What is LTCgear?
LTCgear is a cloud mining service designed around Litecoin. It offered 2 products which are the 2ndGen pre and the 3K0 which are both currently out of stock.
Cloud mining is a form of investment when one pays for a virtual space in the company’s mining farm. The cloud mining provider specifies a scheduled list of payouts which investors use to determine if the cloud mining contract is worth it. In case of LTCgear, it offered the best payouts out on scrypt/scrypt n/X11 cloud mining service, ROI 2 months as the title of their topic on bitcointalk.org suggests.
It has come to our attention that payouts of LTCgear accounts have been delaying payouts and many investors are becoming increasingly concerned. Looking far back as far as December 22 of last year payouts have already started having problems and now it seems that the site’s administrator Chris, is delaying payouts on a day by day basis. Here is a screenshot of an archived announcement that happened on December 30th shortly after people started having withdrawal issues:
Seems that Chris claims an issue with the database caused customer’s payouts to get mixed up and thus delayed. However, if we look back at an archived announcement on December 28th, 2 days prior to the database error announcement we see a different claim at hand:
This time Chris claimed that there was a high load on the server and the site needed to go under maintenance. It does seem strange that such a high server load exists on a cloud mining service with scheduled payouts. Shouldn’t the high load occur only during the payout times?
Today on January 25th, more than a month later, many investors are still having trouble with their payouts and the current announcement on LTCgear states the following:
Very reassuring, an announcement that an announcement will be posted, call it announcementception
Investors loosing faith
While Chris is working on drafing another announcement, the invesotrs are getting anxious and many are resorting to selling their accounts for cheap because of a loss of hope. You can find many offerings for LTCgear accounts for cheap on bitcointalk.org. Some gamblers either have hope that LTCgear will eventually honor their payout schedule and complete they pending payouts, while others might snatch up an account or 2 in case of a class action law suit if the company collapses.
Current state of cloud mining
Recently we reported how cex.io – a once popular cloud mining company – had to shut it’s doors and go out of business. Furthermore, much controversy surrounds GAWminers, yet another cloud mining company which stopped payouts and is reportedly under an SEC investigation.
If you are a cryptocurrency enthusiast looking to make a quick buck, cloudmining is not the way to go. At the end of the day the problem with cloud mining companies is the business model, it is simply unsustainable. Because of the unsustainable model many fall victim to greed and become ponzi schemes, while others shut down with honor. So far we have seen delayed payouts with no explanation from the owner. It seems that the outcome of the SEC investigation on GAWminers will set the precedence for the government’s involvement in the cryptocurrency cloud mining business.
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