Cloud Mining Trap

The Cloud Mining Fallacy, and why people do it

Cloud mining, cloud storage, cloud banking, cloud this, that and the other. Everywhere you look, you find someone offering something in the cloud. Unless you have your head in the clouds, cloud computing is affecting your everyday life.

What is Cloud Mining? 

Cloud mining is no different from using email. Simply put, you use someone else’s hardware and software to achieve a processing objective. In the case of email, you would use something like Gmail for example. Google provides the software, hardware, and resources to operate the infrastructure, you get to use the service. You can send and receive messages, files, videos, photos and so forth, you get the picture. In return, they get to analyze your behaviour and advertise to you. Ultimately they earn revenue from advertisers in a roundabout, yet clever way.

Cloud mining vendors, basically offer you the ability to print money. They camouflage the ridiculousness of their scheme in tons of multi-level marketing, frustration compounding, headache-inducing gibberish. These “snake oil peddlers” follow this up with even more nonsense about how you can make all your friends truly wealthy. They are so philanthropical, not only do they want to make you rich, the sommer want to make your friends and family rich too, after all, it would not be right for you to drive around in a new Merc all by yourself now, would it?

Marketers make the most money from referral fees. The system relies on a Ponzi mechanism of selling “mining packages” because they need to wrap it up in a mess to confuse prospective investors. Most people are lazy and do not understand or differentiate between the actual mining contract and the “subscription fee”.

Why is cloud mining a clever trap?

Some of the techniques used by these snake oil peddlers are :

  1. Quoting, calculating and converting in mixed currencies, throwing in some percentages here and there. Most people would make a profit by simply buying and holding a cryptocurrency.
  2. Withdrawal terms and conditions that do not allow you to ever withdraw unless you keep investing (or some variation thereof).
  3. Social engineering your attitude towards money, by getting you to bring others that rely on your knowledge into the scheme. To save face, you have to keep it going and stay positive, resulting in most people re-investing, even though they have realized it is a scam. These cloud mining operators play on human emotion.
  4. Some sort of points-based system that needs to be converted to a “matrix” before giving you some sort of indication of the possible BTC to Rand value of your portfolio. This is insane. Be your own bank. Buy bitcoin for Rand on an exchange like iCE3x.com, then withdraw and store your bitcoin yourself. That way you have control of your private keys. You decide when to send your bitcoin to an exchange of your choice, after which you sell your bitcoin in the currency of your choice.
  5. Promises of untold riches, and “getting in at the start”. You have to “act fast, only a few slots left”. This is just an example of how these buzzwords are used. You are so afraid of missing out, all sense of sensibility goes out the window. This has happened to even the most seasoned investors and businessmen for as long as money has been in circulation. Just look at old “Count” Victor” who sold the Eiffel Tower,  not once, but twice …

Who profits from cloud mining and how to they trap you?

Marketers make the most money from referral fees. The system relies on a Ponzi mechanism of selling “mining packages” because they need to wrap it up in a mess to confuse prospective investors. Most people are lazy and do not understand or differentiate between the actual mining contract and the “subscription fee”.

It is usually this subscription fee that fuels users into involving family and friends, and so it just widens the net for funds to stream in. Peter then robs Paul to pay John. It usually ends in a media article about some phantom businessman that lives in a postbox, who defrauded 1000’s of people out of millions. Most of the time the same media outlet that posted the article will within 4 weeks have sponsored content posted by the same people.

It is not illegal, stupidity is not a crime

Is cloud mining legal?

It is not illegal, stupidity is not a crime. Cloud mining companies, especially the dubious ones (even legit cloud mining companies are hardly ever worth it), are very good at treading a fine line when it comes to the law. The entities behind these schemes are usually very well versed in the law and are marketing experts. They, therefore, sell you an apple that tastes like a lemon, looks like a banana and costs twice as much as a Liquifruit, all the while you think you ordered a biltong salad.

Should you get involved in cloud mining?

The simple answer is NO. To further explain this bold indicator (we very rarely take such a stance), we need to consider the average consumer. Most people that come across these cloud mining opportunities are neither astute investors, nor computer experts. It is, therefore, safe to assume that you are at a disadvantage in the knowledge stakes and therefore would be safer investing your funds in something you can control or have a reasonable influence on the outcome. At the very least a clear understanding of what you are investing in, what your risks are, and what your expected returns under normal conditions would be.

Have you tried to get involved in cloud mining? We would love to hear your views, so please leave a comment below.

 

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Disclaimer Notice:

This article is intended to educate and should in no way be seen as investment advice or an enticement to use the ice3x.com platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.

 

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