Basically cloud mining is you use another person or persons database remotely, the concept is beautiful itself,
That is when you rent hashrate from other users. Buyers are not given direct access, the hashrates are directed to the user's specified pool and account.
Most commonly, cloudmining involves a user buying mining hashrates from a website and earns a portion from it. The company runs a huge array of ASICs in a datacentre and generate profit. A user is given the payout after deducting the costs.
but it has given power to many ponzi scammers that just open a website without any real data that they are mining and are taking money from people without actually mining any coin. Cloud mining right now is not profitable at all so better stay away, better safe than sorry.
That's true. However, companies such as Cex.io proves their legitmacy by allowing the users to exchange their shares for actual ASICs and the users can see their blocks mined by the coinbase of the blocks. This is definitely not foolproof however, there is always a chance for them to run away. ASICMiner is one example.
