Slashdot Mirror
Hashflare, One of the Largest Cloud Bitcoin Mining Companies, Abruptly Disables SHA-256 Mining Contracts, Leaving Customers Furious (twitter.com)
Hashflare, one of the largest bitcoin mining companies, said on Friday it is disabling its SHA-256 hardware and also discontinuing support for mining services on the active SHA-256 contracts. The move comes as Hashflare continues to struggle with generating revenues, the company said, putting the blame on market fluctuations. In an email to active customers, the company added: For over a month our users encountered a situation when the payouts were lower than the maintenance fees, resulting in zero accruals to the balance. As of 18.07.2018, the payouts were lower than maintenance for 28 consecutive days. BTC mining continues being unprofitable, in light of which we would like to inform you that on 18.07.2018 (July 18) we were forced to start disabling SHA hardware and today, on 20.07.2018 (July 20), stop the mining service of active SHA-256 contracts in accordance with clause 5.5 of our Terms of Service, which are required to be accepted when creating a purchase and are the basis of concluding the contract. We expect that the cryptocurrency market situation will stabilize in the nearest future and we will be able to offer our users new advantageous solutions. Customers are understandably furious.
Our pyramid is built, it is no longer in our best interest to take your money. But don't worry, we are scouting the land to start a new pyramid.
The complaining customer are wrong. If fees exceed revenue the miners should be shut down.
Now the mistaken customers may be thinking they are willing to accumulate and hold until prices recover but they need to do some basic arithmetic. If they take the money they would spend on fees and just buy coins on the open market they will end up accumulating and holding *more* coins than if they continued mining. Their risk is the same, their potential payoff of their gamble (holding) larger.
Nothing is stopping them from accumulating and holding. They just seem mistakenly fixated on doing so in the less "productive" manner.
Wait, so "institutional operators" basically control the space now? What happened to that decentralization thing that was supposed to be the entire purpose of bitcoin?
Decentralization ended with ASIC mining hardware displacing CPUs and GPUs. We are far removed from the point in time where ordinary users with ordinary computers were in control. For years control is centralized in *one* particular authoritarian country that is not known for a hands off approach to things. Something around 60-70% (IIRC) of the hash rate occurs in its border and is dependent upon cheap government supplied power. We've also had mining pools approach the 51% attack hazard. Something that was assumed to be "impossible" as the network grows.
The theoretical foundation of Bitcoin no longer matches reality, the risk of blockchain manipulation by government or cartel is now quite plausible.