Is Credminer reliable? Be sure to read before investing
A credminer was accused of financial pyramid, the company said it went bankrupt, but intends to pay all of its customers. About 4% did not receive their investments.
O ex president of credminer, Antônio Silva, in an interview for Cointelegraph inside the mining farm said that people need to prove with documents that credminer it's a pyramid. Currently the CEO of credminer is Robert Willian.
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credminer mining company
A credminer has a mining shed, is next to a recycling company, located in a business condominium in Heritage, district of Paraguay.
The company has equipment from Bitmain, most are anti-mining S9, exclusive equipment for bitcoin mining.
You cannot understand how the credminer mining company distributes the value in bitcoin to its customers and the viability of the business.
Because Antonio Silva, ex president of credminer said the company went bankrupt with its old business model. [This information was collected from the interview with Cointelegraph].
What is credminer?
A credminer started in 2016 when little was said about cryptocurrencies and mining. THE credminer mining believed at the time that mining cryptocurrencies was a profitable business, mining machines would pay for themselves in 3 to 4 months.
The Group was managed by MDX Miner, people bought the contracts of credminer for 16 months and became cooperative.
The company provided Hash Power, that Hash Power was the mining power of the machine. They promised that the machines would work 24 hours to generate the profit promised by the company.
Is credminer worth it?
In the year 2017 the bitcoin started to rise and the company started to see profit in the mining processes.
The company had a cooperative club and bought the machines wholesale to mine bitcoin and other cryptocurrencies. That year it was worth investing in mining.
It was feasible mining bitcoin, Credminer said that through contacts with China they brought the equipment to Paraguay and that facilitated operations, the price was low.
How it works credminer?
The business model was simple, the investor bought bitcoin and sent it to the company. Bitcoin value bought HP extension (Hash Power Mining), this is the unit of the company used to share the mining profit.
The company discounted operating costs for 16 months, after which the machine belonged to the company again.
The investment credminer a virtual value was converted into HPM, that value until 2019 could be exchanged for cryptocurrencies from credminer.
For three years people were able to exchange the virtual value for cryptocurrencies and withdraw from external virtual wallets, it worked.
A credminer started mining a new cryptocurrency, LQX. LQX was able to be mined by older machines and the HPM balance was converted to LQX.
LQX could be exchanged for bitcoin or partner products.
The problem is that people started to question the veracity of LQX mining, as it was not listed in the Coinmarketcap .
The company's president said that LQX is a fork Dash and technically could be mined, on any equipment that mined Dash.
LQX has the X11 technology and has good liquidity today and was listed at 3 exchanges currently. However, it was accused of being the currency of the financial pyramid of credminer.
Is Credminer a financial pyramid?
A credminer was accused of being a financial pyramid in 2019, when investor withdrawals did not fall and the percentage of profit was not paid.
The president of the credminer said the problem was due to the closing of the accounts of the partners and investors that gave liquidity to the cryptocurrency of credminer.
The closure of the account of these partners hurt the company. Another reason would be the mining model used by credminer which failed.
The model failed, because the difficulty of mining bitcoin has increased and increases every day. In other words, the business has become unfeasible. The company tried to switch from mining to bitcoin arbitrage, but it didn't work.
Since 2019 Credminer reported that it was experiencing difficulties and that it was not profitable mining bitcoin. The company has thousands of antminer s9 (bitcoin miners) that are unable to mine BTC in the current difficulty.
A credminer closed?
Yes to credminer closed, she no longer accepts registrations. On the company's website it is possible to see the report that since 10/10/2019 they have not accepted new registrations, but promise to mine for those who had already been castrated.
According to recent information from credminer, an S9 machine makes about $ 40 a month. That money is not enough to pay for the company's energy and other operating costs.
It does not pay to mine bitcoin in the current difficulty, the company did not foresee this difficulty in its business model. THE credminer can be compared to Kodak's mining, they have not changed the business model and closed.
It's trustable?
The company stopped paying several investors. When the credminer closed the registrations on the site, about 26.758 thousand people had not recovered the amount invested.
According to the company this is about 10% of the contracts. Currently they say that 4% are unpaid.
The company says it is not a pyramid, but that its business model went wrong. THE credminer it really has a huge mining structure, they invested in the equipment.
The website is still online, they did not do like the other financial pyramids, which closed and removed the website. We cannot say that the company is a pyramid.
Is it a scam?
The press has always compared credminer with companies like Unique Forex, financial pyramids, as the company stopped paying its investors.
A credminer has been investigated by regulatory bodies and the lawsuits have now been closed. They never had a stop order from GVC. However, there are still lawsuits.
Some people have gone to court because they say that credminer promised monthly investment returns. However, the company was unable to pay these earnings due to the infeasibility of cryptocurrency mining.
A credminer if he defends himself and said that he never promised income for the day or month, that would be written in the contract. We don't have access to this contract, so we don't know who this sure.
But there are some testimonials on the internet and a spreadsheet that is supposed to be the company's investment plan.We also saw on some sites that advertised the credminer in Brazil, a profit promise of up to 220% on the initial THS investment.
Spreadsheet credminer
Na Credminer spreadsheet it is possible to observe the company's investment promises. Look:
How much did each THS earn?
Each THS of credminer it yielded $ 75, about 60% of real profit. That way, the profit of the investment in THS would be like this:
- 3 THS: $ 225 and 80% profit
- 10 THS: $ 750 100% profit
- 15 THS: $ 1.125 150% profit
- 25 THS: $ 1.875 200% profit
- 40 THS: $ 3.000 220% profit
credminer worth it?
No, the business model not worth it. Bitcoin mining is not sustainable, large and specialized mining companies are closing. The best alternative today is to invest in bitcoin, that is, buy.
There is a high cost with hardware, equipment becomes obsolete quickly and the difficulty bitcoin increase every day. The mining difficulty is controlled by the mining process, in other words the more they mine the more difficult stay.
The intervals are defined by protocols, the miners have several information over the network of previous blocks and all this is applied in the function hash. The function hash is to find a number pre-defined of networks.
In this way it is as if there were a game with thousands of sides and the mining machine must look within that game for a specific number.
The machine is trying to find that desired number. The more advanced the machine technology and the operational power, the more attempts can be made on the bitcoin block. The miner who finds the number first on the block receives a compensation, the bitcoin.
How to hire cloud mining?
To hire people they needed to buy contracts with Hash Power. About 1, 3, 10, 15, 25 and 40 THS.
The THS is the mining power, the greater the power the more the investor earned. The investor could earn up to 220% with a 40 THS contract according to the Credminer spreadsheet.
Customers without payment
A credminer closed the new registrations in October 2019, after understanding that its business model was no longer profitable. However, it promises to pay the customers it owes.
S9 mining is not profitable in the Paraguay.
The remaining 4% of the credminer promise to be paid, those were the words of Antônio Silva in an interview for Cointelegraph.
According to Antônio, payment could be made using the digital currency LQX, this cryptocurrency can be exchanged at Cointradecz, LQX's quotation is between R $ 0,2 and R $ 0,4.
The payment terms would be on the credminer, the customer after payment could cancel the contract and leave.
Company commits to paying its investors, the company continues to operate for investor contracts, even if bitcoin mining is no longer sustainable.
Conclusion
Investments in bitcoin mining are no longer sustainable, large companies like credminer faced this problem
Trading bitcoin it always involves financial risks, whether mining or operating. It is possible to buy bitcoin on secure platforms, currently this is the best option for investing in bitcoins.
Secure platforms should provide all the support you need to do transactions with less risk.