Numerous cloud-mining companies have come and gone. If we were to include all the shady "bitcoin doubler" and "earn 15% per day" websites, I bet we could easily find over a hundred similar systems created to con good people out of their bitcoin. Usually, these companies are running some form of a pyramid scheme, where new customers initial payments, help pay for the withdrawals of existing customers.
After the first payments are completed, the early customers refer friends and vouch for the company, which encourages another round of new users to join, and so on. Many of these scam sites stay online for 6 to 12 months, payout numerous times, and even respond to customer service queries as one would expect. Then one day, when the customer least expects it, their websites go down and the company essentially disappears.
So this brings me to HashFlare...
In late August the company put out a statement notifying its customers that all lifetime bitcoin mining contracts were being changed to 1 year contracts, effective immediately. This left a bad taste in many long time clients mouths, but as the price of bitcoin continued to increase rapidly, these new 1 year contracts were still considered worth the investment.
That's of course assuming customers can actually make withdrawals....
Many don't realize how bad it's actually become, but Hashflare's website was under maintenance for 11 of the 48 days between Nov. 3rd and Dec. 20th. During that same time, payments were suspended for 11 days as well, though not necessarily the same days as "maintenance" was taking place. Certain days the site worked fine, but withdrawals weren't enabled, and others, the site was simply not accessible.
In total, customers had 15 days over a 48 day period, or 31% of the time, where requesting a withdraw was simply not possible for most, or all of the day.
Then, on Dec. 20th HashFlare turned withdrawals back on, but raised the minimum withdraw to a staggering 0.20 BTC (approx $3,500 at the time) The next day it was dropped to 0.10 BTC ($1,750) before being cut in half one final time to 0.05 ($875) on Dec 22.
So here we are, three weeks later and the minimum withdraw hasn't been lowered since...
The company has posted on social media numerous times, stating that the delays, maintenance, and withdrawal limit increases are all a result of the company attempting to deal with the unusually high fees on the bitcoin network.
While this is admirable and finding ways to deal with higher fees should be a priority to all bitcoin related businesses, even at the networks worst moments a 0.05 BTC minimum withdraw limit can not be justified for three weeks.
Prior to these hikes, the old minimum was 0.01 BTC, plus the network fee. When the limit was changed to 0.20 BTC, bitcoin was $15,000, coming down from a high of $20,000. At that time, a 0.01 BTC ($150) withdrawal, would have cost between $20 to $30 to send. While the fee is unquestionably high, many users would have gladly paid the extra cost to have had access to their bitcoin. In recent weeks, as the network fee has gone down, HashFlare has lowered their fee, but not their minimum withdraw limit.
From this, we learn that the network fee isn't the real issue keeping them from paying out.
Let's say you had 10 THS of power and 0.02 BTC in your account on December 22. It's now been three weeks since the limit was increased, yet you still wouldn't have mined enough to withdraw. You would now have over $500 in your account, yet still not have access to it because HashFlare has spent the last month trying to figure out how to lower fees for their customers, which at best would be by something like $15 less per transaction.
Add this to the 48 days of spotty service and delayed withdrawals prior to the increase and you begin to see that HashFlare has essentially stopped processing payment transactions for the majority of their customers over the last two and a half months. Of course, this all comes on the heels of the company frustrating many of their most loyal customers by abruptly ending lifetime contracts at the end of August.
If a cloud-mining company was truly mining with the amount of hashpower they've sold or less and it was delegated to customers properly, payout issues would not occur as you would have the necessary coins being generated to fulfill payouts. The price increase of bitcoin wouldn't effect how much was being mined. Yet, if the company doesn't produce enough coin, or have enough in reserves, then they may become forced to purchase bitcoin at the current price to meet payout demands. If the price suddenly increases, as happened with bitcoin over the last 6 months, it can get expensive and ugly rather quickly.
For example, purchasing 10 bitcoins to pay your customers would have cost someone $20,000 in April, $45,000 in August, $70,000 in October and up to $200,000 by December. Simply put, if they over sold contracts or really don't have the equipment on hand to produce the hashpower needed to fulfill all paid contracts, then it's only a matter of time before it ends the same way for HashFlare as it has for hundreds of cloud-mining operations before them.
They were reliable for 2 years when the price of bitcoin was consistently under $2,000. This summer as bitcoin suddenly rose from $2,500 to $4,500 the company began to have their first issues, which have only gotten worse as the price has increased further. I do believe they will lower the minimum payment back to 0.01 BTC and continue making payments in the short term, but I'm not sure if they are still around in 2019. Just keep an eye out. Something is not right here.
What do you guys think?
Peace,
@OracleFrequency
The end is truly here. What foresight you have. I should have heed the warnings when they limited the contracts to 1 year. What coincidence that they now require identification and stopped bitcoin mining before the first year of contracts begin to end in September.
I was thinking the same. Something is wrong here, that is for sure. Yeah it's good, that they have faces on their Instagram, and that they attend(ed?) some kind of conferences, but the amount of equipment shown there just can't be enough. They seem not running out, meanwhile the demand is huge. I hope that they don't disappear, and that the interview (according to their Facebook) will bring some clarification. I have 1,9 TH/s-es there, was thinking about getting some more, but these facts are worrying.
Enjoy the vote and reward!
Wow! Thanks!
That BTC withdraw minimum is insanely high!! wow! resteemed and upvoted, nice post..
Agree with ur statement. Yes the company began facing with some issues when the numbers of customer rised and the btc price began to hike. Rising min withdrawal is disaster too. I am not going to give up on them but would rather wait and see their promises they gave in recent interviews like opening new farms in iceland, providing videos of their hardware and bla bla. Yet hashflare is the profitable company in the market and contracts are cheap. Would give them at least 2 months more and decide either to stay or change.
Check thia article when u get time
Hashflare to Include top 20 coins in 2.0?
https://steemit.com/hashflare/@dubaiyu/hashflare-to-include-top-20-coins-in-2-0
I just realized I have paid $4000 to buy in but it is not showing up in my account. Looks like I tried several time thinking I made and error all were 500$. Over a month time period. Did they steal my money or did I do something wrong?
it will end soon
I think so too... I think as we start seeing the price of Bitcoin coming back up, they will be forced to exit scam. They'll keep the withdrawal limits where they are just so they have something to exit scam with.
They seem to go out of business soon. I wrote an article here on Steemit (in German) I will update in English.
It really isn't looking good now. With the BTC return per T/h less than the maintenance the accounts aren't doing anything. According to the T&Cs if it remain like that for 21 days - it's been 14 already - then contracts are void. Gone. No refund, no nothing. I have 140 T/h with them, so this is a serious problem for me! An easy solution would be to reduce the fees (as genesis has done), but that doesn't seem to interested them.
Very worrying times. It really seems BTC mining isn't profitably with difficulty going up, the value going down and maintenance being the same.