Image source: pixabay - geralt
Ponzi Scheme - Investopedia: Fraudulent investing scam promising high rates of returns with little risk to investors. Taking an investors principal and giving out as profits to another investor
Example of a scam: "Refer your friends and get 20% more profit!"
[A mining contract] is a business model for companies to earn cash from you, while you play with the coin market and earn profits by mining. So why allow companies and pay companies to do this? Might as well buy coins directly from the coin market as an investment.
Source: blogger - tysler
It was unexpected but inevitable news to know that Hashflare, one of the largest mining contract companies, has terminated all Bitcoin mining contracts. Talks about refunds are currently refused by Hashflare. I have discouraged everyone from taking up mining contracts since 5 months ago on my blog post: "Investing in Cryptocurrencies" evaluating different ways to invest in cryptocurrencies.
"BTC mining continues being unprofitable, in light of which we would like to inform you that on 18.07.2018 we were forced to start disabling SHA hardware and today, on 20.07.2018, stop the mining service of active SHA-256 contracts in accordance with clause 5.5 of our Terms of Service." Hashflare said.
Source: CCN - Andy Peterson
Unfortunately, we have pro-mining contract fans trying to get referrals by promoting scams of companies. See https://steemit.com/bitcoin/@digitalnews/proof-hashflare-is-not-a-scam-ponzi-is-hashflare-legit
Image source: pixabay - aitoff
Mining contracts are meant to be profitable as mining companies 'rent out' mining equipment so that you get a share of coins. The existence of the middleman is ridiculous. I could have steadily bought coins from an exchange over a period of 2 years rather than paying someone 2 years' worth of 'investment', then get profits back over a 2 year period.
Hashflare's twitter status quickly pushes the blame to the recent "difficult time for the cryptocurrency market" as the cause for their termination. They have chosen not to put the announcement on their website and chose to display cloud mining contracts, however cheekily stating that they were "out of stock". Bravo to their excellent scam tactics.
According to an article on Fortune - David Z. Morris, the company remains adamant stating that "the cancellations are in accordance with its terms of service", but many users are also reporting that the company has placed strict new controls on withdrawals, fueling longstanding allegations that the operation is not above board.
Users of Hashflare's Bitcoin mining contracts have been lashing out at their Facebook page, fuming about early contract terminations and huge sums of money lost. The company even put up additional identity checks before withdrawals just day before the termination, making the entire withdrawal process even harder.
"We are always attentive to existing international standards and regulations and the current update is aimed at ensuring compliance with KYC/AML standards. In order to provide our services we are periodically required to identify users on our platform" -- Hashflare, just days before abruptly terminating Bitcoin contracts.
Source: CCN - Andy Peterson
When a company terminates your contracts and do not state refund, it's gone. Kiss goodbye to your money. Same goes to any beauty or travel package, deposits paid, etc. Always check for credibility, and that proper escrow agencies (companies that hold transactions before full release) are put in place to ensure Ponzi schemes do not occur to your investments.
Image source: pixabay - septimiu
