Hashflare: Why sell mining capacities and what is most profitable to invest in the cryptocurrency market
Not so long ago, Forklog published the material “How to replace a thousand and one password with one blockchain”, which told about the work of the Hashcoins team on the Authorizer service. After that, many questions came to the address of the magazine about our readers about the product of Hashcoins – Hashflare cloud mining. Among them were also accusations against the company. To understand the situation and answer all the questions of our readers, Forklog contacted the Hashflare project manager Vitaly Pavlov.
FL: The network is widely believed that companies engaged in cloud mining are very often conducted by business unscrupulous. How just this opinion is?
Vitaly Pavlov: Experience shows that most sites offering cloud mining are not worthy of trust in their customers for various reasons. Often, outwardly, unscrupulous services differ little from good, and it may seem to an inexperienced user that they are all the same and honest. In the case of registration of the user in a bad place that suddenly closes, he receives bitter experience. And this really spoils the reputation of conscientious companies.
FL: In accordance with the rules for using your service, cloud mining services are provided by Hashcoins, not Hashflare. Please explain to our readers how these two companies are interconnected and whether there is generally a legal entity Hashflare.
AT. P.: The answer is simple: Hashflare service is Hashcoins product. We have never founded a company called Hashflare. Buying a contract in the Hashflare service, the client concludes an agreement with Hashcoins. This is spelled out in the rules.
FL: Recently, Forklog mentioned in one of its materials the Authorizer service developed by Hashcoins. On the same day, the user under the nickname Perlover left a commentary on the article in which Kim Kardashian he stated that your company is “crooks that deceived him and other users”. In particular, he claims that Hashcoins specially does not supply mining equipment purchased by users to offer in return the Hashflare services for cloud mining. In addition, Perlover noted that as a result he still received the ordered equipment, but less hash capacity. It is curious that he referred to the English -language Hashcoins thread on Bitcointalk, in which other users wrote that they had not received already paid equipment from the company. How can you comment on these statements?
AT. P.: There was a time when the main business of Hashcoins was a physical supply of equipment. We were dependent on the components suppliers. Unfortunately, some of them failed us at the moment when the number of orders was very large. Difficulties with iron delivery were especially affected, some customers had to send the equipment twice, while independently covering the costs. In addition, due to changes in the market, including the reluctance of a large percentage of users to mess with equipment (delivery, setting), we changed focus to remote mining. At first, it was remote administration of miners, which then grew into cloud mining, allowing any person to enter the world of cryptocurrency mining with minimal cash investments. The main reason for this transition was again the desire of users not to understand issues of setting up miners, but to provide this to professionals. Therefore, we took most of the settings for ourselves.
Returning to users who did not receive ordered equipment, I can say that compensation was proposed either to replace other equipment or a contract in Hashflare. Some even repeatedly. All compensation proposed and subsequently provided, including the mentioned user, are either equal in cost or exceed the cost of initial orders. We have never abandoned our obligations to users and resolved the issues of methods available to us with them. If users still have complaints about us, we are always ready to listen and help, you only need to contact us.
FL: In the Russian -speaking branch on the same Bitcointalk, some users believe that Hashflare is a hype. For example, on January 20 of this year, Airesp wrote the following post: “It looks like a hype, long -playing, paying and giving real profit, but still hype. Until it will not be possible to manually indicate the pool, or to monitor the real power at the other end “. At the same time, already in another message (dated January 26), he noted that he does not add confidence in the project the fact that “the location of the Datacenter is hidden and the equipment with the account cannot be tied”. So, you can not watch serial numbers of miners (for example, in your personal account). Are you ready to provide users with this opportunity? Why they cannot manually indicate the pool?
AT. P.: Part of the answer to the question is contained in the previous answer: customers wanted simplicity. In order to understand this issue even better, you need to understand the difference between remote and cloud mining. I will give an analogy on the example of hosting services. If a person wants to place his site or product on the equipment of another company, he can choose from two options: dedicated servers and virtual (Shared Servers), also called cloud (Cloud Servers).
Hosting on a dedicated server means that the client is remotely entered into the management of a separate server of the service supplier. The client is able to administer the entire car entirely until full control over the operating system. Cloud server, however, this is not a separate physical machine, but a virtual, running on the physical server of the supplier. On one machine used for virtual servers, there may be several from different customers. Naturally, it would be illogical to give full access to one client to the whole car entirely.
As it now becomes clear, in the case of a selected server, the client is available more than the functionality and settings, including the level of the operating system. Hashflare is cloud mining, and the power of machines is distributed between users. Only this allowed us to repeatedly reduce the cost of the minimum contract to try mining for very low investments. Therefore, it is impossible to obtain control over miners of a single user.
We tried to provide the client as many settings as possible in the realities of our system. The most striking example is the choice of pools. Our capacities are divided into existing pools, and the client can choose up to three pools on one algorithm. We try to keep only proven and popular pools. If each client (even with the capacities of multiple of the real power of one miner) wanted to connect to the pool he chosen, we would have to set up separately. I want to note that most customers are very pleased with the options available today.
FL: Is cloud mining really after the second Halving Bitcoin history remains profitable?
AT. P.: Yes indeed. On the site we do not post any data on the percentage of the return of investments, since the cryptocurrency market is too dynamic: today the profitability can be 160% per year, and tomorrow it can fall to 105%, which can certainly confuse the newcomer in the world of cryptocurrencies. But all the information is freely available on the Internet, including online profitability calculators. We always urge people to do their little research before investing any money in mining.
FL: What is the average profitability of investment in your project? How much it has changed after the abundance of remuneration for the Bitcoin block? No specific numbers are given anywhere on the site, respectively, it is not so easy for an investor to make a decision.
AT. P.: As for the average profitability of investment on the current (31.01.2017) The moment, it fell due to the fluctuations in the USD/BTC course in January. I would like to note that this is a common occurrence for the cryptocurrency market, and, as you know, take off behind the fall! So, the last abundance of the award did not so critically affect the average profitability: after a little subsidence, the profitability increased.
So that the reader does not rely only on our statements, I want to give a link to the annual report on mining in Hashflare one of our customers who was not too lazy and shared his results.
It is important to remember that the SHA-256 and Scrypt contracts are not limited by validity. Mining will occur until the income exceeds the cost of maintenance and electricity. By the way, this has never happened, since we are constantly working on increasing efficiency so that mining does not stop. Therefore, even if the payback period changes for the worse, sooner or later the contract will pay off and will only work in a plus.
FL: Probably a beaten question, but still: if mining cryptocurrencies still makes a profit why the owner of the equipment to share it with someone else?
AT.P.: On the one hand, the more people get cryptocurrencies, and at the same time use them, the more this market becomes and its popularity increases. What is natural for us. On the other hand, we, as a company, need to constantly develop. A good example of this is our new projects related not to mining, but cryptocurrency technologies. Naturally, everything needs capital. Cloud mining allows you to make a profit right away, and not wait a few months until the miners start working in a plus.
FL: If we talk about cloud mining as an investment, how much is safer and/or more profitable than other investment options in cryptocurrencies? Why just don’t buy the required amount of coins for the same money and store it in your wallet until the next pampu?
AT. P.: Any investment tool will accompany their risks. If we talk about cryptocurrencies, here we highlight four main areas of investment:
one. In cryptocurrencies, divided into:
- Short -term trade.
- Long -term trade.
- Storage with a dream of Bitcoin for a million after N months/years “.
2. In mining, divided into:
- Acquisition of iron and mining to yourself/hosting.
- Remote mining.
- Cloud mining.
3. In the development of mining equipment.
four. In the development of new products based on cryptocurrencies and their technology – blockchain.
For each of them you can write a small story, but, speaking briefly, the lower the list, the more interesting the direction.
Cryptocurrency trading is almost no different from trading in other assets. Short -term trade and scalping are more risky for an unprepared user than long -term storage. The fluctuation of prices in the cryptocurrency market is often stronger than in the markets of other assets.
Mining also requires some knowledge, however, cloud mining requires the least preparation and removes the responsibility for choosing and ordering the right equipment from a person, delivery (often customs is unfriendly to such equipment, especially in the Russian Federation), as well as configuration).
Investments in the development and production of equipment can bring tremendous profit, since the equipment is constantly being improved. However, it should be noted that in most cases, the size of investments can begin with 6-digit amounts in USD, and not all manufacturers will let the investor “from the side” will let out the investor from the side.
The creation of new services and products on the blockchain over the past two years has acquired a completely unexpected scale. Now the study of technologies and development is carried out even at the state level, as well as financial organizations of various calibers (banks, central banks, credit registers, Consortium R3, SWIFT, NASDAQ and many others). Hashcoins still takes part in the advice of some central banks, states and credit institutions in Europe, and creates pilot projects of various registers.
Many private companies and their alliances raise funds from investors through cryptocurrencies. This method is called ICO (Initial Coin Offering), which is similar to the IPO in the usual financial market value. Anyone can become an investor of the project you like. The collection of investments and the payment of dividends occurs using a smart contract on Ethereum, which greatly increases confidence in this method, albeit cryptocurrency.
By the way, Hashcoins also have a planned project of a fundamentally new financial structure with a distributed database that is interested in attracting capital through ICO. The main idea of the Polybius Bank project is to provide a wide range of financial services familiar to an ordinary person within the same structure with a single database, which is now not represented on the market. However, the innovative idea of this project we consider the distributed Digipass database that we operate on the blockchain technology.
Digipass allows you to safely store and transmit information about both a person and the company, between parts of the Polybius structure and partners connected to Digipass. Such a structure allows you to identify the user once, opening the opportunity to use the services not only Polybius Bank, but also all partners around the world.
We are not limited only to financial services, since Digipass also contains information about health, education, property and much more. The transfer of information is controlled by the user himself, that is, a person decides which institution and what information he wants to provide in order to get the desired service.
FL: What measures do you take to ensure maximum transparency and dispose of suspicions of potential customers? What guarantees do you provide users? Can they abandon your services at any time, but at the same time do not lose invested funds (for example, by selling capacities)?
AT. P.: Our main guarantee is the maximum stability of cryptocurrencies with the power of the acquired contract. That is, we guarantee that the contract will work 24/7 with that hashrate that is indicated on it.
You can refuse the company’s services by selling capacities to another user.
FL: Do you have any restrictions on buying capacities?
AT. P.: We always buy equipment with a margin. Mostly there are no restrictions. If a request is received for the purchase of more capacities than we have, then we personally agree on the time to put the equipment into operation with the client.
FL: Can you justify your prices? How they are formed (if possible on a specific example, say with Ethash)?
AT. P.: On the example of ETHASH contracts, the price per unit hashrate is formed from:
- Prices of components for miners (maternal boards, processors, RAM, video cards, power supplies and other components).
- The cost of renting premises, electricity, Internet connection.
- Arrangement of premises (racks, wiring, cooling, ventilation).
- Salaries of the administrator and maintenance personnel.
FL: How many customers you have today?
AT. P.: At the moment, Hashflare 484395 of registered users and 456932 contracts.
FL: It’s no secret that Hashcoins is registered in Estonia. A fairly unusual choice for state registration of a cryptocurrency project. Why did you choose this jurisdiction? What are the advantages in the country for legal entities whose activities are associated with digital currencies?
AT. P.: We conduct our activities from Estonia, our main office is located in Tallinn, and for this reason the company was originally registered in Estonia. As for the advantages, I can say that in the Estonian Republic there is no income tax for legal entities. Estonia is also considered to be a rather advanced and IT other country in the world. The Estonian cryptocurrency scene is also worthy: there are several companies (exchangers, payment systems, etc.), the cryptocurrency department of the Estonian bank LHV (which developed its wallet on colored coins), as well as the Estonian Cryptocurrency Union (Eesti Krüptorahade Liit).
FL: What you first need to pay attention to the user who wants to rent mining capacities so as not to contact an unfair company? What are the obvious signs of a scam in your industry?
AT. P.: First of all, it is worth paying attention to the percentage of annual yield, which offers cloud mining. With the help of an online mining checkpoint, you can easily make a comparison of services. On the market there were and there are examples of hype services with unrealistically high promises of profitability, which did not interfere at all and does not prevent people from bringing their money there.
The second thing you should pay attention to is the presence of technical support and topics in known cryptocurrency forms: there you can easily see if the service pays how quickly Support, are there any problems, etc.D.
Of course, a big plus will be a certain story for the service: how long it already works, who is behind it? Hashcoins is responsible for all its projects not only to users and regulators, but also to our future, if we want to continue to remain a competent and respectable technological company. In the future, the bar will only increase – the technology is developing, and we together with them.