VBit Against Scam: Bitcoin Mining is Dynamic, Scammers Often Promise Absolute Returns
October 1, 2020 - Expert Commentary
In this educational piece, VBit is taking the front-seat to educate our readers the importance of doing due diligence and outwit scammers.
For Bitcoin owners, this is the best time to be alive.
At press time, the pioneer crypto had just eased past previous record highs and is rising past the $23,500 mark. This should be a time of excitement and glee for every stakeholder.
That is one side of the story.
Experience also tells us that Bitcoin has a unique propensity for attracting all kinds of scams, frauds, and stories of retail investors who lose their coins to shady ventures usually at a time when prices are ripping through roofs.
The fact that the coin is virtual and decentralized makes it a favorite for scammers who also like to operate outside the mainstream. VBit Technologies is against all kinds of scams and takes the duty to inform our customers of such entities seriously.
As a critical cog in crypto, it is important to be realistic about mining Bitcoin, and what the rewards can be.
Absurd promises are likely to be scams seeking to prey on the naivety of some Bitcoin enthusiasts.
Bitcoin Mining Is Not a Ponzi scheme
Network marketing or affiliate program is a tried and tested marketing strategy. Unfortunately, some entities have used it to nefarious ends and this has given an opening to critics of legitimate affiliate marketing operations to take a collective swipe. An affiliate program involves users earning commissions for promoting a company’s products/services.
To achieve this, there has to be an actual service/product and the commission has to make sense. In the case of VBit, this company is an equipment reseller that offers hosting services. Users can participate in the marketing affiliate program, in addition to mining Bitcoin.
Ponzi schemes simply take the money of new users and use it to pay older users. They mostly don’t have a serious value proposition and their network marketing is based on promises of absurd promises. This is quite distant from the description of an actual affiliate program that VBit offers.
Ponzi schemes prey on the desire for quick money. Take, for instance, a person, for descriptive purposes named Joe, comes across a Ponzi scheme offering progressively larger sums of Bitcoin. Joe gets excited by the offer and the promise of fast returns.
There is a catch.
He has to pay some money to have the “guarantee” of high profits.
Joe gladly pays this amount and tells his friends. For everyone he manages to sign up, he is promised a bonus all the while having the bigger promise of more Bitcoin if he hangs on for a while longer.
The bold promises cloud Joe’s judgment, and he doesn’t even notice that there is little information about the company outside the site. Moreover, he doesn’t bother with the company’s policies, including details in fine print that disclaim them from responsibility.
Then one day, the inevitable happens.
The company suddenly becomes unresponsive, and Joe is left high and dry. Even the little money he earned is still on the website account because he couldn’t possibly see it going under.
Bitcoin mining does not involve absurd promises tied to the recruitment of more people. A mining affiliate program is reasonable, achievable, and verifiable. Scams go for attractive promises that qualify for the description of ‘too good to be true.’ You should be able to access any affiliate bonuses once you meet the threshold, which is the case for VBit affiliate programs.
A legitimate affiliate bonus is tied to performance and is only a secondary component of the enterprise. VBit’s core ambition is to make mining a viable activity for its customers.
It is simply the purchase of mining hardware that does the work for you.
VBit Technologies is against such scams and takes a concerted effort to inform users what mining entails.
Offers of absolute promises are a red flag because so many factors go into Bitcoin mining that you couldn’t possibly predict accurate returns in a fixed schedule.
Be Wary Of “Mining Operators” Offering Absolute Returns
Mining itself is a draw for scammers.
Since Bitcoin is at a new all-time high, it is natural that curiosity will also peak.
Take a new Bitcoin enthusiast, for reference purposes, named Lisa.
She has only recently observed that Bitcoin is past $23k and thinks, hmmm-where does this Bitcoin come from?
A simple Google search leads her to discover mining. It is the only way to acquire Bitcoin without purchasing at an exchange. The next phase can be dicey depending on which mining outfit Lisa decides to subscribe to.
Mining is resource-intensive.
Lisa realizes that she cannot do it profitably at home, and looks for solutions online. There are countless cloud mining adverts on the internet and she decides to explore one that looks promising. The cloud mining company she comes across offers outstanding returns at a fixed rate.
A red flag.
Lisa goes ahead and invests a few thousand dollars to purchase the hash rate from the company. Unfortunately, as soon as they receive the money, the company becomes unresponsive.
After a week of frantic emails and contact attempts, Lisa realizes that she has been scammed.
With prior information, Lisa could have done things differently.
She might not have fallen prey and chosen VBit Technologies instead.
VBit Technologies is not a cloud mining outfit. Additionally, this story is not meant to paint all cloud miners with a broad brush.
It is simply meant to highlight the prevalence of Bitcoin mining scams.
Investment Scams in New Cryptocurrencies
The ICO era may be well past, but it is still important to inform people new to cryptocurrencies why they were so controversial.
New cryptocurrencies usually have an initial coin offering where the development team offers investors a chance to buy tokens based on the value proposition of the coin they offer. Initially, the ICOs were a noble idea that allowed many cryptocurrencies to take off smoothly.
Soon enough, this popular crowdfunding tool became inundated with scams. The fraudulent projects offering absolute returns rode on the popularity of Bitcoin to swindle investors. The result was a catastrophic decline of the ICO era because, at some point, more than half of those ICOs resulted in failed projects either due to fraud or mismanagement.
Even though ICOs are hard to come by nowadays, it is important to be on the lookout for such scams. Anyone who launches a cryptocurrency and invites you to invest with the promise of absolute returns is likely to be taking advantage of you.
There is no way to guarantee that a new cryptocurrency will succeed within a given timeframe. Moreover, Bitcoin is lightning in a bottle, and anyone purporting to create the next Bitcoin is more likely a fraudster.
Any new cryptocurrency must have a unique value proposition to survive the competitive world of cryptocurrency.
The Big Picture: The Offer of Absolute Returns Is a Red Flag
Scams tend to exploit the natural human instinct to jump at sweet offers.
Some mining companies even use the phrase “lifetime contracts” to make the offers sound more enticing. The common thread is that the sweet talk is meant to get your attention while they pick your pocket.
VBit Technologies is against all forms of scams and takes the correct position that mining is a dynamic process.
Variables like mining difficulty and the prevailing block rewards influence the amount of Bitcoin your mining equipment can make. Even with the best mining equipment, mining is still a process that requires patience and the understanding that you will not recoup the cost of purchasing mining equipment overnight.
These are facts.
It may not be nice to hear such when the price of Bitcoin is breaking records. However, any jumpy decisions in pursuit of riches could leave you reeling with shock.
Take time to understand the logistics that go into Bitcoin mining before deciding to get involved. Solutions that sound too simple and too good to be true are just that.
You don’t get rich overnight through some form of trickery. It is a deliberate effort, more than its fair share of logistics. Anyone who promises you a secret way of mining Bitcoin to make thousands or millions miraculously in a particularly short timeframe is likely taking you for a ride.
Legitimately Mine Bitcoin with VBit Technologies; Avoid Falling For Scams
VBit Technologies is an equipment reseller that offers professional hosting services to people looking to mine Bitcoin.
It has a competent team, committed to educating the public about the possibilities in the Bitcoin industry and how to stay safe from scams.
We provide educational content for prospective miners looking to know more about mining. Besides, we are realistic in our promises and present an accurate account of how Bitcoin mining looks.
Start mining with VBit to avoid falling for Bitcoin mining scams!