is cloudhashing.com a scam??

[jml]

I have corresponded via email with Emmanuel from cloudhashing.com.

I have learned that they have a couple of the Butterfly Labs machines on order. Emmanuel also told me that they are in communication with the BFL people and that he expects the BFL machines to be delivered soon.

I have two smaller BFL machines on order and part of the reason I wanted to correspond with them is I figure that if they bought a couple of US$30,000 machines, they would know more about BFL delivery dates than anyone.

My intuition is that the cloudhashing folk are NOT scammers. Yes, they are charging twice as much per GigaHash as you would pay if you bought a BFL machine on your own. On the other hand, they will maintain the machines. If BFL delivers my machine and a few months down the road I have a problem with my mining rig, I am sort of SOL.

I was trained as a scientist in grad school. That means, I wait for evidence before I make some accusation. There is no reason to believe that Cloudhasing is a scam. They might not get their mining rigs delivered, but that doesn't mean they are a scam. Emmanuel assured me that if they do not get delivered, all contract purchases will be refunded.

I do not have any financial interest in Cloudhashing, and have not yet bought any contracts. I just responded because it bothers me when people make accusations that are unsubstantiated.  State your beliefs, but if you are going to make a statement that is accusatory, please provide evidence.

What is the best predictor of future behaviour? Analyse the person's past and present behaviours. I'll explain.

BFL have a terrible shipping track records and you should take this fact into account because it is fact and there is no denying it. I ordered in late February and cancelled in April because orders where supposedly shipping by January when I looking up their website. What happened? They got further delayed! This pattern was observable since 2012 and this is not recent phenomena. They have been accepting pre-order monies since summer 2012 (many claim they lost their money due to the "no refund policy" especially if paying in bitcoins as sales are final) and delaying month after month causing an angry bitcoin community which I can understand their anger and frustration.

https://bitcointalk.org/index.php?topic=114329.0
https://bitcointalk.org/index.php?topic=136392

You should also take into account the past and present evidence and data available (there are accusations with no evidence and are not true but some accusations do come with proof in the form of images and videos so please view the latter address I have posted ref Bryan Micon) that exist so that you can make an informed decision of where you want to invest.

An analogy to what is happening that if you were to write a systems paper with half baked solutions, your paper won't even be accepted in conferences (unless its a 6 page systems workshop paper or a work-in-progress paper); you must describe a problem, describe a solution, and provide data to back up your claims. What is happening in the bitcoin community is that there are people who write papers that have describe a problem, have no data or a demonstrable test bed and describe half baked solutions.

I will not say that BFL is neither real or a scam until I see a fully working product. Due to that I am basing judgement on my previous experience with BFL, I will not pre-order anything from any company until I see a proof of concept that is demonstrable.

Unfortunately there have been a long string of scammers over time and I believe that if companies want to make a good impression, the least that they can do is showing to the bitcoin community that their idea works and is demonstrable.

[stenkross]

They have sold 5249/6000 contracts.
That means at least 53 people have invested in this (maximum 100 contracts / person), but probably the number of investors are a lot higher.

Assuming those numbers are real, would not at least one of the investors say something in this thread?
If I were to invest money into something, and that company is accused of being a scam, I would try to be a part of that discussion, at least saying: "I invested in this company because the seem legit to me because of xxx and yyy".

<speculation>
Another possibility is that 5249 is a fake number, to give the sense of
"omg, > 80% of the contracts has been sold already, I better hurry up and buy".
</speculation>

[cloudhasher]

<speculation>
Another possibility is that 5249 is a fake number, to give the sense of
"omg, > 80% of the contracts has been sold already, I better hurry up and buy".
</speculation>

Hi,

Not all contracts have been sold online. Some were actually sold to piers and organisations we had done business with previously. Also contract prices were lower at the advent but as prices rose, we had to look to raise our prices also even though we already had a paid for pre order as subsequent orders to BFL will be more expensive.

We are doing well with our online sales given the current dip in BTC price.

I provide proof of purchase, you will say its doctored,  I think anything I provide will have the same comment from this group. Best we wait for BFL delivery before commenting further.

Kind regards

[Gator-hex]

Proves nothing because you're hiding the delivery name and address so the assets many not even belong to the LTD company but directly to Emmanuel Abiodun.

Not true. Out terms and conditions actually specify that for indefinite contract holders, the device belongs to the contract holders (our clients). We merely charge a maintenance fee. These are handled by the legal terms not a PO.

I handle the orders so specify my name as a contact.

A LTD Company is a legal person so all orders should be in a bold type name like "COMPANY NAME LTD" or you're breaking the law.
A LTD Company cannot offer to sell it's shares to the public, or your breaking the law.
For a LTD to sell financial contracts, issue e-money or shares of anything, you need to register with http://www.fca.org.uk or you're breaking the law.

Even MtGox cannot get a bank account in the UK. They take regulations seriously here.

[dg2010]

Unfortunately Avalon's solution is not workable as the power requirements is sky high to be scalable. We will continue to monitor the market for such opportunities.

Pretty sure that the BFL equipment will use 2-3 times as much power as they initially suggested. That's if it turns up.

A LTD Company cannot offer to sell it's shares to the public, or your breaking the law.
For a LTD to sell financial contracts, issue e-money or shares of anything, you need to register with http://www.fca.org.uk or you're breaking the law.

Even MtGox cannot get a bank account in the UK. They take regulations seriously here.

This is mostly semantics, so it comes down to wording. They are obviously not selling financial instruments, shares, vouchers or e-money.

All they have to do is properly word their material so that they are selling "Compute Power" or similar and all of your arguments go away.

The comment regarding the BFL being owned by their shareholders.... well they are gonna have to be very careful how they word that because clearly the buyers of these "shares" are not.

In my opinion the wording used by the site and the poster on here is terrible which is the clearest indicator that these guys haven't thought this through properly.

There is no way that they have sold 5500 slices of the pie, that in my opinion is a big red flag to me. I do not believe the whole offline bullshit. This is the largest and really only bitcoin forum going, if they sold that many slices we would have enough people reporting about it by now.

My opinion, they are £60k down and are trying to hedge their losses and are doing so in a terrible way.

[jml]

Proves nothing because you're hiding the delivery name and address so the assets many not even belong to the LTD company but directly to Emmanuel Abiodun.

Not true. Out terms and conditions actually specify that for indefinite contract holders, the device belongs to the contract holders (our clients). We merely charge a maintenance fee. These are handled by the legal terms not a PO.

I handle the orders so specify my name as a contact.

A LTD Company is a legal person so all orders should be in a bold type name like "COMPANY NAME LTD" or you're breaking the law.
A LTD Company cannot offer to sell it's shares to the public, or your breaking the law.
For a LTD to sell financial contracts, issue e-money or shares of anything, you need to register with http://www.fca.org.uk or you're breaking the law.

Even MtGox cannot get a bank account in the UK. They take regulations seriously here.

That is true about MtGox, they used to have a Barclays account but then it was closed off and now transfers need to go through their polish bank.

[cloudhasher]

Please review our status here

https://bitcointalk.org/index.php?topic=176262.0

We have been checked out and cleared.

[boonies4u]

cloudhasher, I would like to clarify something...

The "Hero Member" title is not a title bestowed upon someone for their acts or deeds. It is merely a title given to you when you reach a certain post count. (crossposted to other thread)

[cloudhasher]

Yes I am aware of that :-)

[CoinHoarder]

cloudhasher, I would like to clarify something...

The "Hero Member" title is not a title bestowed upon someone for their acts or deeds. It is merely a title given to you when you reach a certain post count. (crossposted to other thread)

Actually.. I got my "Hero Member" status after saving 2 babies and a kitten from a burning building.

[joae1975]

So I bought a couple contracts today.  And I have a couple problems already.

1.)  I can't log into my account.  There is no place to even log in.  So I don't even have an account.  It's like you buy it and wait and see. 

2.)  The contract count did not go up after I bought. I bought 3 contracts, it stayed at 5412/6000.  Even after they were confirmed.  Maybe it updates later.

3.)  Once all the contracts are sold, no more can be bought by new customers.  Only existing customers can buy the old contracts.  So eventually all the customers will be dead, what then?  And they could be down to one customer some day.  It's like John Maynard Keynes said, "In the long run, we're all dead."

4.)  I asked customer service about my id and password, they replied, "Someone will contact you shortly."  How long is shortly because that was over an hour ago?  Granted it is Sunday. 

5.)  A few typos on their website.  Punctuations, spaces, commas, and such.  Should be spotless.

Anyway, these are my objections.  But I still bought.  I understand growing pains are expected.

[jml]

So I bought a couple contracts today.  And I have a couple problems already.

1.)  I can't log into my account.  There is no place to even log in.  So I don't even have an account.  It's like you buy it and wait and see. 

2.)  The contract count did not go up after I bought. I bought 3 contracts, it stayed at 5412/6000.  Even after they were confirmed.  Maybe it updates later.

3.)  Once all the contracts are sold, no more can be bought by new customers.  Only existing customers can buy the old contracts.  So eventually all the customers will be dead, what then?  And they could be down to one customer some day.  It's like John Maynard Keynes said, "In the long run, we're all dead."

4.)  I asked customer service about my id and password, they replied, "Someone will contact you shortly."  How long is shortly because that was over an hour ago?  Granted it is Sunday. 

5.)  A few typos on their website.  Punctuations, spaces, commas, and such.  Should be spotless.

Anyway, these are my objections.  But I still bought.  I understand growing pains are expected.

With the current power requirements of the Jalapeno, you can draw  a linear function graph (in the form of (ax + b = c) to predict how much a minirig would use. If you average the jalap at around 40W/h consumption (varies from 30W to 50W), the minirig would need about 10MW or 10000W of power. If you have 6 minirigs like what cloudhashing has purchased, you would basically need a nuclear reactor which produces on average of approx 800MW to 1100MW of power which is unrealistic to power up the minirigs! BFL have missed their power consumption goals by 666.67%.
But then I leave it to BFL to produce something as it is still not May... which is in 3 days

[MPOE-PR]

Anyway, these are my objections.  But I still bought.  I understand growing pains are expected.

You're pretty much the problem with Bitcoin. Noobs are expected to do stupid shit because they are noobs, which practically means stupid. But to do something you know is stupid INTENTIONALLY...sigh.

Please read Personal responsiblity and the Ponzi scam and review your community-damaging behavior. You are bad for Bitcoin, leaving alone how bad you are for yourself.

[afrustrum]

...
 If you average the jalap at around 40W/h consumption (varies from 30W to 50W), the minirig would need about 10MW or 10000W of power. If you have 6 minirigs like what cloudhashing has purchased, you would basically need a nuclear reactor which produces on average of approx 800MW to 1100MW of power which is unrealistic to power up the minirigs! BFL have missed their power consumption goals by 666.67%.
...

I think you meant 100 KW not 10 MW (=approx 30W *1500GH/5GH). Six minirigs would therefore need 600 KW, which is still high. I read that ordinary racks use up to 2.4 kW each, but I guess 600 kW is within the capabilities of a specialist hosting centre. No nuclear power plant needed.

[joae1975]

Anyway, these are my objections.  But I still bought.  I understand growing pains are expected.

You're pretty much the problem with Bitcoin. Noobs are expected to do stupid shit because they are noobs, which practically means stupid. But to do something you know is stupid INTENTIONALLY...sigh.

Please read Personal responsiblity and the Ponzi scam and review your community-damaging behavior. You are bad for Bitcoin, leaving alone how bad you are for yourself.

Im taking a calculated risk. Something people do all the time in free societies.  You can't win if you don't play.  Has nothing to do with being a noob.  Some people thrive on noob bashing.  How do you know I'm a noob,  just because I don't post a lot?   Please don't answer that. This thread is not for this discussion.

I've done my due diligence, my research.  It's premature to call this a ponzi scheme.  But the fact that they will only take 6000 contracts and no new customers is good in that respect.  Only existing customers can buy expired contracts.

[cloudhasher]

Anyway, these are my objections.  But I still bought.  I understand growing pains are expected.

You're pretty much the problem with Bitcoin. Noobs are expected to do stupid shit because they are noobs, which practically means stupid. But to do something you know is stupid INTENTIONALLY...sigh.

Please read Personal responsiblity and the Ponzi scam and review your community-damaging behavior. You are bad for Bitcoin, leaving alone how bad you are for yourself.

Im taking a calculated risk. Something people do all the time in free societies.  You can't win if you don't play.  Has nothing to do with being a noob.  Some people thrive on noob bashing.  How do you know I'm a noob,  just because I don't post a lot?   Please don't answer that. This thread is not for this discussion.

I've done my due diligence, my research.  It's premature to call this a ponzi scheme.  But the fact that they will only take 6000 contracts and no new customers is good in that respect.  Only existing customers can buy expired contracts.

Who died and made these guys kings? The walk around making accusations with NO evidence whatsoever. The sad thing is people listen to them because they have spent more time living on this forum than living real lives.

Anyways Joe - we have recently added 2 Terahashes of Avalon chips to our arsenal. We are literally one of the first 10 orders by using TerraHash.com. This means your July contract could possibly start in June.

Its what we do time after time, put our money where our mouth is.

Kind regards

[gill83]

A person named Emmanuel Abiodun (also the name of the owner of CloudHashing) was convicted of wire fraud, credit card fraud and identity theft. Sources:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRl_taI8X3UY and http://caselaw.findlaw.com/us-2nd-circuit/1470251.html

A person by the same name has been trying his hand at Nigerian 419 scams. One source: http://www.419scam.org/emails/2010-06/10/01093583.1.htm. You can find more by Googling.

Now I am not saying these are the same people, but use your head.

[cloudhasher]

A person named Emmanuel Abiodun (also the name of the owner of CloudHashing) was convicted of wire fraud, credit card fraud and identity theft. Sources:
http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aRl_taI8X3UY and http://caselaw.findlaw.com/us-2nd-circuit/1470251.html

A person by the same name has been trying his hand at Nigerian 419 scams. One source: http://www.419scam.org/emails/2010-06/10/01093583.1.htm. You can find more by Googling.

Now I am not saying these are the same people, but use your head.

I am British and live in London.

Did you actually read that article or just couldn't wait to spread filth and conjecture?

[m1bxd]

Hi all,

I for better or for worse I gave "Emmanuel" the benefit of the doubt having gone through this thread early this morning. Much of which I found completely mean spirited. This place is sometimes just like a cross between IRC and Newsgroups of 1993 on a good day.

I posted some feedback at the end via the contact form about login details received and lack of account URL.

He came back quickly and I left my phone number. He called me back and we had an interesting chat, which I recorded with his permission.

The crux of our conversation relevant to this forum ran as follows:

The counter is updated - every 12- 48 hours, to allow for refunds.
2% of people ask for their money back. He didn't want people to see the counter roll back - Christ that would cause even more questions here!

Nigeria he were he is from, but on the phone I can assure you he sounds extremely English and is based in London.

Here is the telephone conversation
https://dl.dropboxusercontent.com/u/1745534/cloudhosting/call_09-06-55_IN_XXXXXXXXXXXX.AMR

I am sorry about the poor normalisation of the recording - but it's raw and uncut. Cynics pick away, it's just a record of the conversation we had.

Emmanuel Abiodun - yes, well when I asked him about this, it's very common name in Nigeria apparently. A bit like John Smith in the UK or the much maligned Jon Doe of the United States.

With regards to equipment and deliverables, fast forward to about 25 minutes into our conversation:
I'm paraphrasing the gist of it: The contracts he is offering on his site is for hardware he already has.

So if you want to lay into him and his company a bit more, go ahead but perhaps with the courtesy of listening to the first 30 minutes of our chat recorded on the 27th May linked above. 30 minutes onwards is mainly us rabbiting on. (I don't suggest you bother wasting you life listening any further)

I've decided haven't got a cat in hell's chance of editing it. So here it is linked in this posting.

Cheers Mark

[cloudhasher]

As a company, we at Cloudhashing value most importantly our customer relationships, and with bitcoin being a quickly emerging industry, we recognize the importance of verifying legitimacy and reputation. Like all new businesses, there is an ongoing effort to build solid customer and business relationships, and we appreciate those who extend us their trust, but fully understand those who are cautious or concerned, and we hope that we can over time gain their trust.

We have provided in numerous cases copies of receipts of purchase of equipment, and we have broadened our Vendor base to include multiple suppliers of equipment to ensure that we can meet the growing demand of our customers and to buffer the variety of lead times that our Vendors are up against. We believe our model offers fair payouts to our contract subscription customers and we have been forthright and clear with all parties inquiring about services purchased and when they go into effect.

Below (at the bottom of this message) are a few examples of our legitimacy, that we hope will help some of you better understand us and our willingness to be as transparent as possible.

We are confident in our service model and infrastructure, and believe in the bitcoin movement wholeheartedly as a both business and individuals.  We will continue to uphold our commitments to being responsive and communicate with integrity.  As we learn more of the market conditions that we are all subject to with regards to hardware delivery challenges, we will share them, along with the victories of services starting.

We are happy to and will continue to provide proof of our commitment customer support, communication and reliability. Feel free to direct any questions directly to us, via the contact us section of our website http://www.cloudhashing.com/

Examples as follows:

Third Party News Article on Cloudhashing Services http://www.coindesk.com/bitcoin-maas-mining-as-a-service-coming-soon/

Cloudhashing Company Newsletter: http://tinyurl.com/cloudhashing

Proof of one of several ASIC Purchases: https://i.imgur.com/wUtMl8P.jpg

Legitimacy Verified on BitCoinTalk: https://bitcointalk.org/index.php?topic=176262.0
Search for: Shared Mining Services

Phone Recording of Customer and Cloudhashing: http://tinyurl.com/cloudhashing-phonecall