Cloud Mining has been one of the popular cryptocurrency investments for years. Some of the alive cloud mining providers promise high returns on top of a cloud mining investment for a short duration or even a lifetime. But is it still worth investing in cloud mining in 2019?
Cloud Mining isn’t in fact really profitable than it seems like
First of all, cloud mining is not considered a stable investment because the returns are varying heavily due to its dependence on the mined cryptocurrency.
Let’s do the math, you bought 2.5 THs SHA-256 hash power for $150 and the monthly payment speculated to be $20, then it seems like, the ROI would be reached in seven months. However, this is not the right way to calculate because, with increasing difficulty from time to time, your share on the payout shrinks greatly. That means, in the next month, your payout might be set unexpectedly at $16 a month or even lesser.
To counteract it, it is worth noting that the use of a calculator, which is specifically designed for cloud mining, may encompass some other factors, e.g. increasing difficulty or price, which deliver accordingly better estimations.
A vast majority of the cloud mining sites are obviously scams
Throughout the years, about 80% of the cloud mining websites were shut down due to scams. These sites offered unsustainable interest although they seem to be reputable at first glance. It is hard to distinguish a “serious” reputable cloud mining provider from a “fishy” reputable one because it is easy for them to establish a company in a country with lax regulation. Besides that, they also rent business offices or hire actors for an introductory video, to increase their reputation.
How can I verify if a site is trustworthy?
A Bitcointalk.org user named Puppet created a thread where he clarifies the points to watch out for when it comes to choosing a trusted cloud mining provider. The points are as follows:
- No public mining address / no user selectable pool
- No endorsement from any ASIC vendor
- No relevant pictures of their hardware and datacenter
- Open-ended IPO / fractional reverse mining risk
- Referral programs and social networking
- Anonymous operators
- No exit strategy
- Bonus point for “guaranteed profit”
The more of the above points are applied to a cloud mining website, then the likelihood is very high that it is just a scam.
In fact, most cloud mining websites were found out to be a scam with the help of these above principles as this thread exemplifies the outcomes of shutdown cloud mining websites.
There are already better alternatives to cloud mining
The recent developments, such as P2P Lending or the hype of ICO tokens, make look like cloud mining a trivial investment, especially when the alternatives are much safer.
As I already mentioned above, cloud mining shouldn’t be considered a safe and stable investment. The payouts are fluctuating and the likelihood to reach the ROI is nearly impossible. A better alternative, lending crypto or investing in dividend-paying tokens may be a better choice.
To sum up, cloud mining isn’t really worth it nowadays. Not only because of the regressing revenue but also the probability of losing the savings due to an exit scam. The days of the gold rush using Cloud Mining where people made a decent profit on various cloud mining sites have been long gone. Today, you might be already better with donating your crypto to a charity instead of putting them all into clod mining.