Lessons Learned From The Genesis Mining Debacle
Oh Genesis...
It's been pretty painful watching this mining service operate in the past few weeks.
Out of all of the cloud miner services, it seems like they have done the worst job before and since the hard fork of bitcoin.
What a shame!
I am not certain our money is gone...but...
If we never see it again, I would not be surprised.
With that said, there are some lessons to be learned from the whole concept of cloud mining.
1. Never invest more than you are willing to lose.
Seems obvious enough, but from the various angry posts on Steemit about Genesis users, it's clear that some of you guys put way more money than you should have in the company.
2. Never place too much trust in the company.
This goes hand in hand with the first lesson...if you placed too much money in the company, you've probably also placed too much trust in the company.
Yes, we did see picture and video proof of them really existing, but this lesson is more or less about how the company is being operated as well as it existing. A company you can prove exists, does not mean it's operated well.
- Photo proof is not enough
- Video proof is not enough
- A decent looking website is not enough
- WORD OF MOUTH not enough! (aka. Referrals from popular personalities!)
3. Using a middleman never beats doing the work yourself.
The main issue with using a #cloudmining service, is the fact that we are basically asking a middleman to do the work for us. That's perfectly fine...and normal...but not when the middleman has more power than you.
If you are not computer savvy to build a rig, outsource the construction and maintenance.
There are a lot of people who poured money into this service, who could have honestly opted to have their own rig setup at their location so you would be in control. I know a lot of factors go into creating a mining rig at your place (such as electricity cost, maintenance, etc.), but it would give you power over your money...and a potential asset (graphics cards, asics and other hardware) to sell back to the market (via eBay or Amazon) whenever you decided you didn't want to mine anymore.
The point being, by investing in a cloud miner, you have opted to take the lazy route along with the added risk...and there's nothing wrong with that, but really understand the risk.
4. Invest only when you know how the product ACTUALLY works.
Another complaint I've seen on Steemit is not understanding how mining actually works. If you look at some of these posts, there are people that wonder why their payments continue to drop every week or so not fully understanding how mining really works.
All this tells me is that you've blindly invested in something you know nothing about.
Before you make your next investment, in whatever you decide, make sure you know the ins-and-outs of the business.
WARNING!! THIS INCLUDES BITCONNECT...which I see a lot of people running to now!! I'm a full time trader and the whole concept of "volatility trading bot" is probably the most ambiguous, nonsensical idea ever.
Now...
I know this is probably the worst time to even recommend a cloud miner considering all that I've mentioned...but...if you still are looking at the cloud miner route...I recommend you read a post about a better service than all of the cloud miners out there.
And I am only mentioning that it's a better service because it's probably the most transparent and they are also the creators of the most powerful ASIC machines on the market.
As a full time investor, I am way more comfortable with this service than any other service available as your coins are always liquid.
Also, there is no affiliate offers, so I get nothing from mentioning their service...I just genuinely like them over any other cloud miners out there.
This is not a blog saying Genesis is a scam...
...but this is a blog more or less about personal responsibility on the way you invest.
Don't blame the company...even though we certainly could .
Don't blame affiliates/promoters...because we didn't do enough due diligence ourselves.
Don't blame anyone if you've over invested...and a clear way to know if you've over invested is if you're too emotionally attached to your investment.
Take it all as a learning lesson!
If you enjoyed and learned something...you know what to do!
Feel free to give me a follow as well!
For those of us who are into Genesis Mining, we can only hope that no one else get's into it anymore. Because with each new miner entering the scheme, the bitcoincake has to be divided in ever smaller portions.
And then we are still in 'positive' mode, meaning we believe we actually get 'mined' bitcoins back. What is more realistic, is that Genesis Mining pays us back our own bitcoins at an ever slower and smaller rate. And for that they even don't need to have any mining equipment :-)
Bitconnect to me is going to be the biggest ever scam to hit cryptocurrency here in the next few months. There is no way a company can push out 120% + every 90 days like clockwork. Where they get you I think is they are paying you back in BCC their own coin which they can mine and giveaway at any rate so the value will continue to plummet at some point there will be a critical mass that hits. I would not be suprised if the SEC gets all over their butt soon.
Also Genesis Mining has been good to me and they are still paying their are just delays and then lump sum payments weekly. If anything it actually helps with fees lol I have a rather good feeling they will get their butt in gear and back to dailys this month.
Agreed. Bitconnect makes zero sense with how they are churning out the type of profits they do. I've been trading for 10+ years...and I am a software developer for the past 8 years...and I can still honestly say, the whole "trading volatility bot" is the most ridiculous term I've heard. I'm sure people will profit from the company as that's the way these pyramids work...but the core business makes no sense at all.
As for Genesis...I've only been in for about 2 months...probably the worst time to be in it. My issue with them is more about the operation rather than them being a total scam. They just seem to be making the worst moves they can possibly make. Their plan of action is hugely lacking a proper solution...
...and I know most of the company is operated by math geeks...but the longer they let this work out...the harder the math will be to remedy the current issues.
I'd have to ditto on the Genesis part of your comment, bitcoinflood. They've been "clumping" payouts together for some reason, and I can only speculate why. They may just be trying extra hard to make their stuff "bug proof" or "hack proof", you know, that whole "relentless persuit of perfection" German mentality. I'm hoping and suspecting they are taking the long-haul approach, so I'm being patient.
I have never seen the point in cloudmining.
If they have the equipment..why not mine the coins and keep them for themselves.
Oh Wait!
Exactly. I almost signed up and then asked myself that very question and could not answer it. It is like those ads on tv back in the day for psychic who will give you the winning lotto number. Why not use that gift to "see' the number for your husband or girlfriend after signing an iron clad contract.
Well the point of it for them as a business is leverage and a hedge. They get to leverage and buy more equipment at the cost of users taking a portion of the earnings...and hedging since the resale value of equipment (GPUs and ASIC) reduces eventually.
There's no way they would have gotten that big without funding from investors and users...it's just a mathematical game of scale, which is even more apparent since the the founders are really math geeks.
As for users, it really doesn't favor anyone using the service since you give up so much power...but there is opportunity none the less...and users basically take a chance for the opportunity.
True when the volatility of bitcoin was not as high as the past year or so. It makes no sense now for a cloud miner to share profits with users given the soaring prices for bitcoin.
sounds like the perfect set up for a scam.
Imagine that they did what you said....
then... about the time they get their equipment paid for....
"Oh my goodness...we got HACKED"...
all of the user's coins are gone.
oh my!
We need Answers!
Start with the promoters of these companies. See how long they are around to answer!
If they referred you and got paid for it. You have every right to expect an answer. And they have a duty to find out.
I almost want to say...that's the wrong way to look at the situation.
No on had to follow the promoters...it's up to an individual to do the due diligence before investing.
I can honestly say, I got caught into the trap as well...but I am not going to blame someone else for me blindly investing "hoping" it works out like it worked for them.
Ask the representatives of the company. That's what these people choose to become when they took money for advertising.
True...but that get's me no answers at the end of the day.
...and my point is, if one did their due diligence properly, you'd either not be in the situation in the first place or not have over invested and accept the loss.
I for one, think that the people who profit using both the companies willingness to exploit others need to be held accountable.
Have a look around, it's still happening right now.
You are in a better place @reyhaynes, taking responsibility for your own decisions. I do understand that is a necessary step in obtaining success.
But, like the cigarette companies who encouraged smoking and for years and said that there is no harm . . . these people need to be exposed.
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There's no cloud, it's somebody else's facility..