[PONZI SCAM] CloudHashing scam

[smoothie]

https://cloudhashing.com/how-we-work

You pay for "mining contracts" so they can "Use our powerful ASIC cloud, we simplify the mining process for you."

Ponzi anyone? lol  

With an indefinite contract, you make a onetime payment and will continually receive payments from your contract while bitcoin mining remains profitable. This will be the case for many years to come as the last bitcoin mined will be in 2140. You can purchase upto 100 contracts at any given time.

With an indefinite contract, we automatically reinvest 30% of contract earnings after maintenance cost into additional computing power for you. This means that as you benefit from additional computing power, your payout also increases. Youn grow with the company.

Contracts are limited in quantity so pre-order now as mining begins in July 2013.

[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

[smoothie]

Go get VC funding and mine until the end of time.

Offering mining contracts in a preorder fashion does not prove you have any actual ASIC hardware. And paying every two weeks? Why not every day like every other mining pool?

Your business model (especially your 6.50 TH/s which never  really varies at all which a normal mining operation would) stinks of SCAM.

Go back to the drawing board and think up something more clever.

Have a nice day.

[coinedBit]

@cloudhasher: could please comment on the feasibility of implementing this idea:

Hi

I only just registered, so I won't have the privileges to speak up in the corresponding threads, but I am referring to:

https://bitcointalk.org/index.php?topic=206637.0
https://bitcointalk.org/index.php?topic=193430.0
https://bitcointalk.org/index.php?topic=173316.0;all
http://www.scamadviser.com/check-website/cloudhashing.com

Like many others, I truly want to believe, but I definitely won't believe until I have seen certain evidence, which would ideally not come from the corresponding website/company itself (because it could be doctored), but from a more credible/independent 3rd party, such as the hardware vendor/supplier (Avalon, BFL etc), who are actually known to have delivered hardware in the past.

Thus, assuming that it is in the best interest of the corresponding "cloud hashing/MaaS" services to communicate their legit intentions to potential customers, could the corresponding services please ask the hardware suppliers to come up with a list of positively-identified orders and deliveries, and publish those on their websites to provide background info on some of the more recent startups ?

Ideally, as a potential customer, I want to be able to cross-check the claims of certain "MaaS-services" (like CloudHashing.com) against actual orders placed with certain vendors, just by going to the avalon/BFL website and checking if there are any confirmed orders/deliveries, including the type of hardware ordered, numbers and budget. Given that the buyers themselves would explicitly ask the vendor to provide that very information and make it available on their website, there should be no privacy issues.

Hopefully, that should address any and all scam-related concerns if the vendors themselves could confirm that certain orders have been placed, paid and delivered - which would in turn also mean tons of additional credibility.

Maybe some more senior community members could review the idea and get in touch with the right people ?


Thanks

[MPOE-PR]

As a company, we at Cloudhashing value most importantly our customer relationships, and with bitcoin being a quickly emerging industry

Ahahaha.

Get lost.

[Rampion]

Ponzi, no doubt.

And the prices are ridiculous: $1,000 per 10GH/s - right, they buy the machines from KnCMiner, which units cost $7,000 per 350GH/s, and they sell them for $35,000... And they have the guts to say the the estimated yearly revenue for 10GH/s is aprox. 50BTC

Yeah, so we are all going to be rich.

Jokers...

SCAM

[cloudhasher]

Ponzi, no doubt.

And the prices are ridiculous: $1,000 per 10GH/s - right, they buy the machines from KnCMiner, which units cost $7,000 per 350GH/s, and they sell them for $35,000... And they have the guts to say the the estimated yearly revenue for 10GH/s is aprox. 50BTC

Yeah, so we are all going to be rich.

Jokers...

SCAM

So quick to jump the gun. Read

https://www.cloudhashing.com/revenue-reinvestment

Our contract holders get additional hashing power monthly. Very hard to so solo mining. Plus no need to worry about hosting etc.

We host in a secure level 3 data centre with reserve power etc.

Happy hashing

[Rampion]

Ponzi, no doubt.

And the prices are ridiculous: $1,000 per 10GH/s - right, they buy the machines from KnCMiner, which units cost $7,000 per 350GH/s, and they sell them for $35,000... And they have the guts to say the the estimated yearly revenue for 10GH/s is aprox. 50BTC

Yeah, so we are all going to be rich.

Jokers...

SCAM

So quick to jump the gun. Read

https://www.cloudhashing.com/revenue-reinvestment

Our contract holders get additional hashing power monthly. Very hard to so solo mining. Plus no need to worry about hosting etc.

We host in a secure level 3 data centre with reserve power etc.

Happy hashing

Prove how investing 30% of an expected yearly revenue of no more than 7/8BTC per each 10GH/s you are going to achieve the 50BTC yearly return you are advertising for the 10GH/s contract.

If your proposal was serious, you would have a business plan with clear steps towards achieving that return. I'm a miner myself, and every serious miner in here knows that it's impossible to get 50BTC from 10GH/s deployed in September. Impossible. And saying you will reach that by re-investing 30% of the profits is RIDICULOUS. You are advertising an impossible return, therefore there is only one plausible option:

As you are selling the units at a huge markup (350GH/s cost $7,000 or less and you are selling them between $52,000 and $35,000), you will pay old investors with new investors money in order to suck more money into your scheme until it collapses. There is no legitimate business that give investors a 500% return in one year, apart from PONZI SCHEMES -> that's what you are going to run.

Anybody believing otherwise is a fool.

[PrintMule]

As a company, we at Cloudhashing value most importantly our customer relationships, and with bitcoin being a quickly emerging industry

Ahahaha.

Get lost.

This

That kind of sweet talk is always a major turn off for me.

[Deprived]

As you are selling the units at a huge markup (350GH/s cost $7,000 or less and you are selling them between $52,000 and $35,000), you will pay old investors with new investors money in order to suck more money into your scheme until it collapses. There is no legitimate business that give investors a 500% return in one year, apart from PONZI SCHEMES -> that's what you are going to run.

Anybody believing otherwise is a fool.

Actually it almost certainly is NOT a ponzi.

Nowhere do they promise to pay out 500% - that's just the fairy-tale projection they make.  They can pay out what they actually promise (output of X hashes) and still pocket a load of cash - no need to be paying from future investments.

Of course their projections are total bullshit - investors will be lucky if they ever even get back what they invested.  But that doesn't actually make it a scam - as that's true of nearly all mining companies (just not to such a great extent).  Where it probably IS a scam is because they give projections which are totally implausible - but try convincing Trading Standards of that if you make a complaint.

Ponzi - No.
Profitable - No.
Scam - Depends on how you define it.  Of course they COULD just run and pay out nothing - but that makes little sense, at least until sales dry up.

[Rampion]

As you are selling the units at a huge markup (350GH/s cost $7,000 or less and you are selling them between $52,000 and $35,000), you will pay old investors with new investors money in order to suck more money into your scheme until it collapses. There is no legitimate business that give investors a 500% return in one year, apart from PONZI SCHEMES -> that's what you are going to run.

Anybody believing otherwise is a fool.

Actually it almost certainly is NOT a ponzi.

Nowhere do they promise to pay out 500% - that's just the fairy-tale projection they make.  They can pay out what they actually promise (output of X hashes) and still pocket a load of cash - no need to be paying from future investments.

Of course their projections are total bullshit - investors will be lucky if they ever even get back what they invested.  But that doesn't actually make it a scam - as that's true of nearly all mining companies (just not to such a great extent).  Where it probably IS a scam is because they give projections which are totally implausible - but try convincing Trading Standards of that if you make a complaint.

Ponzi - No.
Profitable - No.
Scam - Depends on how you define it.  Of course they COULD just run and pay out nothing - but that makes little sense, at least until sales dry up.

Lying on the expected return is a scam in my book. As you said, those projections WON'T HAPPEN, and very likely their "investors" won't even get back the money they put in this venture. So, cloudhashing has two options:

1) run a one time, "hit-and-run" business, cashing in the huge mark-up they have on the hardware (1GH/s costs them aprox. $20 and they are selling it for $149, PLUS the commision of 10%), and screwing up the first investors that will very soon realize they are getting peanuts for their $. In this case new money will stop flowing in as soon as they start hashing and the clueless people who invested start spreading the word that they are receiving much less than they expected.

2) be very greedy and start making payments according to their fairy-tale projection using the huge mark-up they have on the machines, so people start spreading the word that this indeed is a business that gives you 500% return per year, and new investors pour in en masse.

1 or 2 it's not so different for me. From a legal point of view, probably 1) is not considered an outright scam, while 2) is a ponzi, so I agree that they will likely just go for 1). It may not be a *scam* from a legal point of view, but 1) is still a scam in my book, as they are sucking in money with blatantly false assumptions, knowing their customers will probably lose their money, while they win A LOT in any case.

[Deprived]

Lying on the expected return is a scam in my book. As you said, those projections WON'T HAPPEN, and very likely their "investors" won't even get back the money they put in this venture. So, cloudhashing has two options:

1) run a one time, "hit-and-run" business, cashing in the huge mark-up they have on the hardware (1GH/s costs them aprox. $20 and they are selling it for $149, PLUS the commision of 10%), and screwing up the first investors that will very soon realize they are getting peanuts for their $. In this case new money will stop flowing in as soon as they start hashing and the clueless people who invested start spreading the word that they are receiving much less than they expected.

2) be very greedy and start making payments according to their fairy-tale projection using the huge mark-up they have on the machines, so people start spreading the word that this indeed is a business that gives you 500% return per year, and new investors pour in en masse.

1 or 2 it's not so different for me. From a legal point of view, probably 1) is not considered an outright scam, while 2) is a ponzi, so I agree that they will likely just go for 1). It not be a *scam* from a legal point of view, but it's a scam in my book, as they are sucking in money with blatantly false assumptions.

They can't really do 2 - as everyone can work out what they should be paying for the hashing power per contract.  That's why it almost certainly isn't a ponzi - as they won't ever be paying out the 500% to anyone.

Hit and run would be if they took in the money and didn't pay anything.  That's also unlikely in the short-term - as they make more by paying out and continuing to sell more contracts.  Don't underestimate the stupidity of people here - they'll continue reinvesting in crap that will never make a profit even after the proof it won't make a profit has been rubbed in their face by the tiny returns they've actually got.

I'd bet investors on this forum have lost more BTC investing in mining companies than they've lost in all the actual scams put together (including Pirate).  If you run a mining company you don't have to steal - you just skim a big margin off turnover leaving investors with a loss.  Mining is only marginally profitale most of the time - it's impossible for investors to make a profit if the operator takes any sort of significant cut from turnover rather than from profit.  There HAVE been a few exceptions to that - but anything that isn't already mining (or manufacturing chips) isn't one of them at this point in the cycle.

It IS possible that they will make a 'profit' (in USD) for investors if BTC rises a lot.  But that's deceptive and irrelevant for users of this forum (returns need to be compared to just buying and holding BTC - with 0 counter-party exposure to both cloudhashing AND their hardware suppliers).  For those buying in USD it may be more relevant - but is still horrible value compared to buying and holding BTC.

[coinedBit]

Nowhere do they promise to pay out 500% - that's just the fairy-tale projection they make.

That's the nice thing about bitcoin which also makes the community so prone to scamming: you don't need to make legally-binding promises to your customers, instead you can hope for your customers to make their own little calculations based on your "ballpark projections". And the awesome thing is that they're all accepting btc as payment, so that even if there was a trial and authorities would be trying to look under the hood, all the money would be pretty "safe" - unlike bank accounts that can be frozen.

There really is tons of money to be made through scamming with very little risk involved, the whole bitcoin/ASIC wave must be a con artist's wet dream come true, and you don't even risk violating banking guidelines or money-laundering laws, all because bitcoin is so new and still unregulated. You could pull something like this off, without any real dangers involved

[Rampion]

Lying on the expected return is a scam in my book. As you said, those projections WON'T HAPPEN, and very likely their "investors" won't even get back the money they put in this venture. So, cloudhashing has two options:

1) run a one time, "hit-and-run" business, cashing in the huge mark-up they have on the hardware (1GH/s costs them aprox. $20 and they are selling it for $149, PLUS the commision of 10%), and screwing up the first investors that will very soon realize they are getting peanuts for their $. In this case new money will stop flowing in as soon as they start hashing and the clueless people who invested start spreading the word that they are receiving much less than they expected.

2) be very greedy and start making payments according to their fairy-tale projection using the huge mark-up they have on the machines, so people start spreading the word that this indeed is a business that gives you 500% return per year, and new investors pour in en masse.

1 or 2 it's not so different for me. From a legal point of view, probably 1) is not considered an outright scam, while 2) is a ponzi, so I agree that they will likely just go for 1). It not be a *scam* from a legal point of view, but it's a scam in my book, as they are sucking in money with blatantly false assumptions.

They can't really do 2 - as everyone can work out what they should be paying for the hashing power per contract.  That's why it almost certainly isn't a ponzi - as they won't ever be paying out the 500% to anyone.

Hit and run would be if they took in the money and didn't pay anything.  That's also unlikely in the short-term - as they make more by paying out and continuing to sell more contracts.  Don't underestimate the stupidity of people here - they'll continue reinvesting in crap that will never make a profit even after the proof it won't make a profit has been rubbed in their face by the tiny returns they've actually got.

I'd bet investors on this forum have lost more BTC investing in mining companies than they've lost in all the actual scams put together (including Pirate).  If you run a mining company you don't have to steal - you just skim a big margin off turnover leaving investors with a loss.  Mining is only marginally profitale most of the time - it's impossible for investors to make a profit if the operator takes any sort of significant cut from turnover rather than from profit.  There HAVE been a few exceptions to that - but anything that isn't already mining (or manufacturing chips) isn't one of them at this point in the cycle.

It IS possible that they will make a 'profit' (in USD) for investors if BTC rises a lot.  But that's deceptive and irrelevant for users of this forum (returns need to be compared to just buying and holding BTC - with 0 counter-party exposure to both cloudhashing AND their hardware suppliers).  For those buying in USD it may be more relevant - but is still horrible value compared to buying and holding BTC.

Well, I have to say what you wrote was incredibly accurate. You've nailed it, I pretty much agree on everything. But in any case I still think they may be able to run the business like a Ponzi - who is going to check how much hashrate are they really deploying? Are they going to be transparent as ASICminer? They say they are reinvesting 30% of the "profit" EVERY MONTH to increase the hashrate of each customer. But as you said very well, people is so stupid that will probably keep buying mining contracts even if they are unprofitable, so they will not need to do many tricks to suck in suckers. At the end of the day, Bitcoin is a growing ecosystem, with a constant influx of newbies, who will just do not understand that mining is only marginally profitable, and that they would just be much better by buying and holding BTC instead of throwing away money investing in mining companies.