Cloud-mining company Hashflare have told users that they have terminated all active bitcoin mining contracts because they are no longer profitable.

In an email sent to users, the company wrote that due to the last few “difficult months” for cryptocurrency markets it has been forced to terminate active SHA-256 mining contracts, explaining that:

For over a month our users encountered a situation when the payouts were lower than the maintenance fees, resulting in zero accruals to the balance. As of 18.07.2018, the payouts were lower than maintenance for 28 consecutive days.

Adding that they have “made every possible effort” to resolve the issue, including potential avenues for lowering maintenance and electricity costs, they have nonetheless been unable to overcome the problem that “BTC mining continues being unprofitable,” but hope that the situation changes soon.

With Hashflare recently raising the threshold for small withdrawals to 0.05 BTC and 0.1 ETH – the announcement might not be surprising to many who have paid close attention to the rapidly rising total bitcoin hashrate and are sceptical of the company’s cloud mining model.

Bitcoin Mining Not What It Used to Be

Mining profitability has moved on substantially from its early heyday where it seemed that almost anyone with a GPU could make a reasonable profit.

With more and more miners getting in on the act, the total bitcoin hashrate (roughly the entire amount of computing power competing to solve new bitcoin blocks) has risen dramatically in 2018 – currently standing at 44.3 EHash/s (or one quintillion – 1,000,000,000,000,000,000 – hashes per second) – as this chart from bitinfocharts shows:

The problem also lies in the fact that while the total hashrate has almost tripled since January – the price of BTC during this period has fallen by more than half its December peak – resulting in a serious drop in profitability:

With bitcoin enjoying somewhat of a mini bull-run earlier this week to break the significant $7,000 level, most of those that continue to mine – even without the additional maintenance costs of cloud-mining contracts – will do so largely with the expectation of a substantial rise in bitcoin prices.