Crypto Miners: Legit or Scam?
Things move quickly in the crypto world. Just a month ago, it seemed no one was talking about crypto miners and yet now it's the hottest thing since play-to-earn games and NFTs.
What are crypto miners?
First of all, when I say "miners," I'm not talking about the people using ASICs to create Bitcoin or any other mineable crypto. This is instead a new sort of DeFi protocol that sometimes goes by the name "miner" and sometimes "minter." Anyway, neither of them actually "mine" crypto in the proper sense, so it's a stupid name.
Crypto miners are basically systems where you put a certain amount of money into a smart contract and it feeds you back that money at - supposedly - a set fee per day. Most of them pay out 3% but over the past few days there have been some ones that claim to pay 10% or even 12%.
This sounds like a ponzi scheme...
It does, doesn't it? And it is hard to say that it's not. A loose definition of "ponzi scheme" is that it pays the original investors with the money brought in by new investors. As long as the scheme keeps going, everyone gets paid... until, of course, the eventual collapse.
I don't claim to know how these crypto miners work, but they sure look a lot like ponzis and that makes them incredibly high risk.
Can they make you money?
I was curious about these about three weeks ago and went in on Fantom Miner. I chucked in just $20 to see and it paid out pretty well, so I added another few hundred.
However, it left me a bit confused. Was I getting 3% per day? Not really. It was more like this:
Day 1: 15%
Day 2: 12%
Day 3: 10%
Day 4: 10%
Day 5: 8%
Day 6: 7.5%
And so on... It has not yet gotten as long as 3%, which is strange because they consistently market it as paying out 3% per day:
However, I wasn't complaining. I got my original money back quite quickly and then was making a small daily profit. With Fantom's recent price increase, it's been a pleasant earner.
After that, I jumped into two Avax miners:
They have both paid out well and in fact are better than the Fantom miner. I still get between 8%-15% daily and I have no clue why. The second one is better than the first in terms of payout, but the first does look like it might last longer.
Will these crypto miners last long?
My main worry with investing in these miners was that they would collapse on me. I assumed that after a week or two, I'd log in and find that the contract had been drained or the website taken offline, but so far so good. I've ROI'd on the stuff I first went in on and the rest are nearing 50%.
Of course, anyone with two brain cells can see that this is super high risk because they simply cannot last long-term. Moreover, each day there are several new crypto miners, with higher and higher payouts, meaning that the steady investment required to sustain these systems will likely be spread out over too many of them.
The devs mostly seem reliable and that is important. You can get to know these people and if they run a few miners responsibly, then you can feel good about jumping into the next ones. When a newbie comes along with an impossibly high daily payout, that's when you need to be wary.
I really like these ones on the BSC network:
Sushi Miner
USDT Miner
BTC Miner
CAKE Miner
All of them have paid out consistently and again at much higher than the 3% promised. They also have large pools, so they are pretty stable so far.
Crypto Mining Strategy
Finally, let's talk strategy. The first and most important thing is to check that it is legit - or at least as legit as any ponzi-looking protocol could be. Take a look at the contract, the pool, the devs, the Telegram group.
Next, get in early. This is perhaps the most important thing. I got in on some of those ones linked to above within the first 15 minutes. For the sushi coin one, I got in within 30 seconds.
The reason why you get more than 3% is basically that you're buying "miners" that "mine" crypto for you. Again, this is not proper mining. However, the price of miners is tied to the amount in the pool. If you get in early, you get cheaper miners. You keep those miners, so someone who buys in 24 hours later might have to spend 10x what you spent to get the same number of miners. Ya dig?
Still, if you go in late, you get your 3% daily. I've never seen less than that, even on a KCS Miner that I haven't linked to here because it's a bit rubbish compared to the rest. 3% per day means you'll ROI in a couple of weeks, and then you're making a tidy profit.
You don't have to withdraw your money, of course. You can compound to earn more and more and more... But do be aware that this is super risky and you should take back what you can early to ameliorate some of that risk.
Right. That's all for today. This was not financial advice and I have said several times that it is proper high risk degen stuff. Be careful, DYOR, and have fun.