According to wikipedia ponzi scheme is a form of fraud in which a purported businessman lures investors and pays profits to earlier investors using funds obtained from newer investors. In this case, cryptocurrency obtained from newer investors are used to pay earlier investors. This has been the case of most cryptocurrency mining platforms as they have been robbing peter to Paul scenario keeps growing.
From our research of most cryptocurrency mining platforms, 80% of these platforms have no well known owners. Even the domain names of these platforms are not purchased by a known valid address. We checked at the WHOIS information of some of the well known and paying crypto mining platforms, there were no known emails, address, and owner of these domains. This have raised questions as to if they are truly genuine.
Table of Contents
HOW CRYPTOCURRENCY MINING PLATFORMS ARE PAYING ITS USERS
It follows this pattern. Someone with a very large number of crypto will open a website for cloud mining. Invite early investors and pay them almost instantly when they apply for withdrawals. This early investors will invest more and invite others to join. Now that more crypto is coming into the system, the owner stops using its crypto to pay for withdrawals. The platform starts using the crypto on new members to pay early investors and the circle continues.
To spot these crypto cloud mining website is easy but the truth is one can not avoid them. To grow you crypto you need these platform sadly some loose for others to gain. If you play the game right, you might just make lots of crypto before the platform starts cooking up excuses for payment failures. In most cases, these platforms always advice you to invest some more in other to be able to make previous withdrawals.
KNOWING WHEN TO CASH OUT YOUR MONEY
Know when to stop throwing money into mining platforms like that. Also know when to start withdrawing your gains and keeping them in your personal wallet. At first sight of payment failure or withdrawal hick ups, start arranging your bags as that mining platform is about to go for a summer holiday. And when there is a new introduced strange policy like invest before withdrawal then know that its winter time and cold is coming.
The best time to start withdrawing your gains from these platforms is usually after your second investment. Don’t be too greedy hence you will loose more than you can ever hope to gain from these cryptocurrency mining platforms. Lastly do not fall victim for the higher rewards for newly investors strategy, its a bait to lure you into loosing more.
There are or at least there might be legit cryptocurrency mining platforms out there. But the truth is most of the crypto mining platforms are like ponzi schemes and you have to carefully look before you leap or you might just regret leaping at all. Stay up to date with recent news on crypto, exchange site reviews, investment website analysis by subscribing to our newsletter. Follow us on Facebook, Twitter and Instagram @mntrendsblog. You can also share this article on Facebook, Twitter and WhatsApp to create awareness for crypto investors.