Derek Ross on Nostr: I don't often talk about this, but with Swan's dive into what is essentially cloud ...

I don't often talk about this, but with Swan's dive into what is essentially cloud mining, I felt it would be good to discuss this.

About 3 and a half years ago, I decided to mine Bitcoin at home on a small scale. The goals were to deal with noise, heat, and to learn. I ended up heating my house for the entire winter (an all winters to follow) with Bitcoin. Eventually, I wanted more hash power and started to look into options.

Lord Fusitu'a (RIP) saw my Twitter discussions about wanting to buy S19s and DMed me about it. He said that I didn't have to buy S19s and that their was a better way to proceed it I wanted to learn more.

He introduced me to a company called VBit. They were a cloud mining company that sold hash power in different increments. 33 TH, 66 TH, and 100 TH. They supposedly had facilities in the US mid-west and in Canada. They were a Philadelphia company! Go Pennsylvania! I was skeptical, so Lord invited me to on of their meetings to be transparent.

My takeaway from the meeting was that this was essentially the Amway of Bitcoin mining. It was a MLM with sales tiers, partners, and referrals, everything MLM! Very shady.

I asked Lord about this and he said that he's vetted them and been mining with them for 6 months and has on-boarded many Tongans to this company. He said I could just mine and not participate in the MLM portions of the company. He said many people did this.

Again, I was skeptical, but I really wanted to get an S19 and start to mine at a larger scale. It was hard to get an S19 now, with many being in backorder, so I decided to move forward. I purchased 100 TH, an S19, for $12,000. I was able to mine with the hash that I wanted and not have to worry about dealing with the excessive noise and incredible heat production in the summertime.

Because I was skeptical, I didn't use bitcoin for my purchase. I used a credit card. I knew if I had a problem, I could get my money back. Or at least I had hoped.

Everything was great for 5 months or so. I was getting monthly payouts. I was happy.

And then the Shitcoins started to blow up in May and June of 2021. It turns out that VBit was leveraged and trying to earn yield, with customer's funds, at Celsius or another entity that blew up.

But no one knew this for months. All payouts stopped. Zero communication. The company CTO left. The CEO was unable to be found. And then the company changed from names from Vbit to Advanced Mining. 🧐

Well, that was enough for me. I contacted my credit card company and was able to get $9,000 back. Advanced Mining settled with me, saying that I had made $3,000 worth of BTC withdrawals and they didn't need to reimburse me for that. I was was happy with that outcome and wanted this over and done with.

I found a couple Advanced Mining support groups on Reddit and Telegram where so many regular people, that weren't Bitcoiners in the same capacity as me, were completely rugged.

Advanced Mining has since been investigated by the SEC and sued in several states. I don't know what's been going on with them over the past year and a half. I stopped paying attention to them once I was out and happy.

My entire point here is that if it's not your physical device or your hash power, there's a major risk. Please be careful out there.