When you’re told that you can make a lot of money through mining, Chainmine could fit into your ideal because this cloudmining site is just like a dream come true to any investor seeking for an opportunity to make quick gains through cryptocurrency investments.
In this review, we shall go through this cloudmining operation to see if what they’ve promised you is the situation on the ground. Will you make money by investing in this cloudmining service?
What is Chainmine.io?
This is a website that claims that users can mine bitcoins without fees. It claims that signing up gives the user some free hashrates with which they can accumulate some bitcoins.
Considering that the returns promised is up to 12%, this is a site that would attract quite a number of investors since everyone wants to make some gains. The site claims that it already has nearly 300,000 users who are mining BTC without limits or terms which makes it one of the most popular cloud mining operations in the industry.
However, we are curious to know how authentic this cloudmining operation is. Will the investor in this site actually earn bitcoins or is this another scheme that was designed to deceive the user?
What is The Reality of Cloudmining Operation?
What is obvious is that despite what Chainmine claims, that it is impossible for a cloudmining operation to make 12% profit daily, That they’re even promising to pay the investor up to 10% means that they are presumably earning more than that.
So is it possible to earn up to 15%-20% from cloud mining of Bitcoin? The answer is clearly no. Miners are not known to demand that you join them as cloudminers because mining difficulty of Bitcoin has increased so much that only corporate investors have the capacity to fund mining operations.
There is even a slight possibility that a mining operation could benefit from mining of altcoins and not Bitcoin due to the energy demands of BTC.
The first indication that you’re dealing with a dubious proposition with Chainmine is the concept of free mining. This is a strategy used by many fake cloudmining sites to lure the uninformed into thinking that they can earn free money from the site. It should be obvious at this point that it is not possible to mine bitcoin freely, or even at a low budget.
Having said this, it is important to note that what sites like Chainmine actually wish to accomplish with the concept of free mining is to lure the individual, and then ask them to buy higher hashrate so that they can quickly reach the minimum threshold required to make a withdrawal of the proceeds of their mining activities.
In other words, they are more interested in the sale of hashrates than in actually rewarding the investor. If they ever do the latter, the source of the fund is from the sale of hashrates and not from mining.
The pattern of sites like this is not different from traditional ponzi schemes which pay old investors with the funds generated from new signups.
Who is Behind The Site?
Information from the website claims that the CEO of the company is Billy Nelson. Of the 1000 Billy Nelsons in LinkedIn, we couldn’t link any to the identity of the CEO of Chainmine.
What this could mean is that he has no LinkedIn account or that the identity doesn’t exist. What we have observed over time is that most businesses that do not have a defined source of income that is legitimate rarely list the real identity of the people behind them.
The site used some of the common techniques employed by ponzi and fraudulent sites such as certificates of registration and membership of a financial organization to project the impression that your funds are safe with the company.
This is despite the fact that there is actually no evidence to back these up. They only used logos to represent such memberships. In any case, what is obvious is that there are thousands of exit scams that were registered businesses with certificates of registration. So the credibility of a business cannot be determined from if it has a certificate or not.
Even within regulated sectors such as finance, scams still happen, talk less of a business like Chainmine which claims that it is a member of the Blockchain Association. Hopefully, you’re aware that the cryptocurrency industry is largely unregulated.
A search at Whois shows that the domain was registered on October 31, 2021. This is a relatively new site and it is actually not possible that it has thousands of users as claimed by the site. This is despite the fact that there is a referral program that the owners hope would help them to drive more traffic to the site and consequently make gain more sales for their hashrate.
Why Chainmine is A Scam
The site has listed several transactions from blockchain explorers as withdrawals made by their clients. If you’re conversant with genuine blockchain and mining businesses, you would know that they do not use payments and withdrawals made by users as marketing and promotional strategies.
The people behind Chainmine are aware that there is low awareness about cloudmining and how it works, so they’re taking advantage of this fact to defraud people.
You should understand that real mining companies do not demand that you make deposits for them to help you mine bitcoins. They’re too busy to do that and the impact of your few hundred dollars would be minute to their operations. They do not offer affiliate or referral programs as found with Chainmine.
According to the SEC:
One of the most common gimmicks con artists use is to promise investors that they will make a lot of money in a short period of time – that they will “get rich quick.” Con artists may trick investors into believing that they will make tons of money with little or no effort.
If you really want to invest your cryptocurrencies for profit. There are platforms that can help you to accomplish this through staking. Proof of stake coins can be staked to generate profit. You can check our top recommendation at the earning and staking sections to get your digital currencies yield profit for you.