HashFlare Crypto Cloud Mining Service Blocks Small User Withdrawals
HashFlare Has Blocked Small User Withdrawals
HashFlare appears to be holding funds hostage via a combination of inefficient mining and an increased user withdrawal threshold. Those who purchase HashFlare mining contracts have seen the funds and mined crypto coins locked up.
Meanwhile, there is a risk that the user contracts could be suspended. Even at the lower threshold, withdrawing 0.03 BTC leads to problems. Accounts are in danger of being terminated as the funds are held hostage. The threshold has been raised to 0.05 BTC and 0.1 ETH. This could lead to even more contract being caught up in the confusion.
There Has Always Been Suspicion
Cloud mining has been seen as a borderline scam for a long time because of the fact that contracts are often not profitable. Besides that, there are bad actors who attempt to disguise Ponzi schemes as a genuine mining contract. These scams usually hide amongst the genuine mining contracts, making it hard to identify them. Hashing power on all major networks rose quickly in just a few months.
The reason for locked funds dates further back to the start of June. There was so much hashing power flowing into Bitcoin that contracts saw all the mined coins paid to the maintenance fee. As a result, HashFlare suspended some contracts since they would soon become unprofitable.
Because of this situation, those that bought HashFlare contracts earlier might be in a gridlock. They will not be able to withdraw funds. However, a user managed to get a refund by convincing the credit card provider to help him get back his funds.
To achieve this, he simply filed a chargeback dispute with his bank. This led to the funds being pulled back into his account. It might be a strategy, which more people on HashFlare utilize to retrieve their money. However, for it to work, you need to get the chargeback procedure just right. A major irony is that it was centralized banking which saw people get back their funds.
The Bitcoin hashrate more than tripled from just 13 EHash/s since the beginning of 2018. This has even affected its practicality as a means of payment. After a recent drop in the hashing power, the BTC hashing power is rising again. It seems set that it will reach the 40 EHash/s rates again.
This will certainly affect the breakeven price for some miners of BTC. However, this price will depend on when the miner bought their hardware. The level at which a mining farm becomes profitable can be as low as $4,400. However, it can hit as high as $5,800 for some other miners.
This current situation has made critics conclude that cloud mining has become even more meaningless in 2018. It was already quite unprofitable but this may be the final nail in the coffin. It is especially so for those trying to mine BTC rewards. In future, if the hash rate goes up above 40 EHash/s, it could become too costly much for anyone to mine.