Summary of HashFlare's Plans for 2018
In late 2017, Bitcoin mining has become very popular. Many tech-savvy people have been buying Bitcoin mining hardware and setting it up in their homes. Other less technical people have been investing their money in cloud mining.
At the time of writing this, the two largest cloud mining companies seem to be HashFlare and Genesis Mining. As Genesis Mining is out of stock on most contracts, HashFlare has seen a massive increase in users. This guide will go through upcoming changes in 2018 for HashFlare, and how they will affect you as a HashFlare user.
This guide is mostly based on information provided by Edgar Bers, HashFlare's 'Support Specialist' (also referred to as their 'Business Development and Relations Manager'), in an interview with JMS Vlogs. We'll go through things raised in this video compared to our own research on things like HashFlare risks and profitability vs competitors. We encourage you to also watch the above video if you have time.
Based on public information available on Edgar, he looks to be a legitimate member of the HashFlare management team:
- Interview with KCN News in July 2016
- Edgar Bers' LinkedIn Profile
- Edgar Bers' Facebook Profile
- Edgar listed on HashFlare's 'Team' page
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HashFlare's Growth in 2017
HashFlare was originally created in 2014 by HashCoins, based around the idea that in certain scenarios renting hashpower to customers is better than trying to ship it to them. e.g. to get the desired hashpower many different suppliers might be needed with varying shipping times. Rather than dealing with these things associated with shipping hardware, instead they developed HashFlare to be more similar to renting a gaming server.
At the time they didn't expect the kind of growth that they've seen. Back in 2014 there was no-where near the interest in Bitcoin/cryptocurrencies as there is in 2017. In 2017 their userbase for HashFlare has growth from around 300k to 1.3M, with more traffic in the 'past couple of months than the previous couple of years'; and their support team has grown from 3 to 10 in 2017.
Remember that HashFlare is just one part of what HashCoins does, their main business is 'developing security solutions for financial markets', which would potentially earn them significantly more than their cloud mining operation. So scaling up support for their mining operation might not have been a priority until HashFlare's recent growth (as the majority of their profits may not have come from HashFlare).
In the interview with JMS Vlogs, Edgar talked about their recent issues with withdrawals. They use Block.io as a 'middleman' between HashFlare and users, where they tell Block.io to send x amount of Bitcoin to each customer. Because of delays on the Bitcoin network Block.io has been having issues sending this money. They have very strong incentives to get withdrawals working ASAP, as agencies use their affiliate program who have employees that need to be paid regularly. But in this case the withdrawn amounts would be more than 0.1 BTC, so initially these larger amounts are a focus, then later on users with smaller withdrawals can be dealt with. Edgar suggested lots of extra tickets are being created, but that HashFlare can't do anything about slow withdrawals - it's an issue any Bitcoin-based transaction will face.
Could HashFlare Shut Down?
To the public HashFlare has grown so fast that many claim it doesn't have the mining capacity to support all the new users it's getting, and that even if it could - there are things like regulation and scaling issues it would encounter.
In the interview with JMS Vlogs Edgar mentioned a number of things related to this. To start he suggested that because HashFlare is based in Estonia, they're unlikely to see any significant overnight regulation changes like you might get in Russia or China. More likely regulations on things like what Bitcoin/Ethereum is will be seen; but that these won't affect HashFlare's ability to operate.
In terms of dealing with scaling issues, Edgar suggested they 'don't allow themselves to disable a service for more than 24 hours' in order to prevent users panicking that HashFlare will shut down/run away with money. Instead they try to plan changes that will take less than 24 hours.
Hardware-wise, Edgar suggested if they ever run out of hardware that they would just stop selling contracts for it (he said they've done this several times in the past). He mentioned two interesting points; one that the recent price change on HashFlare for Bitcoin contracts was because hardware suppliers HashFlare uses are increasing their own prices, due to increased demand for Bitcoin mining and so HashFlare needs to update their pricing to reflect this. Secondly that there are '10x more hardware vendors in the market' for supplying Bitcoin miners than there were a year ago, and that they meet up with these vendors regularly (images of these conferences can be seen on their Instagram). They buy hardware from all vendors to test/compare them, to work out which ones are useless. The more vendors there are, the less they'd be able to increase their prices as they'd have to stay competitive.
Edgar didn't specify how much total hashpower HashFlare has, and instead suggested that they're buying new hardware all the time - and so would never be able to give this figure. Photos can be seen on HashFlare's Twitter with Edgar next to new mining hardware.
Concerns they have on predicting Bitcoin's Price
Edgar also had a lot to say about factors affecting the price of Bitcoin/Ethereum. To start, some Bitcoin related points he mentioned:
- He seemed very concerned about USDT (Tether) in relation to Bitcoin's price; that it's being used to buy as much as $600M worth of Bitcoin, and that it isn't backed by fiat. It may even be used with leverage trades to boost volume on exchanges.
- He mentioned figures like 85% of Bitcoin being owned by less than 0.6% of wallets, and 96% of Bitcoin being owned by less than 1% of wallets.
- He mentioned $40k/$50k psychological Bitcoin price levels will be interesting, that getting past these will be very significant.
He went on to say that he wasn't a fan of Bitmain artificially stimulating Bitcoin Cash price by only allowing it as a payment option for Antminers (e.g. if you wanted to buy an Antminer you'd have to buy Bitcoin Cash first). He compared Bitcoin Cash to Bitcoin Classic (a similar project 2 years earlier), in that the 'more technical' people think Bitcoin Core development will be more stable than Bitcoin Cash. He also suggested Ethereum's price will do very well in the coming months, that it will go well past $1k due to links with the Enterprise Ethereum Alliance.
HashFlare Plans for 2018
Perhaps the most important part of Edgar's interview with JMS Vlogs is where he talked about HashFlare's plans for 2018 - of which there are lots!
- They're planning to move a lot of hardware from China & Germany/Europe to a new data center in Iceland, and plan to make a movie about how they're creating this new data center from scratch, assembling it, etc. They haven't started filming this yet, but hope to start 'this winter' for release in January/February 2018.
- Edgar hinted that there are places outside of China & Iceland that charge less than $0.01/kWh for electricity, and that they may start moving hardware to these locations (he suggested the above Iceland plans were signed before they knew about this).
- They're aware of what people say about transparency/trust, and that they want to make people happy/do their best to show how HashFlare works/operates.
- Edgar welcomed people to organise a visit to their office (see this guide for more information on this).
- They suggested they want to set up a 3D webcam livestreaming a data center, where users can send texts to a screen visible on the webcam to prove it's a real mining facility.
- They're not sure if they want a Christmas/New Year campaign as they're already growing so fast. Also, he didn't suggest they'd offer affiliate codes for HashFlare's checkout process.
- They want to add the option for users to mine either Bitcoin Cash or Bitcoin.
- HashCoins is more focused on creating security solutions for financial markets/data protection/KYC. HashFlare 2.0 in 2018 will be focused on better tooling, e.g. an API for things like buying hashpower through 3rd parties (e.g. buy from multiple cloud mining platforms at once, monitor cloud mining statistics, etc.).
- They disagree with people saying Bitcoin is in a bubble, that it will do well in 2018. With more regulation, cryptocurrency value will be based on technology projects like Ethereum, IOTA, EOS, BitShares - not out of thin air like many coins are now. For this reason coins like Ethereum should continue to grow.
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