Mining Contracts Restored On HashFlare
Mining has exploded in popularity in recent years. In the initial days of Bitcoin, miners were few and the profits were significant. Computing power had to be very high, and the miner needed to have a deep technical understanding of how the process worked in order to mine Bitcoin. But at this time, miners could mine entire Bitcoins during the day, if they had the skill to do so.
Fast-forwarding to 2018, the explosion of price of Bitcoin in 2017 means that millions of consumers all over the world are looking to try their hand at mining the valuable currency. In its own form of the American gold rush, many flock to the industry dreaming of mining entire Bitcoins and quitting their day job. Unfortunately, this is not the reality for most miners. Mining now requires an incredibly high standard for computing power, high levels of energy, and it typically gives minimal returns.
That is, it provides minimal returns for the individual. This is not to say that the mining industry for Bitcoin doesn’t continue to turn a massive profit for itself. In particular, cloud mining contract providers have done consistently well for themselves. Offering massive mining solutions, they use cloud mining technology to use customer power to mine, or simply charge them maintenance fees, then giving consumers a very small portion of the coin they are able to mine in exchange for their computing power and money.
But one of the largest providers of these mining contracts, HashFlare, had previously halted all new contracts for Bitcoin mining due to a myriad of financial and logistical reasons. However, the company has recently decided to reinstate the Bitcoin mining contracts, and will be accepting applications again on July 28th of this year.
The Mining Termination
The company initially terminated contracts mining using the SHA-256 contract based off of one of their bylaws. Apparently, HashFlare reserves the right to terminate contracts with no promise of reinstatement if the mining done by the company has no profit for a period of 21 days consecutively. They terminated all contracts on the 20th of this month, stating that their mining of Bitcoin had yielded no profit for 28 days.
This caused some concern within the cryptocurrency community. If larger mining services are unable to make a profit verifying blocks, might this de-incentivize others to participate in the integral mining process on the blockchain?
An Optimal Solution
In a Facebook announcement, HashFlare elaborated that they had been working tirelessly this past week in order to find the “optimal solution” that might allow them to continue providing these mining contracts. According to the company, they will now begin accepting the contracts yet again. HashFlare customers were initially outraged by the revelation that their company would be terminating contracts for Bitcoin mining.
It is likely that the recent rise in price for Bitcoin was a major factor in HashFlare’s decision to reinstate the Bitcoin mining contracts. At this current price, mining contracts will likely not be incredibly profitable, but miners still might participate in the hopes that a huge Bitcoin rally makes their mining participation worth quite a bit more.