Back in 2017 during the great bull market run my brother, who at that time was way more involved in cryptocurrency and blockchain than me, talked me into trying out cloud mining. At the time I did not know a lot about cryptocurrency as was only involved in the stock market, so I followed his advice. He and I both signed up and I bought $350 worth of mining hashrate from the cloud mining service Hashflare.

Hashflare was set up the best of the ones my brother had shown me and their math did line up to what you would get when you crunched the numbers of difficulty, power cost, maintenance, etc. so it was at face value a good investment I thought. What is really crazy looking back into it was that Hashflare actually had an insanely high minimum amount of Bitcoin you had to have “mined” before you could withdraw. To withdraw from Hashflare you had to have 0.05 BTC in your “mined” account. After some outrage as they were unable to keep up the mining payouts due to the bull run screaming ahead, they did lower the amount you needed to withdraw to 0.01 BTC.

When you purchased your hashrate from Hashflare you were bought the rights to that amount of hash for a year. The contract though would be suspended if the power was not enough to be profitable for 2 weeks and the contract would be terminated if after 60 days you were still unprofitable. Based on what I have been able to see from my account and thinking back to this time I am pretty sure that I was able to “mine” for roughly 7 months, and they actually sped up canceling contracts during that time unless you bought more hashrate to make eventually put yourself back into the green again, also called being profitable.

What was even crazier is that initially this Cloud Mining platform did work and worked really well.  If I had been smart and held onto what I had initially received from mining I would be extremely happy with my return on investment or ROI. Even when I look at what I had spent, $350, and received, 0.0286 BTC, when I sold it I was able to recoup approximately $150. If anyone made off great it was my brother as I sent him 0.011 BTC which was only worth $41 at the time… doing the quick math at today's price I sent him $165 worth of Bitcoin!

Today the BTC I had mined would be worth $429 with BTC at $15,000. I however bailed out and only was able to recoup about $150 for myself and sent my brother the then worth $41 worth of BTC. The ROI after what would now be ~3 years would be 22% or $79 on the $350 investment. Not only that but the mining contract was only active for 7 months and not the 12 I had purchased! This means that if  Hashflare had lowered their maintenance costs, which they did not do thus voiding a ton of contacts I possibly could have eclipsed the 0.03 BTC mark if not even higher.

Of course this is all looking back and seeing the market not only fall all the way from $20,000 to $4,000 but holding onto everything as this collapse took place which I am not sure I would have done. It is an interesting thing though to think about and see how this could have really ended up a lot differently!

This experience though and more I read just showed me how lucky I was to get in as early as I did because some who did not lose thousands of dollars because the mining went unprofitable and Hashflare just canceled their contract with no ability to recoup anything. This is something I could never recommend anyone doing. Cloud mining on top of being full of scams is also just a beast in you never seeing anything in the company. You never see the equipment or if they mined and scrapped some of the BTC off the top.

Cloud mining is a really good way to gamble and lose your money. Out of all of the different crypto options I have seen this is the worst one to choose. Joining different mining pools is different just due to the legacy factor behind them. The ones that are frauds and fake are gone however with cloud mining I still run across fake companies only to see them disappear as fast as they appeared in the first place.

I hope you enjoyed this post. If you have not checked out all of the Earn options on Coinbase Earn I highly recommend it as they have $177+ in crypto you can earn! I have my referral links below and would really appreciate it if you would use them thank you!

Compound

EOS

Stellar Lumens 

Orchid