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We have already done articles on bitcoin cloud mining and also bitcoin mining in South Africa,  and other bitcoin schemes in South Africa, and how it is NOT something people should rush into.

Please beware of any scheme in the name of bitcoin, mining or cryptocurrencies which assure any form of fixed return. No fixed returns are possible. If any company is assuring fixed returns, we believe its a Ponzi / Multi Level Marketing / Network Marketings scheme, or a scam.

Bitcoin mining schemes in South Africa

bitcoin mining scam south africaThere is a bad trend growing in South Africa, and that is of the Network marketing / Multi Level Marketing / Pyramid scheme / Ponzi (call them what you will) quacks, who are using bitcoin hype to make money off unsuspecting and ignorant people.

Many South Africans are looking for a way to make more money, a passive income, or to make their retirement dream come true. Now that bitcoin is in the media a lot more, and the price has been going up a lot, people are eager to learn and find out how they can also benefit.

We have a growing problem where more and more of these guys who brand themselves as Entrepreneurs, Network Marketing Professionals, Investment advisors, and “wealth gurus” are pushing their ‘bitcoin mining’ plan onto their easily influenced followers. These are mostly ponzi schemes disguised as bitcoin mining schemes. Members watch videos and presentations on bitcoin, and how great it is, then are sold the ponzi disguised as bitcoin mining.

Please don’t fall prey to these bitcoin mining schemes!

These quacks claim that they are not ‘cloud mining’….so they are legitimate as they ‘own a real bitcoin mine’. Well if they do own a bitcoin mine (They cant prove this), then I beg to differ, as what they and their followers are doing is the very definition of cloud mining!

Cloud Mining is the process of bitcoin mining utilizing a remote datacenter with shared processing power. This type of mining allows users to mine bitcoins or alternative cryptocurrencies without having to manage their own hardware.

The hunter and the prey

Bitcoin mining south africaThese guys have very little real understanding of how bitcoin and bitcoin mining works, but they know enough to boggle the brains of desperate people who are eager to make money and ‘get in’ on bitcoin.

Watching the Youtube videos these guys send out to their followers about bitcoin and mining bitcoin is crynge-worthy and laughable at the same time, but also very scary when you consider real people are listening to these quacks.

The main thing to understand, is these guys all make money from recruiting more suckers to do ‘bitcoin mining’ with them, and having a large following of eager members is a great way for them to make some serious cash.

These parasitic schemes need people to invest AND continue to re-invest their money, as well as recruit others to the so called ‘Team’ in order for them to continue making their money. Once they have your money, they don’t want you to ever take it out….if everyone did that, the system would collapse really fast. So you are encouraged to automatically re-invest anything from 35% up to 100% of your mining ‘earnings’ back into the system. This is a TERRIBLE idea!

Bad bitcoin advice

These “Team leaders” as they call themselves, travel around South Africa and the rest of the world, holding meetings where they spend time telling people what bitcoin is, and then convincing people that mining bitcoin with them is the BEST way to get involved with bitcoin, and make money. This is NOT TRUE!

It is a great way however for these “Leaders” to make money from recruiting members into the mining scheme. It is in their financial interest to promote the scheme, and to not listen to people who point out that it is a bad idea.

Bitcoin is incredibly volatile, is a risky investment, and you should take extreme caution. Know the facts….it is a bad idea and reckless to take an already risky investment such as bitcoin, and introduce even more risk, by investing it into bitcoin mining schemes. This is especially true when you have little knowledge of the industry and the technology and rely on the word of a “Team Leader” for direction, who’s paycheck depends on you investing.

These guys do cover themselves all the way by insisting that people should never invest more than they can afford to lose, and that figures shown don’t guarantee profits etc., but then they hard sell the mining in the next breath.

Bitcoin mining investment truths

  • With cloud mining, you are at a 100% loss from the moment you deposit your bitcoin…its gone.
  • Not until such time as you have earned and MOST IMPORTANTLY, withdrawn out of the system 100% or more of the bitcoin you deposited, are you in profit.
  • If you are really mining bitcoin with your own equipment on your own premises, even with the best hardware, it will take you many months to break even if you are lucky to do so, and even longer if you are cloud mining. Fast returns are a red flag for a scam.
  • If you do manage to break even and turn a profit, even with the latest greatest equipment, profit dwindles to zero pretty fast due to the ever increasing bitcoin difficulty.
  • By constantly re-investing your mining earnings, you are constantly staying at a loss as you move the bar to break even and turn a profit further down the road.
  • Scam websites are designed to keep you re-investing, because that is how the matrix / pyramid / multi level marketing / ponzi system can run for longer. Your balance on the mining website is numbers on a screen….
  • If there is a multi-level / matrix / binary tree / pyramid shaped, structure for incentives or earnings, it is more than likely a scam where late joiners will lose their money once the system crashes.
  • Members sometimes need to buy a ‘licence’ to use the bitcoin mining pool, this is instant profits lost and moves the date that you finally turn a profit far down the road before even starting mining.

So called proof and credibility of cloud mining

Bitcoin cloud mining South AfricaMost of these groups are quick to shout and scream that they are NOT cloud mining, even though if they did have a mine that is exactly what they are doing by definition?!

For arguments sake, assuming they really do have a huge bitcoin mine, why is there no real 100% proof of this? These guys are eager to show photos or videos of a small scale bitcoin mine with them on the scene, but this in itself is not real proof, as many scams do a small amount of token mining, if only to be able to claim legitimacy.

In any case, anyone can visit a bitcoin mine, and they do! The web is filled with videos of people ‘visiting their bitcoin mine’ on Youtube. This is because it is in the interest of ponzi scheme mine operators to get as many customers as possible. They will gladly let almost anyone make a video so that they can get a ton of new sign ups. This just does not cut it especially when millions of Rands worth of bitcoin is involved.

Proof of bitcoin mine ownership would be crypto and real world things like:

  • Audit of the mining equipment at the mine. How many miners, types and models and total PH / TH / GH that is mining by independent 3rd party.
  • Mining pool and username on pool so that the amount of bitcoin claimed being mined daily can be verified
  • A Securities Exchange License
  • Audit of number of members and corresponding hashing power to correspond with bitcoin being mined and equipment on farm and electricity usage. (Electricity bill with the names of the business or members that reflects the amount of power consumption required to power the equipment in the audit)
  • A bitcoin transaction to be done from recently mined block to verify it is new bitcoin, and was mined by specific user at specific pool
  • Signed bitcoin transaction from the address used in the payouts at the mining pool in the audit
  • Legal company registration documents in the country showing the names of the members, including tax filings bearing their names
  • Land ownership documents / lease agreement showing the name of the company or members names
  • Bank account in the country showing the names of the company and members

A website is not proof, anyone can make a website. A video is better, but still not 100% proof as it does not tell the whole story. Often scripted, they only tell the potential investor what they need to hear to willingly invest.

During the American gold rush, most of the money was not made by the miners, but by the guys selling the picks and shovels….

Bitcoin mining gone bad

So since bitcoin cloud mining is essentially not profitable….how do these guys claim to make so much money….the answer to that, is the ponzi scheme side of the operation.

Suckers are duped into investing money, and the scheme uses newly invested funds to slowly pay you out over time.  Recruiting needs to continue for new members to ‘invest’ so that older members can continue be paid.

Members recruit others using their unique link to ensure they profit from each new person they recruit. The main “Leaders” hold conferences around the country to constantly recruit new users below them, and continuously encourage members to do the same, and praising them publicly about it when they do.

The hashing power of the mine is not proven to cover the hashing power all the members have paid for, so often members are paid bitcoin as mining profits, which is from new member investments.

Members are encouraged to re-invest mining ‘profits’ up to 100%….as long as you keep re-investing, the mine continues to recycle so called profits among members.

The mine wins ultimately as often these companies sell fake hashing power over and over to groups of people who all think that they are the primary customer of the bitcoin mine. Since it is often a ponzi, the mine recycles the bitcoin round and round between the customers who all think they own the mine.

 

Bitcoin South Africa

The best bitcoin investment secret

So if mining bitcoin is risky and not a great investment into bitcoin, what is better….simple JUST BUY BITCOIN, then, DO NOTHING!

Over and over again, since bitcoin began, the absolute BEST investment has been to buy bitcoin, secure it safely, and do absolutely nothing. By doing nothing with your bitcoin, you don’t have your funds tied up for months or years while you try to break even or make a profit.

You are able to take advantage of price fluctuations if you wish, selling bitcoin to cut losses if the price is tanking, then buying back at a lower price to increase your bitcoin holdings!

By doing nothing with your bitcoin you are not at risk of any mining company disappearing with your bitcoin, or run the risk of not breaking even in some cloud mining scheme.

Hold bitcoin

Network marketing leaders want you to rather invest your bitcoin in their mining farm because it benefits them financially if you do. There is zero money it it for them if they suggest that their followers go the less risky route, and just securely hold their bitcoin.

Why invest your bitcoin in cloud mining, put it at high risk, lock it up so that you cant do anything except wait months to possibly break even, and then, be in the same position as you are now, except the price of bitcoin would have probably gone up significantly?

It is a far wiser investment to rather buy bitcoin NOW, hold onto it. Less risk, less fuss, less worry, more options for trading and profit.

Please note that we are NOT associated in any way with the following bitcoin cloud mining services included below:

Skill dragon / Dragon mining / Galaxy Lifestyle mine, Bitknock, BitClub Network, Hashflare, ASSOMiner, Bitcoin Max Profit, Chabat Mining, Coince, Gainbitcoin, GAW Miners, Gemcoin, Group Bitcoin, HashOcean, MMM, PB Mining, UFOMiners, ZenMiner

Why Bitcoin is better than Bank transfers, Paypal and credit card transactions

  • Bitcoin transactions between wallets are not linked to your bank account

  • Anyone can use bitcoin, there is no need for account verification, identity checks or proof of residence

  • No central authority telling you what you can and cannot do with your money

  • Your account can never be seized or closed, you are the only one with control

  • Privacy is enhanced with Bitcoin and it reduces identity theft.

  • Bitcoin transfers are available within minutes, not like typical banking where it can take days

  • Available in any country, there are no international boundaries: send and receive anywhere in the world for no additional fees

  • Unlimited Access: have full control of your money, 24 hours/day, 7 days/week, from anywhere in the world

  • No high banking and transaction fees, monthly and annual fees, overdraft or over limit fees

  • No minimum or maximum amount for transactions

  • Purchases can be virtually anonymous, your name is not tied to your transaction

  • Transactions cannot be reversed, so retailers no longer need to worry about credit card chargebacks

bitcoin-cloud-mining-schemes

We have already done articles on bitcoin cloud mining and also bitcoin mining in South Africa,  and other bitcoin schemes in South Africa, and how it is NOT something people should rush into. Please beware of any scheme in the name of bitcoin, mining or cryptocurrencies which assure any form of fixed return. No fixed […]

bitcoin affiliate program

In a follow up to our post with step-by-step instructions on how to buy bitcoin with a credit card using the bitcoin exchange CEX.IO, this post is to show you how you can earn a little extra cash from them using their bitcoin affiliate program. The exchange has recently launched an affiliate program, allowing their […]

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