Cloud mining: why most offers are a scam and how to mine remotely the fair way
Most cloud mining offers are in fact Ponzi schemes: they mine nothing and pay earlier clients with new clients' money. You don't own any machine, you can't see any hashrate and you have no way of verifying that mining is happening at all. If you want to mine remotely, a fairer route is to buy your own miner and put it in hosting – the machine belongs to you and you can see its work in the pool.
Summary
- Cloud mining = you pay for “rented hashrate” that doesn't exist as a specific machine. You can't verify it.
- Typical signs of a scam: a fixed daily return, bonuses for referring friends, a minimum deposit of a few tens of dollars and withdrawals only “once conditions are met”.
- You can calculate the return yourself: today 1 TH/s on Bitcoin earns roughly 0,84 Kč a day gross. Anything significantly more is suspicious.
- With hosting, you own a physical machine, have an invoice for it and pay for electricity and management. But hosting also carries the risk of falling returns – no mining has guaranteed profit.
What cloud mining is and why it mostly makes no sense
Cloud mining promises that you “rent” part of the computing power in someone else's mining farm. You pay for a contract for a certain hashrate (for example 10 TH/s for a year) and the company credits you with mined coins every day.
But think about why anyone would do that. Whoever has cheap electricity and profitable machines will let them mine for themselves. Selling hashrate in advance mainly makes sense for someone who needs money right now – or for someone who has no machines at all. That's why even legitimate cloud mining usually works out worse than your own miner, and fraudulent cloud mining doesn't work out at all.
How a Ponzi scheme works in cloud mining
In a Ponzi scheme, payouts don't come from any real activity but from new clients' deposits. As long as people keep joining, the system pays out and looks trustworthy. Satisfied clients recommend it to others, often for a commission.
As soon as new clients dry up, withdrawals start being delayed. “Technical maintenance”, a “migration to a new system” or a new withdrawal condition appears. Then the website disappears.
Example: HashFlare
Between 2015 and 2019, HashFlare sold cloud mining contracts worth more than USD 577 million to hundreds of thousands of people. According to the US Department of Justice, it had less than 1 % of the mining capacity it claimed and showed customers falsified earnings dashboards on its website. The founders pleaded guilty to fraud in February 2025 and were sentenced in August 2025.
Signs of fraudulent cloud mining
| Sign | Why it's a problem |
|---|---|
| Fixed daily return (“2 % a day”, “USD 100 = USD 5 a day”) | Real mining income changes every day with network difficulty and the coin price. A fixed number means nobody is calculating the return. |
| Sign-up bonus and commissions for bringing in other people | The company needs a flow of new money – a typical feature of a Ponzi scheme. |
| No way to find out where the machines are and who owns them | Without a data centre address, photos and specific models, you have nothing you can verify. |
| You can't see the hashrate in a pool, only on the company's website | A dashboard on the website may be nothing but graphics. Real hashrate is visible in a mining pool. |
| Withdrawals only after reaching a limit or for a fee | Money “in your account” often can't be withdrawn at all. |
| Payment in cryptocurrency only, company outside the EU | If something goes wrong, there's nobody to sue and nowhere to complain. |
Check whether an offer can work at all
One number is enough to check. At today's difficulty and exchange rate, 1 TH/s on the Bitcoin network earns roughly 0,84 Kč a day gross (we recalculate every hour).
Electricity still has to be paid out of that. A modern miner with an efficiency of 16.5 J/TH uses 16.5 W per 1 TH/s, i.e. about 0.4 kWh a day. At the cheapest hosting price of 1,13 Kč/kWh, that's roughly 0.45 CZK. The net income from 1 TH/s is therefore just a fraction of a crown per day.
| Cloud mining offer | Promised return | What the hashrate would really mine (gross) | Verdict |
|---|---|---|---|
| 10 TH/s for 2,500 CZK, payout of 50 CZK a day | 50 CZK/day | approx. 8.40 CZK/day | the promise is 6× higher than reality – a scam |
| “Invest USD 100, get 3 % a day” | 1,095 % a year | doesn't even state the hashrate | not mining, but a Ponzi scheme |
| Contract paying “according to actual mining” with an electricity fee | variable | verifiable only if you can see the hashrate in a pool | check the company and the terms |
The calculation is indicative, as of 18 October 2026. You'll find the current earnings of specific machines in our ASIC miner profitability table.
Cloud mining, hosting and home mining: the differences
| Cloud mining | Hosting your own miner | Home mining | |
|---|---|---|---|
| Who owns the machine | nobody specific, you buy “hashrate” | you, with an invoice for it | you |
| How you verify it's mining | only from the company's website | you see hashrate and payouts in the pool | yourself, at the machine |
| What you pay | a contract upfront | the machine + electricity and management in CZK/kWh | the machine + electricity at household rates |
| If the company goes under | you lose everything | the machine remains your property | not applicable |
| Noise and heat | not your concern | not your concern | your concern – an ASIC is loud and produces heat |
| Guaranteed profit | promised – and that's the problem | no, earnings change | no, earnings change |
Hosting isn't risk-free. If network difficulty rises or the price falls, earnings drop and you keep paying for electricity. The machine may break down. The difference is that you can see these risks and calculate them in advance, whereas with cloud mining you don't even know whether any machine exists.
What to ask any hosting provider
- Where exactly is the machine located and at what electricity price in CZK or USD per kWh?
- Will I see my machine's hashrate in the pool and payouts in my own wallet?
- What has the site's uptime (the share of time the machines are running) been over recent months?
- Who handles repairs and at what cost, and what happens to the machine if I terminate the contract?
- Which company am I signing the contract with and where is it registered?
To give you an idea of what such figures look like: as of 16 October 2026, our hosting locations had these parameters.
| Location | Price incl. management | Uptime |
|---|---|---|
| Nigeria #2 | USD 0.0525/kWh | 97.12 % |
| Norway – Arctic | USD 0.064/kWh | 99.85 % |
| Finland | USD 0.065/kWh | 99.21 % |
| USA | USD 0.065/kWh | 99.54 % |
You'll find current prices and available capacity on the ASIC miner hosting page.
What next
- If you're considering your own machine, start with the article How to choose an ASIC miner – how to compare hashrate, power consumption and payback.
- What an ASIC miner actually is and why Bitcoin is mined only with them.
- Fraudulent AI trading platforms use a mechanism similar to cloud mining.
Sources
Frequently asked questions
Does legitimate cloud mining exist?
How can I tell that a cloud mining offer promises unrealistic returns?
How does hosting differ from cloud mining?
Is profit guaranteed with hosting?
What should I do if a cloud mining service has stopped paying out?
This text was prepared with the help of AI. Facts, figures and procedures were checked by Yegor.
