What Are Crypto Cloud Mining Scams?

As cryptocurrency has flourished, online attackers have been developing more sophisticated ways to trick investors and traders into divulging their personal information. This is certainly the case in the cloud mining market. So, how do crypto cloud mining scams work, and how can you avoid them?

What Is Crypto Cloud Mining?

Some of you may be wondering what cloud mining even is. Is it the same as regular crypto mining? Well, not exactly. A typical cryptocurrency miner needs a specific piece of hardware to mine coins or tokens. This can be something as simple as a CPU, or a specialized unit like an ASIC miner. In any case, hardware is required to solve mathematical equations, mine coins, and verify transaction blocks.

But not everyone can afford to invest in the hardware required to mine. These days, you’ll usually need a single GPU, GPU rig, or ASIC miner to successfully mine, which can cost a lot of money. This is where cloud mining comes into play. For those who don’t want to incur large upfront mining costs or those with limited tech knowledge, cloud mining can be a cheaper and more straightforward alternative. But how does it work?

Crypto mining websites are run by people who have access to mining hardware. These are usually farms that can harbor huge amounts of hashing power to increase the chance of success. A customer will pay these cloud mining websites a fee to mine for them, meaning they can still earn mining rewards without having to run a full node on their own.

But this kind of model can be very easily exploited by scammers looking to trick users into handing over funds without offering any of the benefits of a legitimate cloud mining service. So, how are crypto cloud mining scams carried out?

What Is a Cloud Mining Scam?

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