There are many sites that claim they could help you mine bitcoins, but the reality is that earning money online whether through cryptocurrencies or fiat doesn’t come easy.
In this post, we shall examine the claims made by Novahash to see its authenticity so that you are better informed before parting with your funds.
Before we delve into this, it is important to know that mining of bitcoins could be profitable, but it requires hardware infrastructure, planning and cheap electricity to break even quickly.
In any case, it is mathematically provable what a certain mining hardware could produce in terms of volume of bitcoin given the mining capacity of such miner. So it is preposterous to lay claims that are not realistic.
What is Novahash?
This is a cloudmining company that offers what it terms an efficient Bitcoin cloud mining. This makes it possible for investors to purchase mining plans for as low as $5 and hope to make some profit.
It is interesting that the operation claims that plans entitle the investor to earn indefinitely on their investments.
The company also has an affiliate program with which participants could lay claim to more income when they refer others. They could earn 10 percent of the investment purchased by their referrals.
The service claims that it has been in operation for 36 days as at the time of this report, but it already has 75,763 members and has paid out 21.5 BTC. These are claims that we would look at to determine the possibility if this is a genuine company to invest with.
Who is Behind This Site?
There are many ways to ascertain the reliability of an investment site. We put Novahash through some of those tests. Since it is a company that expects people to send investment funds to them, the minimum expectation is that the owners of the site should be known. However, a search for the identity of the owners yielded nothing.
This means that the owner intentionally concealed their identity. This is a suspicious activity since it makes no sense to expect people to send their funds to strangers that they have no way of identifying how reliable they are.
Unidentified Support Team Leader
The closest the site came to listing a team member is its support section where Ronald H. Jones was mentioned as the support manager. However, a search of the ID shows that it may not be a real identity. No social profile has been listed anywhere of this individual.
This points to the suspicion that you’re dealing with a fake identity just to give users of the site the impression that it is a business with a human identity. I’d advise that you do not get carried away by this.
Unlikely Location for Mining
According to the site, the company runs its operations at 17a Greycoat Street, SW1P 2QA. But Google images shows that this is an unlikely location for a mining farm which needs constant cooling of hardware. This makes it very likely that there is no mining operation going on in this location.
Assuming this is an administrative office, it still leaves a lot to be desired since there is no proof that Novahash has a mining farm anywhere.
Suspicious Mining Plans
According to the Novahash site,
“We at NovaHash offer you the complete freedom to set your own prices so you only have to buy as much Mining Power as you need. Purchasing Mining Power is a one-time purchase with no hidden fees or monthly charges. Buy Mining Power once and mine Bitcoins for life.”
This is a spurious claim since there is no way a genuine mining company would offer such conditions implying that a one-time purchase entitles the buyer to earn for life.
All known mining companies are known to have plans that have specific tenures. What Novahash has offered is not in tune with reality and so makes it a suspicious company to deal with.
It is remarkable that the company calculates its plans and investments in BTC instead of hashes. It even claims that the investor would recoup their investment in 14 days.
This is most unlikely since the mining difficulty of Bitcoin has appreciated to the point that it would take many months to recover investments instead of days.
Our conclusion is that this is a site that is eager to convince you to make deposits knowing that the possibility of recouping your investment is non existent. No one is even saying that you would make any profit if you send your funds to this site.
A Common Scam
There are many sites like this one that claims that they would mine cryptocurrency for the users, but very few of them are reliable. With Bitcoin value soaring, it is becoming common to see this type of scam.
The Securities and Exchange Commission in their site warned investors about the risk inherent in believing this type of claims:
“SEC and CFTC staff have recently observed investment scams where fraudsters tout digital asset or “cryptocurrency” advisory and trading businesses. In some cases, the fraudsters claim to invest customers’ funds in proprietary crypto trading systems or in “mining” farms. The fraudsters promise high guaranteed returns (for example, 20-50%) with little or no risk.
After the investors make an investment, typically using a digital asset such as Bitcoin, the fraudsters in some cases stop communicating with the investors altogether. These fraudsters can quickly send your money overseas, with little chance of you being able to get it back.”
Fraudsters use any means to convince people to send them funds such as posting fake transactions as seen below. There is no evidence that these are genuine since anyone can pull transaction IDs from the blockchain and post on their sites.
Sites that claim that they would double or triple your investment in a short time are mostly scams. Fraudsters are getting more daring because they’re aware that many investors do not crosscheck the information provided on fraud sites.
No genuine investment would promise your yields that are so rapid that you could become rich in a short time. For a genuine investment where you could be guided through a social trading platform, you may check our top recommendation.
If you have views about Novahash, please send in your comments using the comment box below. You can share our post to help other avoid this scam.