Hashflare is a well-intended service that went awry. It is a cloud mining service that has fallen behind in recent times. Here at BlockchainBiome, we look at how Hashflare works, whether Hashflare is profitable and some of the features of this service. This Hashflare review will give you all the information that you need about Hashflare.
Hashflare is a cloud mining service that charges users on a subscription basis and distributes the mining rewards based on the amount of computation power that each subscriber holds. It has recently copped a lot of flak and created concerns over its legitimacy.
Hashflare has been severely reprimanded quite recently. Several people have claimed to have lost considerably significant amounts of money through Hashflare. The fallout against Hashflare can largely be attributed to the fact that mining Bitcoin has been considered to be not profitable for quite some time now. The questions that arise, as a result, are: Is Hashflare really to blame for all the losses incurred? Is the stern criticism towards Hashflare justified? Before we move ahead in this hashflare cloud mining review we get to answering these questions, let us back up a bit, what really is Hashflare? How does Hashflare work?
What is Hashflare?
Simply put, Hashflare is a cloud mining service for mining Bitcoin and other cryptocurrencies. A cloud mining service is one that allows users to use a shared data center to carry out mining. This removes the need for owning and managing your own hardware to carry out the computationally intensive task of cryptocurrency mining.
Hashflare owns special hardware, used for cryptocurrency mining. The equipment, as termed by Hashflare, is called a miner. A group of such miners constitutes a pool. There are several pools available that carry out the task of mining cryptocurrency. The payout to the user is proportionate to their contribution to the whole cloud mining process.
Through Hashflare, a user purchases a part of the computing power of the hardware hosted by Hashflare and receives Bitcoin (or any other cryptocurrency) proportionate to the contribution of the hardware he/she owns, to the mining process, after a commission deduction.
Here are some reasons for the severe criticism meted out at Hashflare:
Cloud mining is no longer profitable
Cloud mining was created with the intention of having a collaborative system in place, to mine cryptocurrency. Such collaboration enabled distributed ownership and trust. This intention aligned itself with the primary intentions of cryptocurrencies and blockchain, which, was to remove decentralization and establish distributed trust. However, the payouts generated by the mining process eventually turned out to be lower than the maintenance fees. As a result, the entire process of Cloud mining through Hashflare was deemed unprofitable.
Maintenance fees are high
Although the maintenance fee is at a fixed rate and remains constant, the falling price of Bitcoin and other cryptocurrencies meant that the fixed maintenance fee ended up exceeding the payout. This maintenance fee depended on the computing power used. More computing power was required to mine the same amount of Bitcoin, which, increased the maintenance fee. The ratio between the payout and the maintenance fee began to decrease and reached a ridiculously small value.
High withdrawal limits
The withdrawal limit for Bitcoin was set at 0.05 BTC, which, was considered to be extremely high. However, the withdrawal limit has since been decreased to 0.01 BTC. But, the initially high withdrawal limit caused a lack of interest in many users.
Is Hashflare a scam?
Many believe Hashflare to be a Ponzi scheme. Hashflare is considered to have taken money from users, used the money from new users to pay certain old users, then, packed up their bags and left.
While this accusation is probably not entirely true, the lack of success of what they claimed to be a promising mining solution certainly raises some concerns.
Considering the above reasons for its failure, it would be advisable to stay away from Hashflare and other cloud mining services. It would be a bit harsh to categorize it as a scam since it does seem like the Hashflare team tried to put a sincere effort into trying to make cloud mining a success.
How to use Hashflare?
If you intend on starting with Hashflare, then this section is for you. To get started:
First, you need to select the cryptocurrency that you want to mine. Hashflare offers mining contracts in five different cryptocurrencies. They are Bitcoin, Ethereum, Litecoin, Dash and ZCash.
Next, you need to sign the contract and pay for the subscription that you have bought. The more you pay, the higher your stake. You would own more computing power if you pay a higher amount and, hence, would receive larger rewards from the mining process.
Then, you just wait. The mining process takes place and the payouts are carried out. The amount of cryptocurrency you receive is proportionate to the computing power of the combined mining system that you own. Payouts are generally done on a daily basis.
Cloud Mining or Remote Mining
Cloud mining is also referred to as remote mining. As you would have guessed from the nomenclature, remote mining is the process of mining, or in this case, the process of reaping the rewards of mining, from a location far away from the area that houses the computing power.
Cloud mining is the process of mining cryptocurrency using the hardware power remotely. The popularity of Bitcoin and certain other cryptocurrencies meant that mining Bitcoin and cryptocurrencies at home would result in lesser rewards. Users who involved in the mining process would have to set up the hardware and pay large electricity bills to mine the cryptocurrency while the rewards gradually became lesser and lesser.
This led to the birth of remote mining. A remote mining service allows users to stay in the comfort of their homes and reap the benefits of the mining process without having to pay exorbitant amounts on the hardware or electricity bills.
This attractive opportunity lured users into investing in cloud mining. People realized that they can gain the benefits of cryptocurrency mining without having to splurge money on buying equipment.
The other lucrative feature of remote mining is the fact that it needs no technical knowledge. The mining experience of the user is immaterial to the entire process. Anybody could enjoy the benefits.
There are two forms of remote mining:
- Cloud-based mining
- Hosted mining
This model of remote mining is more suitable for users who have a decent amount of mining experience. This model is apt for users who require a high degree of control over the hardware used for mining.
The hardware used for mining in a remote hosted mining scheme is hosted in a remote data center. The users in this scheme assume a great deal of control over the configuration and setup of the mining hardware.
In this model, the user pays maintenance and electricity costs as a fee to the hosting company. The miner receives the hardware from the hosting company and there is shipment risk involved. This also requires a good deal of technical knowledge. The user is generally left with doing some form of configuration.
- Remote hosted mining provides tight control over the mining process
- It also provides the user with a form of ownership of the hardware
- The risks are still considerably high
- The cost of entry in terms of investment is high
- The cost of entry in terms of technical knowledge is also high
This form of remote mining is more accessible to the average person. The miner in this model purchases a part of the computing or mining power of the hosted hardware. Responsibility of this hardware is left to the cloud mining service provider.
The service provider is also responsible for creating mining pools and for obtaining the optimal results from the setup. The configuration and set up of the hardware are also taken up by the cloud mining service provider.
This service gives an instant connection to the mining process. There is no hardware shipment, maintenance fees or electricity bills to pay. It is very much hassle-free. The hindrances, such as noise, heat or space that would otherwise have to be dealt with, are also eliminated.
Perhaps, the best thing about this cloud mining model is that it requires little or no technical knowledge. Anybody could involve in this cloud mining process. All you would have to do to enroll is pay for having a contract and then reap the benefits. There is no need for hardware expertise.
Customers can purchase any amount of computation power they want. The more computation power they buy, the more rewards from the mining process that they receive.
The cost of entry is therefore much lower. No shipment worries. In comparison to the remote hosting model, it is far more lucrative.
- Can purchase as much computation power as the user desires.
- Risks are far lesser
- No electricity bills
- No hardware maintenance fees
- No technical experience needed
- This model can become unprofitable, really, really unprofitable!
Plans on Hashflare
The plans listed on the Hashflare website are:
- Litecoin Cloud Mining
- Bitcoin Cloud Mining
- Ethereum Cloud Mining
- ZCash Cloud Mining
- Dash Cloud Mining
However, the option to buy a contract seems to exist only with the Ethereum Cloud Mining plan, for now.
Let’s move ahead in this hashflare review and see what it promices to it’s users. It promised its users that it would guarantee an instant connection, around the clock monitoring and access and most importantly, daily payouts. The daily payouts certainly enticed users. Hashflare even promised 24/7 uptime and a great interface, which, would be easy for even novices to use.
However, Hashflare could not live up to the expectations that it set for itself. The cloud mining model was just not a great idea.
Hashflare Maintenance Fees
There are five different cryptocurrencies that can be mined through Hashflare. Each of these cryptocurrencies has separate and distinct maintenance fees:
|Cloud Mining||Maintenance Fee|
|Litecoin||0.005 $ / 1 MH/s / 24h|
|Bitcoin||0.0035 $ / 10 GH/s / 24h|
Hashflare contract costs
The different cryptocurrency mining services have different contract costs.
|Litecoin||$1.80 for 1 MH/s|
|Bitcoin||$0.60 for 10 GH/s|
|Ethereum||$1.40 for 100 KH/s|
|ZCash||$1.40 for 1 H/s|
|Dash||$3.20 for 1 MH/s|
It is worth noting that only the Ethereum contracts are in stock at the moment.
More about the unprofitability of cloud mining
The costs for maintaining the hardware for the computationally intensive tasks grew to unexpected levels. It simply no longer made sense to mine cryptocurrency, especially currencies such as Bitcoin.
The costs became so high that it would simply be much easier to buy Bitcoin using actual money through fiat currencies instead of spending on the costs of mining it.
Wrapping up Hashflare Review
Hashflare was initially built with a clear intention of potentially bringing profits to its users. The growth of Bitcoin and other cryptocurrencies led to its initiation. However, the growth of Bitcoin was not sustained. Bitcoin and other cryptocurrencies began to decrease in value and this resulted in Hashflare ending up as unprofitable. It is certainly harsh to say that Hashflare is responsible for the losses incurred by the users. Bitcoin, being the global phenomenon that it became, was expected to rise meteorically, but, failed to show steady growth, which, led to the downfall of Hashflare.
Despite its blatant failure, a large number of users still continue to hold contracts with Hashflare in the hope that the value of Bitcoin and other cryptocurrencies increases once again. Whether their decision to continue with Hashflare gets vindicated or not, is to be seen.
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