Thoughts on Cloud Hashing
According to their frontpage of their website they claim that their business is
”The Easiest Way to Earn Bitcoins”
On cloudhashing.com their website homepage their bio states they were founded in February 2013 to take out all the complexities of Mining Bitcoin. Cloudhashing claims they maintain great relationships with manufacturers that allow them to deliver the best pricing and highest potential returns for customers.
They tout the benefits of their service and explain briefly the outline of their business model on their homepage. At Cloud Hashing they claim to make the process of mining for bitcoins simple, scalable and cost effective for their clients by building a formidable cloud supercomputing network of mining machines, utilizing the latest in ASIC (Application Specific Integrated Circuit) mining technology.
It sounds good how they describe their business, and it’s a solid concept. You send cloudhashing money and they turn it into more money for you. It’s business model is to use the money sent by customers, pool it all together to purchase bitcoin miners on a large scale, then mine bitcoins on behalf of customers and sending back the extracted coins gradually over a period of time depending on the contract. Generally we’re talking over the course of a year. Just as it sounds, it’s a mining contract. Great concept.
While I have not personally bought any mining contracts from them so I don’t write this from a firsthand account, I believe the writing is on the wall. They probably pay you fractions of bitcoins coming from other investors money not from their claimed excellent mining capabilities due to “Economies of Scale” which they claim to receive from better pricing on their hardware, data centers, and power.
Bottom line: Cloudhashing.com is a cloud mining definite scam
Look elsewhere as a better place to invest your money. I believe if you purchase mining contracts from cloud hashing they will turn the money you send them into less money than what was sent over a long period of time. I think it could be anywhere between a poor deal for customers at best, and a straight up ponzi at worst. Probably similar to investing with Bernie Madoff. If you’re looking for a efficient way to accumulate a Bitcoin stockpile I would in my humble opinion avoid this service and look elsewhere for a better method. Butterfly Labs made news headlines recently as being under investigation for fraudulent practices. It’s easy to cover situations after the fact, and all information surfaces. But I’m laying out the prediction beforehand that at some point there will be confirmation that Cloudhashing are crypto coin crooks. In the meantime the takeaway from this is if you’re looking for a method of accumulating bit coins I would suggest to look elsewhere as you’ll be sending your money into a blackhole if you become a customer of cloudhashing.com.
Update 12/26/2015: Cloudhashing.com is gone, no evidence it ever existed.