Cloud Mining with Hashflare: Good, Bad, and Ugly

In the second part of my investigation into cloud mining services, I cover, a service offered by a somewhat mysterious Estonian company called HashCoins. (Read part one about Genesis Mining.)

Hashflare is a bit of an odd ball in the cloud mining world. At first glance, their service can seem very attractive and competitive to other cloud mining offerings. Some of their prices are lower, and they offer Scrypt mining on an open ended basis.

However, things are not quite so simple as that. Before we get into the specifics of how the service works and how much it costs, we need to dig a little into the history and structure of the company.

The Reputation of Hashflare

Hashflare itself comes off as a very secretive organization. They belong to a group called HashCoins, which itself is also cloaked in mystery. They seem to have ties to Russia, with often trying to connect to several .ru domains including (which appears to be a search provider) but say their office address is in Estonia.

They make no mention of where their server farms are and have not made available any photos or videos of their mining operations. We also do not know what hardware they are using to mine or what the size of their operation is.

According to the HashCoins official website, they are a provider of “block chain solutions” but don’t offer much in terms of specifics. They have a section on their page dedicated to hardware, but it is incredibly vague and refers to devices that don’t yet exist but were planned for release in Q1 2017 – already in the past. When I try to search for HashCoins hardware, all I can find is references to reviews from 2014 and 2015 about devices that are no longer being made or commonly sold. claims that the new device they are making is based on a 16nm manufacturing process, but there is no reference to this anywhere else on the entire internet. The fact that they don’t update their website to reflect the fact that this hardware was either canceled or delayed is odd.

They also don’t seem to have produced any mining hardware since 2015. This would imply to me that they are not using their own hardware, but in truth, there is no way to know. If they are selling hardware, they are certainly not being clear about it.


Hashflare Mining Payouts

So how well does the service itself work?

I invested a small amount into Hashflare, about $100 or so worth of Bitcoin to see if it would be worthwhile to invest further into the platform. Bitcoin is the only crypto currency they accept, compared to Genesis Mining which will accept a few altcoins like Litecoin.

At the time of my signup, Genesis Mining was out of stock (and as of this writing, is still out of stock) of any Scrypt hash power, but Hashflare seemed to still be offering it. I signed up for a modest 5 MH/s as a way to dip my toe in the waters.

I’ve been keeping track of the payouts that have been coming in each day in an attempt to see what the payout is per month per megahash. In the beginning, my results were as follows:

Price paid: $13.50 per MH/s, open ended contract with daily maintenance fee

  • Day 1: $2.29 per MHs per month
  • Day 2: $2.41 per MHs per month
  • Day 3: $1.68 per MHs per month (Hashpower increased to 8 MHs)
  • Day 4: $1.73 per MHs per month
  • Day 5: $1.64 per MHs per month
  • Day 6: $1.58 per MHs per month
  • Day 7: $1.27 per MHs per month

I found this incredibly odd that the very same day I upped my hash power, my earnings per hash dropped considerably and never recovered. I admit that this is hardly conclusive, but it’s still disappointing, to say the least.

This downward trend has continued to this day, with each day earning a little less and a little less with no signs of ever moving upward again. At this rate, it would take one year just to reach my ROI or return on investment.

Specifically, I would calculate my potential ROI like this:

Cost: $13.50 x 8 =  $108

$1.28 per MH/s profit * 8 MH/s = $10.24 per month income (assuming flat BTC price)

$10.24 * 12 months = $122.88

Total return = $122.88 – $108 invested =  $14.88 potential profit

End of year 2, assuming no changes at all in payout = ($122.88 * 2 years) – $108 invested = $137.76 potential profit

However, the above calculation assumes that I would continue to receive the day 7 payout for an entire year. My last payout was already below where it was then. If it keeps dropping at this rate, I will never hit my ROI.

In fact, I would likely hit zero income in less than 12 months. The only way I would hit my ROI is if the value of Bitcoin increases enough to cover the shortfall. It’s possible, but it would have made more sense just to buy the Bitcoin outright.

I would also like to note that the payouts, despite it being a Scrypt contract, are all in Bitcoin only and cannot be paid out in any other way. The prices I calculated are done per day, based on the average price of Bitcoin for the day in question.

On the final day of this example, day 7, Bitcoin was priced at $2550, and I received a total payout minus fees of 0.00013 BTC. My last payout was for just 0.0001 BTC, a drop of 24%.

Hashflare Mining Fees

Hashflare has also been accused of having some of the highest fees in the industry.

On day 7 of my experiment, I was charged a maintenance fee of  0.00003124, or a 23% fee. Scrypt mining with competitor HashNest (review coming in part 3) only charges roughly a 5% fee.

While at first HashFlare’s fee may seem lower than on a Genesis open-ended contract, you need to consider the next fee that they charge and don’t readily advertise. In fact, they are so deceptive about this that their about page only vaguely says “commission fees” and does not list the amount.

When you want to withdraw your money, Hashflare charges a punishing, brutal withdrawal commission fee of 0.0006 BTC (over $2.10 at today’s BTC price!), which in my case is a week’s worth of mining profits.

What this does is forces you to leave your balance on their site for long periods in order to not suffer from this massive withdrawal fee. How much of this is network fees and how much of this is their personal profit?

With my extremely modest hash power amount, I can probably only withdraw once per year or risk cutting massively into my earnings. Hashflare does not allow you to receive your payout in the form of a cryptocurrency with a much lower transaction fee like Litecoin or Dogecoin, which could easily solve this problem.

If you compare their fee for sending Bitcoin to that of, which as of today was 0.0001 BTC, you can see that this is among the highest fees one would expect to pay. The only way to avoid this is to not sign up for any contract that is paid in Bitcoin, which includes Scrypt.

If you compare this to Genesis, the amount they cite as your payout is the amount you will receive.

Final Thoughts on Hashflare Mining

Overall I have very mixed feelings about Hashflare.

Some things they do much better than Genesis, other things… it’s too difficult to tell. I would be hesitant to recommend the service or tell people to avoid it.

In the end, you need to do as much research as you can on the costs and fees before you make a decision to sign up for any one provider.

I also highly recommend that if you are interested in joining up, you do a small test run of $100 or less and then calculate how long it would take to achieve your ROI.

The Good

  • Easy to use interface
  • Pays out daily (but only to your hashflare balance)
  • Can buy hashpower in very small increments

The Bad

  • Brutal, exorbitant withdrawal penalty
  • Inconsistent payout amounts
  • Website is often unresponsive and won’t load for hours at a time
  • Company is very secretive, no pictures of their data centers or information about them
  • They completely halt mining during hard forks
  • Scrypt contracts are paid in Bitcoin, which has high transfer fees
  • Ethereum contracts are only one year in duration, but more than half the cost of a comparable Genesis two-year contract

The Ugly

  • Once you pay, your money is gone
  • Massive, agonizingly large Bitcoin withdrawal fee – this needs to be mentioned twice, it’s that bad
  • Very difficult to calculate whether you will end up making your ROI or not, highly dependent on the value of what you are mining to increase

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