Any new industry is full of scams and the Bitcoin and Crypto industry is no exception. From scam coins to mining rigs and contracts there are a multitude of methods to steal your hard earned cash and pull the wool over your eyes.
So how do you identify a Bitcoin scam. Well it's really difficult for anyone to know and the scam artists are becoming more clever.
Here at CryptoCompare we do all the hard work so you don't have to. We trawl the web and if we have any doubts about the Company offering the Bitcoin cloud mining contract it does not appear on our list. The same goes for mining equipment - if we haven't got one and tested it - or seen sufficient evidence of its existence or a decent track record for the Company - only then will we list it. We also list all the Companies that have had dubious reports on forums from the community.
For example there are a lot of sites that compare mining contracts for Bitcoin, Litecoin and Ethereum - but they are rewarded by the scam artists for sending potential users to their sites.
So these comparison sites don't really mind running a fake advert for some scam artists as they get a share of whatever the victim hands over! They just quietly take the money and allow themselves to be led by the hand and not looking after their users.
In 2014 and 2015 there has been a shift from mining rigs being used by individuals to it being too expensive for individuals alone to carry out - so the market for cloud mining has grown and grown. This has caught the eye of the scam artists who have set up a number of cloud mining sites offering mining contracts for Bitcoin, Ethereum and other alt coins.
With any industry the scammers have to stay one step ahead of those policing it. With Bitcoin it is incredibly difficult to get any distinct proof as the industry is geographically spread - but there are red flags we look for that usually mean somethings up.