Mining Giant Terminates Unprofitable Customers

Cloud mining operator Genesis Mining is terminating customers who are unable to cover their “service fee” because of low mining profitability.
LIONBIT
In an email to their clients, the company writes that the decline in bitcoin prices that started in January have coincided with “heavily rising difficulty” of bitcoin mining in April in May.
“As a result,” the company writes, “some user contracts are now mining less than the daily maintenance fee requires to be covered, and thus they entered the 60 days grace period, after which open-ended contracts will get terminated.”

Also, the company has offered a USD 105 discount to existing customers after upgrading to its premium service, known as Radiant.

Cloud mining is the process of hosting mining hardware for clients in a remote location in exchange for a fixed fee usually denominated in fiat currency. This way, the cloud mining operator takes virtually no risk, while the client is left with the risk of the mining contract becoming unprofitable due to increasing mining difficulty or lower cryptocurrency prices.
Although Genesis Mining’s FAQ section does specify that the company reserves the right to terminate a contract should the mining rewards of the contract be insufficient to cover the service fee, many users have voiced their frustration with the company.

TIP

The company is now requesting existing users to upgrade their contracts in order to continue mining with Genesis, but has received mixed reactions from the community.
“The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss,” David Sapper, chief operating officer at cryptocurrency exchange Blockbid Pty Ltd. in Melbourne told Bloomberg.
At the same time, “they do sometimes have to clear house and dump.”

According to various analysts, the break-even price for miners is in a range of USD 6.400 and USD 8.000 per bitcoin and varies depending on the miner’s efficiency.



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Author: Fredrik Vold
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Politicians Add Crypto Miners To Their List of “Enemies”

With cryptocurrency mining consuming an ever-increasing amount of energy worldwide, some politicians are starting a push for higher electricity rates for miners, arguing that their activities offer “no utility for society.”

LIONBIT

Crypto mining facilities in many countries in Europe and North America enjoy the same discounted electricity rates as other data centers and traditional energy-intensive industries pay.

However, some politicians are trying to include this topic in their agenda. The most recent example comes from Norway.

In a segment aired by Norwegian public broadcaster NRK on Thursday, a local crypto mining firm known as KryptoVault AS were attacked by Lars Haltbrekken, a left-wing member of parliament in Norway, referring to mining as “an enormous waste of resources that perhaps could have been used for something reasonable instead.”

KryptoVault’s representative, former member of parliament Gjermund Hagesæter, defended their activity by pointing out that the alternative for them and other miners in the country would be to move the mining operations to other countries with more polluting energy sources such as coal.

Countries with plentiful and cheap energy coming from renewable sources have seen a large influx of crypto miners as of late, with Canada, the northeastern US, and the Nordic countries being among the most popular locations.

The sentiment expressed in the debate is not unique to Norway, but can be found in countries all around the world.

In March, Plattsburgh, a small town in New York State, banned the launch of new bitcoin mining firms for 18 months and in May it received a permission to impose extremely high-density load tariffs on bitcoin miners. While China is already known for its policy against bitcoin mining, in Iceland, the finance minister has warned that cryptocurrency mining could severely damage its economy.

Also, back in June, Hydro-Quebec, Canada’s biggest electricity provider, said it had temporarily suspended new requests from crypto miners after demand had reached a point where their ability to supply power to the region could be affected.

Meanwhile, politicians are playing the bitcoin mining card at times when mining profitability decreased together with bitcoin prices this year.

Bitcoin miners have seen their profitability plummet as of late, while some miners had to unload their coins to cover some of their losses.


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Author: Fredrik Vold
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Electroneum (ETN) Returns to ASIC Mining, iOS App in Beta Testing

The mobile-based crypto coin has seen an increase again as ASIC miners are back in the game.

Electroneum (ETN), a cryptocurrency payment project that targets smartphone users in the developing world, has made a peculiar U-turn in its tech policy, deciding to allow ASIC mining again. Many Electroneum supporters were taken aback by the move, announced at the end of last week, as a few weeks ago, the team performed updates through a hard fork to disable mining by expensive ASIC equipment in favor of household mining with relatively cheaper GPUs (graphic processing units).



#ETN update success!
Updated Electroneum blockchain. Welcome back ASIC miners!
Check your chosen pool and ensure they’ve updated.
We’ll see fast blocks until it settles down.#cryptomining #ASIC #ASICS #ETN #electroneum pic.twitter.com/9q6C4Tz8mr
— electroneum (@electroneum) July 5, 2018

The trouble is that the Electroneum network had a very slow difficulty adjustment algorithm, and users had to wait for days until blocks could be produced based on the work of PCs and GPU miners. In the past, the Electroneum network greeted ASIC with optimism, stating the machines were also behind the growth of Bitcoin. Currently, many coins see the potential for mining farms as a claim on having a robust future, as compared to coins that remain mined by GPUs and with permanently low hashrates.

Our ASIC’s miner’s have arrived at the office!. We will be working with the ASIC miners today and well into next week to decide on the best code to implement in our next update!

Back in the spring, the Electroneum team even worked toward optimizing the code for ASIC mining. So the decision to disable mining and give advantage to small-scale operations also looked strange, but was hailed by the community. Curiously, the Electroneum hashrate has not changed significantly, but the difficulty has risen up to 100 times – resulting in a potential network slowdown. It is unknown how many ASICs are mining, or if they will continue to mine and produce enough blocks at the new difficulty level.

But now, difficulty has grown again, and apparently, some ASICs have been pointed to the network. In the meantime, the KuCoin wallet for Electroneum is in maintenance again.

There is also a backlog of transactions on the mobile app.

The price of ETN remains depressed, and despite recovering by some 20% over the past week, it has slid again, down 8% overnight to $0.012. The most optimistic predictions for ETN see the coin costing a few dollars, but for now, the asset trades on very low volumes, and the lack of enthusiasm keeps the price depressed.

But perhaps the biggest advancement for the Electroneum project is that there is an iOS wallet open for testing by invitation – a step in the direction of reaching more users. Some believed ETN would never reach Apple users, especially given that the company warned against using mobile devices for mining. However, the app was accepted to the Apple store for testing.


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PoWx: The New Effort to Change Bitcoin Mining Explained

A long-controversial bid to change bitcoin just got a big boost.

Boasting the support of tenured developers, a non-profit foundation called PoWx launched this week with the goal of putting a more sophisticated wrapper on the idea that proof-of-work (PoW), the way the network comes to agreement on which transactions are valid, could be replaced with a newer, supposedly better, algorithm.



In short, PoWx advocates bitcoin adopt a new technology it calls “optical” proof-of-work, which uses a more energy-efficient laser technology as the cornerstone of mining.
The hope is to “fix” mining by making it easier for more people to participate in the process, in part, because the barriers to entry have become so prohibitive. (At the beginning in 2009, users just needed a simple laptop to run the code to mine bitcoins. Now, they need to purchase specialized computers costing thousands of dollars and which they don’t do anything else.)

Not to mention, the developers behind PoWx are the latest to point to one mining firm, Bitmain, and its influence on the network as a major issue. Though exact numbers are cloudy, estimates say the company is manufacturing between 50 and 80 percent of bitcoin’s mining hardware.

Against this backdrop, the idea of swapping bitcoin’s mining algorithm has been around for some time, mostly flaring up in times of perceived crisis. It’s been seen almost as a last resort to be deployed only in the case miners do something really bad, such as colluding to attack the network.

But PoWx founder Michael Dubrovsky sees the change as an inevitability.
He calls mining centralization bitcoin’s “Seldon Crisis,” a specific type of earth-shattering issue found in the famous sci-fi series “Foundation” and which denotes a point of no return.
Dubrovsky told CoinDesk:
“I think PoW consensus is the most important innovation in bitcoin, and bitcoin is an incredibly important innovation in personal freedom and property rights.”
To this end, he argues changing this underlying technology will help to “ensure the mining ecosystem is healthy enough and scalable enough to support crypto’s growth over the next decade.”

More broadly, developers have long worried about bitcoin’s level of “centralization,” or the measure of how much control single stakeholders have over the technology. (Decentralization is seen as a key differentiator, one that makes bitcoin more unprecedented in the history of money.)

To that end, they’ve argued that if this problem goes unaddressed, mining centralization might lead bitcoin to turn into something resembling the financial system it’s supposed to replace.
So, to attempt to put this problem to rest, developers have put forth a variety of potential technical fixes.

Dubrovsky grew interested in changing proof-of-work as a solution, deciding to work on the idea about a year ago as he became convinced optical PoW was the best solution.
According to the PoWx team, this new algorithm, if implemented, would usher in two huge improvements to bitcoin. One, the barrier to entry for startups producing the chips will be lower, thus increasing decentralization of the network. Two, it reduces power consumption (estimates suggest bitcoin now makes up 0.15 percent of the world’s electricity costs).
One hurdle though is PoWx has yet to secure fundraising.

But their goals are nonetheless ambitious, vowing in the short-term to develop open-source hardware putting optical PoW into practice and to release a test network demonstrating their open-source design by Q1 of 2019.

Longer-term, they hope to launch a for-profit company called Arrakis Photonics to put this cutting-edge optical mining hardware into practice. (Their presentation outlines more specific details, including the technical makeup of the hardware they want to create.)

Although they’re putting plenty of thought into this idea, swapping bitcoin’s proof-of-work isn’t at all an easy task.
It’s a pretty drastic change, one that would require every user to update their software if it was coded into a formal proposal. If a larger number of users were to disagree on the proposal (if and when introduced), bitcoin could even split into two different cryptocurrencies, similar how bitcoin cash broke off due to disagreement about the project’s technical direction.

Still, it’s perhaps too early to say what users want – though the general idea has prompted outpourings of controversy, including lawsuit threats, in the past. And as bitcoin is a decentralized system, the opinion of users can make all the difference.
But Dubrovsky argues there’s no choice – the community needs to make the change.
“I think it will be difficult, but what we are proposing is not just an improvement,” he told CoinDesk. “Something like this is a necessity if cryptocurrency is going to be truly decentralized and used to securely store and move trillions of dollars of value.”
As such, one of PoWx’s main goals is to work with the bitcoin community to make the switch.

So far, the effort has won the support of Bitcoin Core contributor Luke Dashjr and pseudonymous bitcoin.org maintainer Cobra, two influential figures in the space who are also both known for espousing controversial points of view. (Most bitcoin developers have yet to make a public statement about their views.)
Finally, there’s always the question of whether mining will just centralize again, even after PoW is changed. However, Dubrovsky argues it’s unlikely.
“It is not clear that OPoW could ever lead to the same level of centralization we see today,” he said.

Still, he’s trying his best to look at the problem realistically, agreeing it’s unclear how PoWx will work yet. And, even if it does, he admits bitcoin could still have future problems.
He concluded:
“I hope PoWx can participate in solving that next crisis as well, but we will all cross that bridge when the time comes.”


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87.5% of all Bitcoins [BTC] will be mined by 2020 – Here’s why it matters!

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The block reward for Bitcoin will halve next in about two years from the time of publishing this article. The estimated time for the next half of the reward is around 732 days, but it is relevant now for a few reasons.

The current bear market offers opportunities for investors to buy and hold Bitcoin, as it is currently trading at a low since the past week. It has been plagued by sell-offs and FUD, along with a general bearish trend. Market sentiment is also low after the CFTC and US Justice Department declared the existence of a probe into cryptomarkets for fraudulent practices.

As the price is currently low, interest by institutional investors is on a high after a successful Consensus conference and general adaptive behavior. News such as Goldman Sachs beginning a cryptocurrency trading desk and JPMorgan’s high-level reshuffling to focus on cryptocurrency may as well be the tip of the adoption iceberg.




As the 17 millionth coin was mined sometime last month, a reality check descended on the market that the amount of Bitcoin left in existence is limited. Even as digital assets tend towards digital abundance, Satoshi’s blockchain allows for real digital scarcity with real-world parallels. The 21 millionth coin will be mined in around 2140, approximately. The time, electricity, and computing power required to mine new coins is constantly increasing, with Murphy’s law being barely able to keep up.

As the block reward is halved every 210,000 blocks, it constantly decreases the rate at which it is possible to create new Bitcoin tokens. The new landmark on ETA, 28th May 2020, will decrease the reward from the current 12.5 coins to 6.25 coins. The total coins mined before the next halving of the block reward will be 18,375,000, which marks 87.5% of the possible 21 million Bitcoin tokens.

This will then exponentially reduce the speed at which new Bitcoin come into existence, spiking up demand for the coin due to reduced supply. Analysts predict that this bear market will be the last one before 2020.

Crypto analyst Trevor Wade says:
“This bear market is the last chance for investors to buy into Bitcoin before the price goes up to $10000+. Reduced block rewards will result in supply cutting off and demand going up, which will cause an exponential spike. Regulators and institutional investors are moving in in a safe way, allowing for large-scale adoption of financial system disruptors.”


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Tech Giant GMO to Roll Out World’s First 7nm Bitcoin Miner

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Japanese IT giant GMO Internet is set to roll out the world’s first bitcoin mining device based on 7nm chips within the year.
According to an announcement on Wednesday, the firm said it is launching the new B2 miner on June 6 with mass production to follow and shipment starting by the end of October.
The launch comes following a months-long testing period since the firm initially revealed it was researching and developing the new ASIC processor in September 2017. While the device should provide high-levels of hashing power with lower electricity demands, the firm said it will provide details of the B2’s price and performance at the June launch.
According to the announcement, in addition to selling the B2 to other miners, GMO also plans to utilize the new product at its existing mining facilities.



As previously reported by CoinDesk, the publicly listed Japanese firm made a notable leap into bitcoin mining business last year with a $90-million budget to back explorations in the space, including chip making and its own mining farms.

GMO’s mining facilities have been up running since the end of 2017 and, as per a report released earlier this month, the firm has already mined 906 bitcoin and 537 bitcoin cash as of last month.

While the cost of production remains unknown, the total value of those mining rewards amounts to nearly $8 million based on the latest CoinDesk prices.

Meanwhile, GMO isn’t the only one major tech firm planning to carve out a slice of the bitcoin mining industry by introducing more advanced mining chips. Notably, Samsung is also starting a “risk production” of 7nm chips in 2018, according to a report by CoinDesk in February.

In addition, GMO announced in October of last year that it would sell its bitcoin mining equipment in 2018 via an initial coin offering. A representative told CoinDesk today that the firm is still considering the idea, but could not disclose more information due to the early stage of the plan.


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Bitmain the ASIC Mining Giant is interested in building an AI-based chip for Bitcoin [BTC] Mining!

After a huge success in the cryptocurrency mining space, Bitmain, the evasive Chinese firm that sells around 80 percent of the planet’s mining ASICs is currently contemplating getting into the ever-challenging AI game.

Bitmain’s co-chief executive, Jihan Wu, stated that the business feels “fortunate” due to its enormous earnings from ASIC earnings. The mining rig maker wants to expand in different directions. This would not be the very first time Bitmain’s made a foray to the AI marketplace. It was similar to a GPU for profound learning instead of graphics manufacturing and processing.

Presently, Google has found in the area of AI using its Tensor Processing Unit, a profound learning ASIC that may process an amazing amount of image data and comprehend words inside of these. Then again, the TPU is provided only to clients of Google’s cloud solutions, which can be blocked in China. Here, Bitmain includes a substantial benefit and tons of space to develop into a global rival.

Bitmain’s standing for chipmaking comes due to a conclusion that Wu created when he had been mulling the organization’s business model. He was also considering making it a cryptocurrency market, but backed out of this when realizing it had been too much legal threat considering China’s regulatory environment and possible government actions elsewhere.

The decision to focus more on AI could have caused the extreme quantity of strain against Bitmain’s ASIC company from nearly any cryptocurrency with the exclusion of Bitcoin.

Considering that the ASIC giant has expertise in focusing chips for these sorts of programs, Bitmain just might have exactly what it takes to earn an important effect in AI technologies, getting among the many companies driving the restricted but highly promising distance.


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Author: Crypto Crimson Staff
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