is cloudhashing.com a scam??

[rupertbg]

Pretty simple - who has seen this website / done business with them / what are people's general thoughts? http://www.cloudhashing.com/

Their physical address seems to be a mail forwarding service with 22,000 other companies in the UK using that address....

[gogxmagog]

If they are legit, it looks like a good business model, fair payouts. they say they begin in june 2013 but if they are using BFL ASICs that date could be a little optimistic. I've heard that if BFL is actually in the final stages of completing the first run of units (which are all earmarked for developers) and about to ship, that the people at the beginning of the queue might get thiers by june, but more likely, most later orders will see units in about 4-6 months time...plus its BFL...so add a few more months on top for good measure.
Also-the company is run by bitcointalk.org member Bitmaniac, who as you can see https://bitcointalk.org/index.php?action=profile;u=35484 is a "newbie" member since july 2011 and has posted 3 times here. that doesn't look too good to me.
I might consider risking it if he had shorter contracts, but I wouldn't want to lose any substantial money if 1) a scam, or 2) BTC crashes and cant recover.
PS also it says on the site that they have sold over 5000 out of a total 6000 shares. there must be a few shareholders around these forums to prove that claim.
PPS the wiki says they plan to run Minrigs. At 30k a pop that's a hefty investment, even if he just runs one. somehow i don't really believe this guy. its too bad because it would be a nice opportunity if it was true and run honestly. but unfortunately my inner voice is also saying;
"If it sounds too good to be true then it probably is"

oh yeah, he also says on the site that the last bitcoin will be minted in 2040. (off by a hundred years)

[🏰 TradeFortress 🏰]

I think the most accurate scam indicator right now is a newbie with single digit posts registered recently posting "Is [blah] a scam?".

And posted in an inappropriate section before being moved, wow.

[gogxmagog]

I think the most accurate scam indicator right now is a newbie with single digit posts registered recently posting "Is [blah] a scam?".

And posted in an inappropriate section before being moved, wow.

mebby...just happens I was looking into cloudhash right before OP posted here. are you a shareholder? or familiar with user BitManiac? Like I was saying... I want to believe...

[gogxmagog]

anyway, give the guy a break for asking an honest question

And posted in an inappropriate section before being moved, wow.

n00bz got nowhere else to post

[🏰 TradeFortress 🏰]

I've talked to cloudhashing and has confirmed the latest BFL order preordered in April. They are a (newly) registered company, Technology IQ LTD in the UK. I think it's actually a pretty legit mining operation, should be easy to take legal action if they do run away. Despite the newness, the operator has done quite a lot of research.

FYI, just because something isn't a scam doesn't mean it is a good investment - you really need to judge that for yourself.

Disclosure: I wrote this post before agreeing to advertise cloudhashing in my sig.

[Deprived]

EDIT:  NOTE IT SEEMS THERE ARE 2 VERY SIMILAR NAMED COMPANIES.  LEAVING MY ORIGINAL POST BELOW BUT AN NO LONGER ASSERTING THIS IS DEFINITELY A SCAM.

I've talked to cloudhashing and has confirmed the latest BFL order preordered in April. They are a (newly) registered company, Technology IQ LTD in the UK. I think it's actually a pretty legit mining operation, should be easy to take legal action if they do run away. Despite the newness, the operator has done quite a lot of research.

FYI, just because something isn't a scam doesn't mean it is a good investment - you really need to judge that for yourself.

Disclosure: I wrote this post before agreeing to advertise cloudhashing in my sig.

It's a scam then.

Technology IQ limited is private limited company registered in 2004.  It's inactive according to Company House - hasn't filed accounts since 2007.  By no means could it be considered a newly registered company.

Technology I.Q. Limited
Company Number: 05090982
Company Type: Private limited with share capital
SIC Code: 5186, Wholesale Of Other Electronic Parts And Equipment

Note that the nature of the business isn't even consistent with what he's claiming.  He's just using the name of an inactive company hoping noone would do any due diligience and would just take his word that was his company.

Took all of 30 seconds to figure that out.  30 seconds it seems most people won't use to verify even basic facts.  It's VERY easy to check details on UK companies.

Looking slightly deeper not only are they inactive they actually dissolved:

Date   Filing Details
14 Apr 2009   Final Dissolution   
30 Dec 2008   First Dissolution (Gazette)

At time of their last accounts (2nd Nov 2007) they had total assets of £96,913 plus total liabilities of £137,227. They were due to pay £137,227 to creditors and were owed back £86,327 from trade debtors. The company's current book value was £-40,314.

So no shock they ended up folding.

There's no newly reigstered company with the same name (don't think you could even create one with same name).

So yeah - Scam.

[🏰 TradeFortress 🏰]

Hmm?

Name & Registered Office:
TECHNOLOGY IQ LTD
145-157 ST JOHN STREET
LONDON
ENGLAND
EC1V 4PW
Company No. 08418155

Status: Active
Date of Incorporation: 25/02/2013

Country of Origin: United Kingdom

I entered the company no on http://wck2.companieshouse.gov.uk//compdetails

Looks like there is two companies in the UK with a VERY similar name.
(I lookup everything that claims to be a company, btw)

[Deprived]

I use DueDil myself - guess the one you found is too new to have got through to their records yet.

Still strange that their website doesn't mention that Ltd company at all - any company with Limited Liability is meant to ensure that it's prominently stated.  It's not allowed in the UK to claim limited liability later if it's not disclosed in advance (though that hasn't stopped Giga trying it - maybe laws are different in the US).

Was any evidence offered to show that company is actually behind it?

[cloudhasher]

Hi,

That can be found in

https://www.cloudhashing.com/contact

I have asked the webmaster also make it available at

https://www.cloudhashing.com/about-us

Kind regards

[Deprived]

Thanks - so we now we know the £15 and 5 minutes were spent to create a Limited company.

Is there any proof that the far more significant sum was spent to buy the hardware?  Presumably there's purchase orders /receipts in the company name which can be produced and verified by BFL.

That plus some explanation of the math and this could be legit.

Though still puzzled why if you already have hardware that will make (by the site'e estimates) a 500%+ profit in the first year you'd want to give away 90% of it in return for a loan you don't need.  It's not like you can now order more ASICs at the same price - or with the same delivery time.

[cloudhasher]

Hi,

Though still puzzled why if you already have hardware that will make (by the site'e estimates) a 500%+ profit in the first year you'd want to give away 90% of it in return for a loan you don't need.  It's not like you can now order more ASICs at the same price - or with the same delivery time.

That's the aim of business, get capital and make the business grow. I aim to get to 50thash by this time next year. So orders for contracts get us there.

That plus some explanation of the math and this could be legit

Easy, use the bitcoin profitability calculator. You will see that we are using an estimated higher difficulty. Yes this is an estimate and any figure we use will be scrutinised as too small or too big. We think our estimates are realistic.

Is there any proof that the far more significant sum was spent to buy the hardware?  Presumably there's purchase orders /receipts in the company name which can be produced and verified by BFL

I provided this to forum members and paid customers. I don't see why I need to show bank statements etc. I have a snippet from bfl below for one of my orders

Your Order #100019552 (placed on March 5, 2013 4:50:53 AM CST)
...Hello,

I am not sure that I responded back to you or not but wanted to let you know that we have received your payment..


I have attached your order information.



Dave
Butterfly Labs, Inc.
Account Manager
913-271-6744

On Tue, Apr 2, 2013 at 4:53 AM, <emmanuel@cloudhashing.com> wrote:


Hi David,
 
Receipt for my payment. Should take 3 working days to reach you
 
Please watch out for it.
 
Kind regards

[cloudhasher]

Thanks - so we now we know the £15 and 5 minutes were spent to create a Limited company.

That is a ridiculous comment. Just because its a newly setup company doesn't mean work and effort has not gone into its inception way before.
Because you can't setup a service doesn't mean you should slate others that try.

It is hard enough to get a reputation online without people who chose not to read through a website blurb all over the internet what they choose not to research - namely company information.

Kind regards and good day

[Deprived]

Thanks - so we now we know the £15 and 5 minutes were spent to create a Limited company.

That is a ridiculous comment. Just because its a newly setup company doesn't mean work and effort has not gone into its inception way before.
Because you can't setup a service doesn't mean you should slate others that try.

It is hard enough to get a reputation online without people who chose not to read through a website blurb all over the internet what they choose not to research - namely company information.

Kind regards and good day

Sorry if you read it wrong.

My comment wasn't meant to imply that was the ONLY work you'd done - clearly from your website you've done a LOT more than that.

But that's the only work that the existence of a Limited Company proves - that was my point.  As some people mistakenly believe that the fact a company actually exists it, of itself, prove of some major commitment - when it's not (in the UK at least - some countries it may be tougher).

I DO like the approach you've taken with contracts (similar route to Gigavps) - it's the sensible way to get around the otherwise thorny issue of having to register as an FSP.

[Deprived]

Easy, use the bitcoin profitability calculator. You will see that we are using an estimated higher difficulty. Yes this is an estimate and any figure we use will be scrutinised as too small or too big. We think our estimates are realistic.

A very glib answer - which totally misses the main issues.

First off, your results CAN'T be duplicated by using the bitcoin profitability calculator - as difficulty isn't the only factor which comes into play, especially for the perpetual contract.

With the perpetual contract a lot of the potential comes from the reinvestment.  But what that deliver isn't ONLY affected by difficulty - but also by the price of additional hash-power.  Without knowing what price you're assuming expanded capability will be able to be bought at there's no way anyone can possibly attempt to validate your projections.  If you're estimating returns of 6 BTC on a 1 BTC investment in first year then with the returns only representing 60% of mining output that means 3 BTC minimum must have been reinvested.  So depending on how you believe expansion will be priced the actual mining power/contract at the end of a year is going to be somewhere within a large range very much higher than the initial power bought.

And on pricing you face a bit of a two-edged sword:

If supply is (as at present) totally unable to meet demand then price for hardware will continue to rise (on the secondary markt if not the primary) and delivery will take a long time - meaning the benefit from extra investment will be a lot less (and a lot later) than a naive model may assume (and I've seen some terrible models where cash available for reinvestment was assumed to automagically instantly turn into active hashing power).

At the other extreme, once supply surpasses demand then mining will return to where it has historically been - with more miners joining rapidly until profits are slim to non-existent.  At which point reinvestment just becomes throwing good money after bad with, as usual for mining companies, yourselves taking your 10% cut from TURNOVER even when no profit is being generated (due to payments to contract owners going out at a rate slightly slower than the assets they own depreciate).

That's why my question about selling it in the first place (if it exists - glad to see you ordered at least something, but it could be 1 Jalapeno for all a quoted email proves).  The returns you've offered MAY be possible on what you've currently ordered - but definitely WON'T be possible on later batches.  Shocking as it may be, there's loads of other people planning to do the same thing - and once you all try doing it, none of you end up with the expected profits.  That's the nature of BTC mining - that it's very briefly NOT the case is an exception caused by a lack of supply during the transition to new technology.

[cloudhasher]

Hi,

Its one thing to question our legitimacy. However, management consultancy or business advice is not what we are requesting. Merely not to be painted in a negative manner.

Warmest regards

[Deprived]

Hi,

Its one thing to question our legitimacy. However, management consultancy or business advice is not what we are requesting. Merely not to be painted in a negative manner.

Warmest regards

Those comments were not so much addressed at you as at potential investors - who should always be wary of any investment claiming likely returns without revealing the basis on which they were estimated.  If you've been around here for a while you'll likely be well aware of how badly people got burned investing in fixed-rate mining bonds (in particular - but mining investments in general) before.

Any credible model has to address issues well beyond just hash-rate - things like projected BTC/USD exchange-rate are critical.  It only needs a badly wrong estimate on one such factor (or totally ignoring its impact) to make an otherwise reasonable projection entirely useless.  As you refuse to explain how you arrived at your suggested returns it's pretty hard for anyone to verify them.

There's also some detail in your contract which could use clarification.  As an example, consider the situation where the price of new hardware makes purchasing it non-profitable.  Do perpetual contracts still invest 30% in expansion even though it won't make a profit?  If not, where does the 30% go?  Does that change if the issue is seen as likely to only be short-term?

Is a 10% management REALLY expected to cover ALL costs?  Even if BFL rigs end up failing after only a year?  Seems hard to see how 10% can cover all costs AND also cover replacement for ALL units when they eventually fail.  Or is that when "perpetual" ends?

Are investors paid on what you actually mine or on PPS?  That's kind of an addendum to the previous point - as if their machine breaks down do they then get zero income from 1 GH/s of non-functioning hardware?

Is the 30% reinvestment done at cost - or at a similar markup to the original investment?  The contract is strangely silent on specifically how the increase in capacity is applied.

What happens if BFL fail to deliver by July?

etc etc

The devil's always in the details - and you've provided very few of those.  Choosing whether to invest or not is about far more than whether something is a scam.  There's also the minor issue of whether it will be profitable.  That's even more critical on an investment like this which appears to offer no exit strategy.

[legendster]

hey guys i found this new site called cloudha...... oh .. you are already talking about it -_-


Anyways, I agree with most of the critics here. So cloudhashing is somewhat similar to Asicminer .. the only difference is that they dont create their own ASIC's ... Biggest loophole in this is the fact that Cloudhashing is relying on (apparently) BFL products, a company who is more interested in winning the beauty pageant contest with their rigs rather than actually deliver them.
I wont blame them, Who would wanna sell a MINT ? right ? hahaha


IF this cloudhashing thing is real I'd like to sell my kidney & invest hopefully if BTC is priced at 1000k by next year I SHOULD get enough money to get a new KIDNEY and then some

But who is gonna tie the knot around the cat's neck ? in other words WHO will verify this company's existence and authenticity ?

[Deprived]

Well the company exists - i.e. is registered.

Whether they actually have orders for the claimed hardware is unknown - seems very likely they ordered something from BFL, but whether 1 Japaeno or 20 mini-rigs is anyone's guess.  Most likely GUESS (and that's all it is) would be that they've ordered some gear are planning to buy rest with funds they raise but are claiming to have ordered all as it sounds better.  Whether they intend to actually pay out is also anyone's guess - exactly same chances as when you send money to anyone else without any track-record or history here.  Some of them are genuine - a lot aren't.  Are the odds good enough to gamble (which is what it is - as there's a significant non-zero chance it's a scam)?  Depends how much you like gambling.

Address seems to be a mail-forwarding address which is never a good sign but not exactly hard evidence of anything wrong.

Will you make a profit if you invest?  Can't verify their figures but IF they have preordered the hardware and IF BFL deliver before too long and IF they aren't scamming then you'd probably make profit if you're in the first bunch of shares.  Later batches (where hardware DEFINITLEY isn't ordere yet) it's highly unlikely the profit will justify the risk until you're sure they're paying out - at which point it's too late anyway.

My recommendation?  If you're serious about investing then require proof they bought ALL the hardware they claim to have ordered BEFORE the date they started taking orders.  If they can't/won't prove it then walk away - there's no reason for them not to prove if they actually ordered.  And if they haven't ordered all but are doing a pre-order thing then they already lied once so zero reason to trust them again.  If, on other hand, they DID order it all then there has to be very good chance they're genuine - which is certainly unlikely to fail to make a profit (whether anywhere near what they estimate depends very much on how early their orders were and just how soon BFL actually ship).

Do also make sure to check WHEN they'd start paying.  Is it as soon as they start mining or is it a few months later after taking the best profits for themselves - from memory there was something on the site that suggested they wouldn't pay anything until July even if the machines arrived tomorrow.  And make sure to get clarification on what happens if BFL don't ship on time, the machines break down etc - if you have a 1 year contract then it ain't much use if you end up not mining at all for some of it (is it 1 calendar year or 1 year of actual mining?)

All these unresolved details are one reason why you should always be very wary of dealing with anyone who posts stuff up and offers only the choice of order/don't order - without any clear mechanism for resolving/clarifying queries BEFORE parting with cash.

[cloudhasher]

Sent you a series of emails as discussed.

Thanks