June. Back then, the community’s attention was focused on HashOcean, the service that disappeared with the money of 700 000 investors and tried to make it look like a hacker attack.
At the heart of the scandal
The BiteMiner project launched around the same time. The coincidence of these two events naturally led to some suspicions: many topics started appearing on the web, where users did their utmost to link BiteMiner creators to the infamous HashOcean.
“It affected our business in many ways. Many people treated us as a scandal, some of them asked for refunds on our email,” tells a representative of the company.
However, evidence for this theory remains elusive. The only thing known today for a fact, is that BiteMiner is a company that has more than 2 million users and two data centres in San-Francisco and Singapore.
In the two months of its existence, the company has managed to get a reputation good enough to get into the Top 10 list of cloud mining investment services.
Numbers before opinions!
It is not easy to find out whether or not a service is trustworthy. As we have already said, one should not to believe paid online reviews.
Is there any honest source of information at all? We would suggest to pay attention to the numbers - more precisely, to the profitability.
There is a certain category of companies that should be blacklisted by every investor. Their implausibly high ROI makes them stand out among other cloud mining companies. Thus, a user can be promised 1000% annual income or even more.
The truth is, no mining operation (even a very efficient one) can guarantee such levels of profit. Projects with promises like that will most likely turn out to be scams.
BiteMiner’s promised annual return is around 300%. This figure doesn’t take into account the profits from referral program; also, it depends on the amount of power purchased by the user.
In general, 300% yearly (~0,8% daily) is a standard BiteMiner ROI that fits into the average market rate.
What you shouldn’t be scared of
Some cloud mining services have such option as a referral program. Some users tend to consider it as a warning sign, but how fair is such attitude?
If a company functions properly and pays its clients faithfully, there’s no reason to avoid some additional income opportunities. In most cases it works the same way: an investor attracts new clients to the company, subsequently receiving dividends for their purchases.
Every company makes its own adjustments to this scheme: some make the structure more complex by adding several levels of income, some just pay investors with something other than money.
BiteMiner’s Regional Representative program has its own specifics:
“Our referral program is simple to understand. It's one level unique referral system, where user gets 5% power as a bonus in their account, when someone successfully purchase power using his/her referral link. User "A" register a new account and purchase power using referral link provided by "B". After payment confirmation the user "B" will get 5% power.”