Bitcoin Global News (BGN)

July 30, 2018 -- ADVFN Crypto NewsWire -- With seemingly widespread hacks and scams across the Blockchain industry including the misuse of mining software and fraudulent activities in cloud mining, what service can we trust?

At first glance, the prospect of cloud mining for Crypto may seem tantalizing.

You don’t need specialized hardware and you don’t need to pay a gigantic electricity bill, even though you do need to put your trust in the legitimacy of a firm that, for the most part, you will never be able to verify the existence of, in person. Hashflare, which has been of the biggest cloud mining providers that has apparently proved itself as a trusted service over time, began to shut down all Bitcoin services just recently.

This is a striking action because first, according to Coindesk and Hashflare, it was due to the cost of mining outweighing the overall average profits over a period of about 21 days. Secondly, while it is easier to join a cloud mining service, again you cannot see what is going on inside the company or really, how they actually physically do their business, at all.

Hashflare can claim that this is why they shut down their Bitcoin services but it could be something else entirely. Regardless of what the truth is, the fact remains that Hashflare was, for quite some time, what some might have considered to be the key example of how to succeed in cloud mining. Even with the rampant volatility of the Crypto market since the start of 2018, leaders like Hashflare had been succeeding, at least by outward appearances. As of now, since they have failed, the future of the niche could possibly be more in doubt than it was before.

What seems to give more credence to this is that with the price being the essentially the lowest that has been in the last year, the same report by CoinJournal indicated that the mining space has continued to grow.

With Hashflare’s failure also comes the possibility that users will shy away from cloud mining platforms not only due to it being hard to see them as legitimate, but also because if what Hashflare says is true, profits are sharply falling throughout the space.


The central question then becomes: how do cloud mining firms and their users effectively respond to this?

The easy answer is that the services of these companies need to be altered to promote more trust. The hardest part about this is, of course, how.  As Coindesk suggests, such companies, including Hashflare, could begin by trying to differentiate themselves in a new way to address the rise in competition.

If new features can successfully show would-be cloud miners that some companies are better than others, then certain competitors will survive the storm, while others will not.

 

 

By: BGN Editorial Staff





 

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