Topic: ▁ ▂ ▄ ▅ ▆ Cloudmining 101 (ponzi risk assessment) ▆ ▅ ▄ ▂ ▁ - page 5. (Read 361434 times)

Thanks

It's pretty easy to check the boxes yourself

1) No public mining address / no user selectable pool.
A cloud mining company that wont let you direct the hashrate to your pool of choosing and cant prove its actually mining bitcoins itself, is very likely a scam. There is no reason to hide mining address or not sign blocks. None.

FAIL

2) No endorsement from any asic vendor
Asic vendors will gladly make a simple post to show the company in question is a significant customer of theirs. Its free advertisement for them and it helps their customer grow their business, so there is absolutely no reason they wouldnt. If a (cloud) mining company cant get any asic vendor to post such endorsement, you should assume they dont have any hardware to mine with.

FAIL

3) No relevant pictures of their hardware and datacenter
There is no reason not to provide such pictures, except of course, if there is nothing to take pictures off. Mind you: pictures can be faked. Picture dont prove current ownership. So like all criteria listed here, by themselves they are by far insufficient proof.

PASS

4) Open ended IPO / fractional reverse mining risk
Unless the cloud mining is operated by the asic vendor himself, you can not sell an unlimited amount of hashrate. Hardware takes (usually a long) time to order, arrive and deploy. Any company that doesnt limit sales or make public how much hashrate they sold vs what they have (provably) deployed should be considered  suspicious.

FAIL

5) Referral programs and social networking
Referral programs, especially ones that pay almost 10%, are a huge red flag. The mining market is cut throat with razor thin margins. No real company can afford to pay 10% referrals on below market cloudmining prices. Referral programs almost always serve only to feed the ponzi and provide financial incentive to posters to lie about the true nature of the company. Never trust anyone with a referral link in their sig.

PASS/FAIL*

6) Anonymous operators
If the operators are hiding behind whoisguard, provide no provable identity and especially when, like in some cloudmining cases, they use demonstrably false ID or company registration information, you have to be nuts to trust them with your money.

PASS

7) No exit strategy
If you cant sell your position, you cant get your money out. Thats the ideal case for a ponzi and allows it to run for a  long time.

PASS¹

8 ) Bonus point for "guaranteed profit"

PASS


On the face of it then, they do pretty well.
*The pass/fail on this is because Dragon seem to have changed their structure since appearing to be a naked MLM product, as described here in June last year.

So that's the trees, what about the wood?
Things have changed a lot in the two years+ since Puppet started this thread. Difficulty and price have sky rocketed and as you full well know from Genesis discussions, the main question about cloud mining is the ratio of gross earnings to maintenance deductions, and whether a contract or agreement has any convertable value.

Dragon don't detail what their maintenance charge is (would probably be a good idea to add this to the list as question 9).
¹They do say that they offer the option to take delivery of your mining equipment. How this works if you buy a small contract is unclear. What would they deliver against a 540 Gh/s redemption?

Also since this thread started the MLM industry has discovered bitcoin mining. It's an ideal product for them in a lot of ways: they can baffle newbies with science, then offer to take care of all the difficult bits for you ("just give us your money"), payment in bitcoin allows them to hide, ROI's can be unofficially promised but never materialise, and they can just cancel contracts or make them unprofitable by adjusting 'costs' or terms without any legal comeback.

Dragon seems to be organized by a large South African based MLM operation with a pretty checkered track record.

Would I invest in a Dragon cloud mining contract?
I wouldn't piss on them if they were on fire.

What is the score of https://www.dragonminingsystems.com/ ?

I wish I meet this forum and read the tread before I meet with the ponzi site which I thought a good investing place before. I sent 1 BTC to Etherminers.net (SCAM!!) and received 0.59 BTC in their website. I emailed them several times but no answer from the support team.

I didnt mind after seeing I started earning coins. After 2.5 weeks I earned 0.205 BTC from 0.59BTC investment. Today I tried to withdraw the earnings to my blockchain. Guess what? Nothing came... and the earning is zero now in their website and the history shows I withdraw this amount..

BEWARE of this website!!

Hashpoke : refuse to pay his customer : Ponzi

Thanks for you're job  

Yep, Madoff was running his Ponzi 48 yeras (?) .. Even the special commissions that have investigated eight times and found no signs of a scam.
So I can not say that it is easy to recognize a scam. However, we should think a bit before we give someone our money. If something looks too good, it probably is a scam - espeially in cryptocurrency world.

Bernard Madoff's ponzi lasted half a century - if there is something ponzis are kown for that its longitude. Most ppl see someone as familiar the third time they met and talked. This may be an inherent weakness in human nature.

Right now only few firms are paying on time but only paying very less amount of coins to their customers, Cloud mining is always risky because even the company owners says that we are setting new farms with your investment but even though they set up a farm but the cost futures are more because electric charges will be very high, and they will deduct transaction fees very highly, any how it will take ages to get your returns. Better stay away from cloud mining.

A very informative post. Especially for newbies because they try all webs claiming to double or 100% in next hour.. so atleast it helps to atleast stop being scamed.

HashOcean was paying almost two years, and it was Ponzi scheme. Time of paying doesn't mean that service is legit. You have to investigate who is staying behind, where is farm - and of course if this farm is real. Usually farm is just virtual.. That's are classic scam services.

Hashflare is paid me 1,5 years so far so I'm good with them.

Well, I didn't mean to use the word to connote anything negative. There are professional gamblers who think they have a better chance than others - visionary, great politicians all see things others don't and there are people for whom the vicissitude of life is a reward in itself. Who are us to tell them that they are wrong!

And mining has its utility and everyone has the miners to thank for having the stable and growing prices - miners are real stakeholders and provide significant resistance that prob have prevented prices from collapsing many times.

For me, a big part of my motivation is to preserve people from those securitized cloudmining ponzis and give them greater control over their assets - not the kind of control that you would get mining in your own basement, but greater than buying those worthless contracts.

And speaking from experience, I can attest that I have met more large miners who have made money than those have lost - so statistically, it is more likely a money-making gamble than a losing one.

Actually I should correct myself - I do run 25 S9s so I am sort of gambler myself, one that admires and thinks that he excises self-control but a gambler nevertheless.

Comparison to the casino is very interesting.. To be honest with you, investing in your project is a bit like gambling. It can be true and succeed, but also it can end up with big crash. 

In my case, I am more interested in investing in facilities - the difference is between running a casino and gambling yourself, but I want to run a fair and clean one.

From my experience, cloud mining sites are worst than hyips, because you never got to recoup your money as in almost all the cases, they don.t even own a mine. Mining no doubt is profitable, but anyone interested in mining is better off procuring  his/her own equipment and managing their mines themselves, once bitten, twice shy!

100% scam, avoid this or learn a hard lesson.

From there it's been clearly seen if scam, don't ever pay as your money will disappear, better way is forget that cloud mining like it. Real mining is the best solution to get bitcoin.

PLEASE I NEED YOUR HELP................ IS HASHEER CLOUD MINING A SCAM, BECOS THEY ASKED ME TO PAY BEFORE WITHDRAWING...... ANY ADVICE FOR ME.........

of course it's a scam. 99% of all cloudminers are nothing but hot air