Bitcoin has been plagued by lots of companies offering the next big thing in “cloud mining”, and eventually turning into a scam. That list has grown quite long in recent months, and the latest name on the list is Cloudminr.io. According to the company’s website, somebody hacked their database and exposed all of the user accounts.
The Volatility of Bitcoin Cloud Mining Services
For those among us who have been involved in Bitcoin for quite some time, cloud mining has always been synonymous with a huge potential for a scam company. Granted, there are a handful of legitimate Bitcoin cloud mining companies out there, such as CEX.io, Bit-X, and Genesis Mining. But for every legitimate company, there are at least a handful of Ponzi schemes and scam sites as well.
In the case of Cloudminr.io, it looks like either their Ponzi scheme has collapsed, or the owners simply ran off with a ton of funds. Despite stating a message on their main page regarding an “alleged” database hack, exposing all user accounts and passwords, no one truly believes this is the official story.
Additionally, the people responsible for “hacking” the Cloudminr.io database are selling off the rest of the user data in exchange for a symbolic one Bitcoin. A total of 79,267 accounts has been created on the Cloudminr.io website since its inception and none of them are safe right now.
To make matters even worse, affected users are unable to reset their passwords or access their account in any way. The “hackers” have gained full control of the Cloudminr.io website, which can be attributed to lacksadaisical security practices by the website owners. A common trend when it comes to cloud mining websites, unfortunately, as most of them are thrown together quickly in order to collect your funds as soon as possible.
A prime example of horrible security measures by site operators who clearly don’t care about their customers is the storage of all user information without hashing the data. However, the possibility remains that one of the employees was hacked, which leads to a way to unencrypted stored information.
Trusting Bitcoin Cloud Mining Services
It is becoming increasingly difficult to separate the proper Bitcoin cloud mining sites from the ones that will run off with your money at any given moment. One possible way to separate the wheat from the chaff is by checking whether or not the company you are looking at offers you a way to buy and sell mining power through an internal marketplace.
Similar to how platforms such as Bit-X and CEX.io operate, this gives users a feeling of security, as they can sell their Bitcoin cloud mining contract at any given time. However, not all platforms who have offered an internal marketplace can be trusted either, so this is not a guarantee for a safe investment.
Images courtesy of CloudMinr.io, Shutterstock, CEX.IO