Mining contracts - the new ponzi

[MrPiggles]

I have been looking into mining for a while now.

Seems there are two kinds of mining operations:

Cex.io where the price per GH is never going to make a profit mining bitcoins, but is at least legitimate (not stealing your money)

and all the others, which show an ROI on GH/s in 50-70 days.

Most of the second type seem to have newly registered sites, a slick/simple layout, unrealistic pricing, a strange inability to demonstrate that they are actually generating ANY coins at all.

Mining lease companies are the new ponzi, imo, and from my personal research it looks like 90% of the ones out there are ponzis.

In before all the "no way man, I gave them 1 btc and they gave me back 0.09 this week so therefore no way are they a ponzi"

I can't even convince some people Leancy is a ponzi so this is hopeless.

[1715606644]

1715606644

[1715606644]

1715606644

[1715606644]

1715606644

[MrPiggles]

We need a subforum in the Gambling section for most mining sites

[MrPiggles]

And you ask a question of a "company" like PBMining asking for proof of coins or even just a PIC of their mining farm and they respond

We don't want to show you any information on our set up if we don't have to.  We are getting plenty of business the way we are set up already.  We do not want to violate our sales agreements and there are other issues which may put our entire operation and customers at risk. 

My suggestion to you personally would be not to invest if you are unsure about us.  This goes to any others too. I will repeat this again, our priority is taking care of our customers, not gaining new sign-ups.    Take us to scam accusations if you would like, but we will not provide you with the requested details.  The address which was posted with one of our machines on Eligius has been removed and was not even meant to be seen.  If anything, less business would be okay with us because we don't have enough manpower enough to deal with the customer service demand.

[MrPiggles]

I was looking forward to PBmining adding some hashing power and reopening sales, but when they jumped from 14th to 29th in a matter of days it made me a little skeptical.

I asked for proof of coin generation or even a pic of the mining farm but he said neither can be provided due to sales contracts or it could risk jeopardizing their operation:

https://bitcointalk.org/index.php?topic=418183.640


So, as a newbie to mining, can someone explain what the reasons for this are? why would showing which blocks they mine be a security risk?

[Rannasha]

Not every terrible investment is a Ponzi scheme. Please use the proper meaning of words.

Mining will most likely lose you money. The seller / operator of a mining program will most likely make money. Doesn't make it a Ponzi scheme.

[MrPiggles]

Not every terrible investment is a Ponzi scheme. Please use the proper meaning of words.

Mining will most likely lose you money. The seller / operator of a mining program will most likely make money. Doesn't make it a Ponzi scheme.

I know what a ponzi is, I used it completely accurately.

Many of these so called "mining" sites are simply taking peoples money and returning it to them and claiming it's mining profits.

That is a ponzi.


At no point did I call all mining programs ponzis, I said many are simply ponzis.

[talker22]

Not bad! I used it

[MrPiggles]

Not bad! I used it

Date Registered:    Today at 08:02:51 AM
Posted:    Today at 08:10:37 AM

[iflash]

Hello everybody,

I certainly do not hope that all of them are a fraud. I just bought 1 TH/s at http://pbmining.com?ref=iflash11 and I do hope it was not a foolish investment.

@Piggles: I absolutely hear you (I read your word slinging match with one of their admins). But unless the site suddenly disappears we will only know if they are legit if somebody tries to make some money with them. I try this now. And I will keep people posted here.

Ahhh, btw: Everybody can see my stats here (I am user #2332): http://pbmining.com/?p=stats

So everybody can follow how I am doing. Maybe I just threw a couple of grand out of the window but my gut feeling tells me: I did not. Still, that does not mean that I will generate revenue. It depends also on how difficulty develops among other things.

Let's see …

Best


iFlash

[MrPiggles]

Hello everybody,

I certainly do not hope that all of them are a fraud. I just bought 1 TH/s at http://pbmining.com?ref=iflash11 and I do hope it was not a foolish investment.

@Piggles: I absolutely hear you (I read your word slinging match with one of their admins). But unless the site suddenly disappears we will only know if they are legit if somebody tries to make some money with them. I try this now. And I will keep people posted here.

Ahhh, btw: Everybody can see my stats here (I am user #2332): http://pbmining.com/?p=stats

So everybody can follow how I am doing. Maybe I just threw a couple of grand out of the window but my gut feeling tells me: I did not. Still, that does not mean that I will generate revenue. It depends also on how difficulty develops among other things.

Let's see …

Best


iFlash

Honestly, I just don't understand why he won't prove he generates coins or has a mining farm.

There is no reason not to at least point to some blockchain transactions.

Anyone can view who is mining what blocks.

Why on earth is it a secret for PBmining alone?

It reeks of scam.

But good luck to you

[iflash]

Let's see. I will find out in the next weeks/months to come. And so will everybody that follows my stats and posts ...

See, for me 9 BTC is quite a bunch of cash. It's money I can afford to loose, but still it would hurt, of course. But BTCs in general are a risky thing. So whether I buy BTCs and wait for them to increase or mine them myself - I do not see much of a difference regarding the risk level.

Fingers crossed and happy mining everybody!

[Coins4life]

We need a subforum in the Gambling section for most mining sites

This

[BitOnyx]

Well, when everyone knows that ponzi is ponzi, it is not really a ponzi since no one is lying to any one here.

If there ponzi people doesn't know it is ponzi, yeah we have a problem here. Some evidences would be nice, but we all know it is a problem.

[cloverme]

@Piggles - My guess is that pbmining doesn't actually have an asic farm and they aren't generating any blocks. They're probably renting hashing power from someone else at a lower rate and/or using a mining pool. If they purchased asic hardware, and they're selling 1 gh/s for about $5, so that means they had to have purchased 1 gh/s for less than $5, minus maintenance (power, etc).  You figure they want to make a profit, so add another 20% on top of that, right?  Where is one going to get 29Th/s for about $3-$4 a gh/s?  Right now, antminers are around $4 a gh/s, but they purchased equipment early on, just a few weeks ago antminers were about $15 a gh and that was the lowest. Let's say they purchased a bunch of hardware from KNC in November (650 gh/s @ 6000), that's still over $9 a gh.  So, they either financed a lot of hardware on credit and have a 5 year payback plan to a bank or investor or they are banking on btc/usd(cad) will rise significantly.  If you look at the early ebay sales for them, they were selling USB block erupters, so maybe they financed the farm that way.  Either way, there is no reason why they can't tell you what mining hardware they use.

Here's the other kicker with cloud mining, you have to generate more sales revenue than your mining farm would generate through mining only for the owner, otherwise, what's the point? 

[Noruka]

I have been looking into mining for a while now.

Seems there are two kinds of mining operations:

Cex.io where the price per GH is never going to make a profit mining bitcoins, but is at least legitimate (not stealing your money)

and all the others, which show an ROI on GH/s in 50-70 days.

Most of the second type seem to have newly registered sites, a slick/simple layout, unrealistic pricing, a strange inability to demonstrate that they are actually generating ANY coins at all.

Mining lease companies are the new ponzi, imo, and from my personal research it looks like 90% of the ones out there are ponzis.

In before all the "no way man, I gave them 1 btc and they gave me back 0.09 this week so therefore no way are they a ponzi"

I can't even convince some people Leancy is a ponzi so this is hopeless.

i mine and make a very healthy profit
although i mine scrypt and n-scrypt. i won't touch SHA even with Satoshis stick.

[MrPiggles]

I have been looking into mining for a while now.

Seems there are two kinds of mining operations:

Cex.io where the price per GH is never going to make a profit mining bitcoins, but is at least legitimate (not stealing your money)

and all the others, which show an ROI on GH/s in 50-70 days.

Most of the second type seem to have newly registered sites, a slick/simple layout, unrealistic pricing, a strange inability to demonstrate that they are actually generating ANY coins at all.

Mining lease companies are the new ponzi, imo, and from my personal research it looks like 90% of the ones out there are ponzis.

In before all the "no way man, I gave them 1 btc and they gave me back 0.09 this week so therefore no way are they a ponzi"

I can't even convince some people Leancy is a ponzi so this is hopeless.

i mine and make a very healthy profit
although i mine scrypt and n-scrypt. i won't touch SHA even with Satoshis stick.

Yeah bud i'm only talking about the mining operations selling GH, not people mining for themselves

[MrPiggles]

@Piggles - My guess is that pbmining doesn't actually have an asic farm and they aren't generating any blocks. They're probably renting hashing power from someone else at a lower rate and/or using a mining pool. If they purchased asic hardware, and they're selling 1 gh/s for about $5, so that means they had to have purchased 1 gh/s for less than $5, minus maintenance (power, etc).  You figure they want to make a profit, so add another 20% on top of that, right?  Where is one going to get 29Th/s for about $3-$4 a gh/s?  Right now, antminers are around $4 a gh/s, but they purchased equipment early on, just a few weeks ago antminers were about $15 a gh and that was the lowest. Let's say they purchased a bunch of hardware from KNC in November (650 gh/s @ 6000), that's still over $9 a gh.  So, they either financed a lot of hardware on credit and have a 5 year payback plan to a bank or investor or they are banking on btc/usd(cad) will rise significantly.  If you look at the early ebay sales for them, they were selling USB block erupters, so maybe they financed the farm that way.  Either way, there is no reason why they can't tell you what mining hardware they use.

Here's the other kicker with cloud mining, you have to generate more sales revenue than your mining farm would generate through mining only for the owner, otherwise, what's the point? 

Exactly.

Until proven otherwise, 90% of these sites are scams imo.

They all accept bitcoin only, have forwarding addresses, are shady about proof they even mine etc.

[Operatr]

Please stop using the term "ponzi" if you have no clue what it means...

It's true that most of these mining sites are risky, and even the more legit ones ARE NOT for newbies trying to make a quick buck.

[MrPiggles]

Please stop using the term "ponzi" if you have no clue what it means...

It's true that most of these mining sites are risky, and even the more legit ones ARE NOT for newbies trying to make a quick buck.

Are you retarded?

"A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from existing capital or new capital paid by new investors"

This is what I am saying:

Fake mining operation takes money, pays back investors a small percent of their own money claiming it is "mining profits".

How is that NOT a ponzi?

[smooth]

It's really quite simple. Don't ever send money (for any reason) to anyone you don't have good reason to trust. And with that ends almost all (if not all) of these "mining" operations.