They are actually allowed to delete your contract if it has been unprofitable from a maintenance perspective for more than 20 days straight.
From their contracts, 4.b Terms:
"The Service Provider may terminate this Agreement with immediate effect if the Coins generated in the preceding 20 days do not suffice to pay the Fee under 2.b above."
This is a huge deal! A lot of people don't realize that with exponentially rising mining difficulty and a constant maintenance fee, your contract will sooner or later expire provided the BTC price doesn't go to the moon (lifetime contracts...
yeah, right). And if it did, most of these cloud mining companies would probably go bust.
Think about it, all it takes is a 20 day exchange rate dive and your whole investment is gone. Doesn't matter if the price goes up again shortly after. *Poof*. Gone. Buh-bye. As it is right now, a dive below 300 EUR/BTC for 20 days would suffice for a lot of contracts to disappear. And that cut-off is rising every day due to the rising difficulty. It could be 600 EUR/BTC in a couple of months. Are you certain the bitcoin price will stay above 600 EUR consistently for the next few years? I'm not.
And Genesis Mining isn't the only company practicing this method. Here's a gem from Hashflare's ToS:
"5.5. The Mining process continues until said mining is profitable. This means the Mining process will stop if the Maintenance and Electricity Fees will become larger than the Payout. Permanent Service termination (Hashrate type specific) if mining remains unprofitable for 21 days."
Which begs the question: Why are those contracts terminated (so quickly)? The hardware is still there (provided it ever existed) - so why not give it at least a couple of months before throwing it out? Since that is the only explanation as to why those contracts are being terminated: The hardware is getting replaced because it's not profitable anymore. In such a case, why not offer customers a switch to newer hardware for a small fee?
These contract terminations are
extremely suspicious to say the least. To me, it appears to be a built in "fail-safe" in favor of the companies selling the contracts - a fail-safe that makes the ponzi scheme obsolete because the customers never really have a chance of getting their money back. I don't want to say it's a scam because they're literally holding up their end of the contract - a contract you have to agree to before buying hashrate there. Is it a good business practice that invokes trust in them actually mining (all of the) coins they claim to mine? Certainly not.
Personally, I have come to the conclusion that services like GM or HF are nothing else but a gamble. You literally have to bet on the exchange rate going up enough (and due to the exponentially rising mining difficulty, those levels would have to be ridiculously high, almost impossible to achieve) until you can hit ROI - and it still could take years for you to get there. Why would you do that, though? Why would you bet on something if the best outcome is getting your money back after a year or so? You could literally invest in bitcoin instead, keep them for a year and you'll have so much more than just your initial investment back.
I am desperately looking for a legit cloud mining service, but neither HF nor GM are those - and those clauses in their contracts should make that abundantly clear to anyone still wondering about their profitability.
Please think twice before investing in those companies. No, GM and HF are (most likely) no ponzi-schemes - but that's because they don't have to be. They will do exactly what the contract you sign with them says - but it's a shitty contract and chances you will ever see ROI are minuscule. You literally have better odds in any given casino - and you know something isn't a good investment opportunity when "betting on black" isn't only a safer but also way more lucrative move.
