Hashflare Cracks Down on BTC Mining

Hashflare Cracks Down on BTC Mining

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If you are a crypto enthusiast, or you have spent some time surfing the niche, you probably are aware of Hashflare standing out among cloud-based mining services. However, it just went hard on BTC and disabled all BTC mining contracts. An official statement was issued by the company, where they explicitly mentioned that all of the SHA-256 based mining contracts would be terminated.

The primary reason they provided in the statement was that BTC mining does not seem fruitful or rather profitable in the current scenario and therefore, the company felt an urge to disable its SHA hardware in order to keep up with the costs of running the resources for other cryptos on the platform.

It must be noted that this decision did not come out of the blue and for about a month, Hashflare monitored that the mining profits are far below the operational cost of the hardware. It did not only put them at a loss, but the company was not able to release ‘decent’ stake to the investors as well. They also mentioned that multiple technical solutions were tried in order to keep the neck of the system floating, but the ecosystem is engulfed in a sheer uncertainty, which contributes to its staggering Return on Investment.

A lot of users were concerned as to whether the decision was legal or not and after a quick research, we found that Hashflare explicitly mentioned in its ToS that if mining remains unprofitable for a spell of 21 days, the service is terminated.

However, the user community was quite outrageous since the company did not notify them of how the funds present in their accounts were supposed to be reimbursed. Their contracts were straightaway canceled, which propagated a feeling that it might happen to be an exit scam since Hashflare continued to sell contracts even after it did not have any profit after 21 days.

Towards the mid of July, they announced that all the registered customers would have to undergo KYC/AML because, in order to fulfill the International compliance, they need to identify users on their platform to continue the provision of services without any disruption.

It is worth noticing that as of 2nd August 2018, BTC mining difficulty has surpassed 100% if we compare it with November 2017. This is indeed a huge shift that the mining service providers need to take into account. Furthermore, this difficulty is expected to increase by 10 percent towards the end of 2018.

It is also quite important to understand the sheer difference between hardware and cloud-based mining. The native hardware mining pools are quite effective if compared with the cloud mining alternatives, but they do raise an array of concerns, particularly related to electricity consumption. So it is quite easy to understand that if companies have enough resources to power the ASICs, then they are certainly going to enjoy the luxury of 51% dominance on the network, which could eventually lead to an attack on the network. This is the reason why an alternative consensus was developed, namely PoS, which could prevent and even thwart a 51% cyber-attack on the BTC network. But even this algorithm has some issues since it has not been fully tested to the similar extent as PoW was tested and it is also thought that its extensive use might result in the concentration of wealth.

Therefore, it is quite evident that in order for any crypto venture to bag great scores, the presence and efficient use of mining is imminent and the experts need to work upon this area to make it more profitable.

 

Featured image via BigStock.

19 COMMENTS

  1. well well well, only 3 months ago I did warn about cloudmining and 10 months ago published a list of save cloudmining companys not playing around with customers. Nethertheless there is always a legal way to claim money back if contractual terms are covering scam, no matter whatever Hongkong terms they pull into contracts as the legal jurisdiction. Cloudminers are supposed to be maximum profesionals of the branch and did well know this will happen. Therefor they are responsible for publicity fraud, contractual fraud and investment fraud all in one. We are prof miners too but ever thought to screw little investors paying for our equipment and energy risks and running off with it. Hashflare, Genesis Mining, just name it….you´ll end up in jail no matter where you mine and hide.

  2. Strange you published it today. Contracts were resumed like 2 weeks ago. I agree with your point about btc mining profitability though, it’s not profitable at all right now.

  3. Hashflare is experiencing difficulties, that’s true, but contracts are alive now. No profit since the btc rate is impossibly low, cloud mining industry struggles a lot.

  4. 100% true. Yes, market is down, everything stopped and the only thing I don’t undestand is why people are so mad about it? Those are ctypto market rules

    • It’s because they are lying about it. Genesis said my 5 TH/s mining was making .00000900 BTC/day. Meanwhile, my Antminer makes .00020000 BTC per 5 TH/s for every 24 hours.

  5. Can’t blame cloud mining services for this shit, they are losing money too, we all in the same boat

    • True story, I mean I read some reviews BTC will be back in next 3 months, so we’ll be able to invest

  6. This because of the bearish trend that has been affecting the crypto market, and the increasing mining difficulty. Cloud mining is in big trouble(

  7. i think u should be a silly to dont understand this type of market, it is difficukt to control or do something with it, so we all should just keep calm guys

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