HashFlare Blocks Small User Withdrawals, Buyers Seek Credit Card Returns

HashFlare holds user funds hostage, through a combination of inefficient mining and a newly increased withdrawal threshold.

Buyers of HashFlare mining contracts are seeing both their funds and the mined crypto coins locked away, while the contracts are in danger of suspension. Even the lower thresholds of withdrawing a minimum of 0.03 BTC caused troubles, holding funds hostage as accounts were on the verge of terminating. 

Cloud mining has long been seen as a borderline scam, due to the fact that the contracts are rarely profitable. Additionally, there are bad actors that attempt to disguise Ponzi schemes as mining contracts, hiding among legitimate cloud mining services. Hashing power on almost all major networks increased dramatically in just a few short months, so the hired hashrates quickly became unprofitable.

https://twitter.com/real_barries/status/1018912586694356992

The reason for the locked funds dates back further - at the beginning of June, so much hashing power was flowing into the Bitcoin network that contracts saw all the mined coins go toward their maintenance fee. This caused Hashflare to suspend some contracts, as they could soon become unprofitable.

Right now, those who bought Hashflare contracts earlier may be in gridlock, unable to withdraw any funds. But one user managed to get a refund, by convincing his credit card provider to assist with taking back the funds:

https://twitter.com/bccponzi/status/1018880788283224065

Ironically, it was a centralized banking payment that saw at least some of the payments refunded.

https://twitter.com/hashflare/status/1006096192302874624

Bitcoin’s hashrate has increased, from 13 EHash/s to more than triple that rate since the start of 2018. After a few current slides in hashing power, the mining of BTC is on the rise again, aiming to recover the 40 EHash/s levels once again. Breakeven prices for BTC for most miners are variable, depending on the time they bought the hardware, and other expenses. Levels at which mining farms are profitable go as low as $4,400, but for others, the level is at around $5,800.

The current mining situation has made critics take note that cloud mining is even more meaningless in 2018, especially for attempting to gain BTC rewards.