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Rising Hashrates Amidst Shaky Crypto Market — “They’re Happy To Accumulate”

Since the start of 2018, Bitcoin has fallen by over 65%, leading some to guess that mining activity fell in correlation with declining prices. However, it has become apparent that this hasn’t been the case, with hashrates across multiple networks consistently seeing higher lows (and higher highs) amidst an overall market downtrend. Where’s the proof? You may ask.

Well, as seen by the following chart from Blockchain’s information and statistics service, the seven-day hashrate average has nearly quadrupled since the start of the year, even as Bitcoin underwent serious ‘dives’ downwards. This was also seen across other networks, albeit not as bad, with Ethereum seeing a doubling in hashrate, and Litecoin’s hashrate nearly tripling.

Taking hashrate statistics into account, one would assume that mining is still profitable for all parties involved. But according to a recent Bloomberg article, it may not be that simple. Over the past months, the likes of Fundstrat’s Tom Lee and Brian Kelly have claimed that the break-even cost of mining has been well above today’s prices. But hashrates continue to rise, up and up, with miners seemingly giving zero regards to the total fees of mining (electricity, maintenance, hardware etc.) postulated by market analysts.

According to Marco Streng, the CEO of Genesis Mining, larger corporate miners are edging out the in-home, consumer miners, with firms like his still making “major expansions.” He elaborated, stating:

“There are still major expansions happening, especially from more efficient miners. The expansion is so big that it compensated for the drop-out of not-so-efficient miners.”

The previous statement alludes to the fact that operations like his — data centers that span tens of thousands of square feet and consume many megawatts of electricity — have grown so much that they have forced retail users out of the market, while also driving up hashrates near-exponentially.

In theory, as continually noted by Tom Lee, an increasing hashrate (and a subsequent increase in mining cost), should lead to higher cryptocurrency prices, as the break-even level has been seen as an unofficial bottom by some analysts. Therefore, many believe that the opposite is true, but as computational power and operational costs move downwards, it becomes evident that there are other factors behind networks undertaking a growing miner population.

David Sapper, the chief operating officer (COO) at the Blockbid crypto exchange, noted:

“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. At the same time, At the same time, they do sometimes have to clear house and dump (though).”

This brings up a very interesting point, where miners, who are operating at equilibrium or a slight/medium-loss are only keeping their machines on to accumulate crypto for the long-haul. This move suggests that while some firms may need to sell some crypto to cover costs, that this longer-term ‘HODL’ approach may indicate a sentiment of the success of the market for years to come.

While some data centers may be operating at a loss, as the aforementioned Genesis Mining CEO points out, it varies from firm to firm as specific farms are subject to an array of factors that drive costs up or down. Genesis Mining, while recently making a move to shut down unprofitable mining contracts, has still expanded its centers, buying new hardware that can keep up with the rising hashrates. Additionally, there are firms like Bitmain, which manufacture ASICs and uses these machines to mine itself, making the Chinese firm relatively profitable in the process.

Although ASICs may continue to ramp up in power, power efficiency, and manufacturability, it still remains to be seen whether hashrates will rise exponentially into the future.

Image Courtesy of Marco Verch

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Genesis Mining Compels Certain Customers to Upgrade BTC Mining Contracts

Iceland-based hashpower hosting service Genesis Mining is compelling some of its customers to upgrade their Bitcoin (BTC) mining contracts following this year’s significant cryptocurrency price decline, according to an August 17 statement.

In 60 days, the company will terminate services for open-ended contracts that mine less than the daily maintenance fee. Genesis claims that the downward trend of BTC around January and heavy decline in crypto mining in April and May resulted in a reduction of mining outputs.

If customers wish to continue using Genesis’ services, they have to upgrade their existing BTC mining contracts to premium five-year contracts. Genesis notes in the announcement:

“…as a hashpower hosting service, we can only influence one out of the three main factors that determine mining rewards, and that is the infrastructure… The market price of Bitcoin and the mining difficulty are factors we cannot control.”

Genesis Mining was started in 2014, with locations in Bosnia and China. The company subsequently moved to Iceland and Canada due to the cold climate and cheap electricity rates.

In March, Genesis was issued a cease and desist order and asked to leave the state of South Carolina due to selling “unlicensed securities.” South Carolina demanded Genesis not only halt operations within its borders, but pay an “appropriate civil penalty for the wrongdoing.”

Since Bitcoin slid from it’s famed $20,000 peak last December, miners have struggled to stay above water as the combination of low prices and regulatory pressure continues to put a squeeze on the industry.

In June, Canadian provincial utility Hydro-Quebec proposed new rules, under which blockchain companies will be required to bid for electricity and quantify the jobs and investment they expect to generate per megawatt. The new regime seeks to allocate up to 500 megawatts, in addition to 120 megawatts of already existing initiatives.

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South Carolina Ends Cease & Desist Orders Against Crypto Startups

South Carolina’s securities regulator has ended cease-and-desist orders against two blockchain startups, public documents revealed Thursday.

The South Carolina Attorney General’s office, which oversees securities regulation in the state, published two orders explaining that a cease-and-desist filed against blockchain startup ShipChain in May was vacated, and another complaint filed against mining firm Genesis Mining in March removed the company as a respondent. The moves mark the first time such orders were dropped against blockchain startups in the state.

The regulator had claimed that ShipChain’s tokens and Genesis Mining’s mining contracts were both unregistered securities. ShipChain pushed back against this claim in May, saying in a statement that the firm did “not believe [its] tokens are securities.” Furthermore, ShipChain claimed it was unaware South Carolina residents could purchase its SHIP tokens.

On Thursday, deputy securities commissioner Tracy Meyers wrote “the Securities Division of the Office of the Attorney General of the State of South Carolina, after receiving information regarding matters detailed in the Administrative Order to Cease and Desist issued … upon due consideration of such information, finds good cause has been shown to vacate the [order],” referring to ShipChain.

Similarly, Genesis Mining was dismissed from a its own cease and desist order. Swiss Gold Global, which was charged with acting as an unregistered broker-dealer for Genesis Mining at the same time, was not dismissed from the order.

Shipping containers image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Genesis Mining Brings Back Popular Bitcoin Mining Contracts

Have an interest in mining Bitcoin, but don’t know where to start?

You’re not alone, and Genesis Mining has the solution for aspiring miners just like yourself. Last week, the industrial scale miner announced the return of their massively popular Bitcoin cloud mining contracts, which allow customers to remotely purchase access to some of the world’s most sophisticated mining hardware and algorithms.

Miners don’t need to be math wizards, IT geeks, or cryptocurrency aficionados to be granted access to Genesis’ massive store of mining technology. All that is needed is ambition to begin or continue mining, the ability to discern which amount of hashpower best suits your needs and budget, and a few bucks to fulfill the terms of the deal. Considering that Genesis Mining is the industry leader—and world leader, for that matter—in cloud mining services, the opportunity is one to be carefully considered.

If the last go-round of Genesis’ Bitcoin mining contracts is any indicator, the (virtual) queues for these contracts will be quite long. So if you are going to have a shot at this year’s lot, it’s going to take a Black Friday-level of commitment. The last round of Bitcoin mining contracts lasted no more than 72 hours. Considering Genesis Mining’s 2 million-plus person customer base, it’s unlikely that this batch will last much longer.

Commenting on the relaunch, Genesis Mining CEO Marco Streng said, “Last year we simply found ourselves in a situation where the demand was simply greater than the supply we had available at that time. Over the past six months, we’ve dedicated significant resources to expanding our operations and developing our new GM Radiant Technology which will give us the highest level of efficiency we’ve ever had”

And for those with security concerns, there’s no reason to worry. Although fraud is a problem in the cryptocurrency marketplace, Genesis has earned a squeaky-clean reputation. Though many have offered counsel on how to avoid being defrauded by Bitcoin miners, one of the surest-fire methods for getting returns on your mining investment is to go with the most popular, reputable name in the business. As Bitcoin and broader cryptocurrency mining industries become increasingly populated by individual miners and farming conglomerates—some reputable, some not—known quantities like Genesis only increase in value.

Knowing whose hardware you are using, knowing that the hardware actually exists—in Genesis’ case, it definitely does—and knowing that you aren’t handing your funds over to the equivalent of a highway robber is invaluable. So, if you’ve made the commitment to yourself to get in on the ever-popular Bitcoin mining wave, consider that a contract issued via Genesis Mining may not only be the safe bet, but also the potentially lucrative one.

While the contracts are available now, history has proven that it’s unlikely they will be on the market for much longer. Get up, get out, and get started mining today.

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Crypto Miner Genesis Hit With Cease-and-Desist Order

Cloud mining service Genesis Mining has been ordered to stop operating in the state of South Carolina, according to a cease-and-desist order released on March 9.

Genesis and a second firm, Swiss Gold Global Inc., were named in the order, which says that mining contracts sold to state residents are considered securities. The Securities Commission of South Carolina alleged that Swiss Gold Global acted as a broker-dealer for Genesis, but that it hadn’t registered in the state to offer securities.

“At all times relevant to this order, Respondent Genesis Mining continuously offered investment opportunities in Mining Contracts to South Carolina residents through its website. At no time relevant to the events stated herein was Respondent Swiss Gold Global registered with the Division as a broker-dealer, and no exemption from registration has been claimed by Respondent Swiss Gold Global.”

Through the contracts, buyers essentially purchase an amount of computing power over a period of time that is hosted elsewhere, as opposed to owning mining hardware themselves. In the Commission’s view, they “constitute investment contracts and are thus securities” under South Carolina law.

Both firms were ordered to stop doing business in South Carolina, according to the document. Additionally, both Genesis and Swiss Gold Global were permanently barred from offering any securities in the state in the future. That said, the companies have the opportunity to a request a hearing with state officials to present their side.

The move represents the latest cryptocurrency investment-related cease-and-desist order to come out of a U.S. state regulator in recent weeks. To date, state officials have sent orders to a number of firms, most recently the one behind a cryptocurrency endorsed by film actor Steven Seagal.

The full cease-and-desist order can be found below:

C&D by CoinDesk on Scribd

State flag image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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South Carolina Wants To Ban Genesis Mining Over Unregistered Securities

Lawmakers in South Carolina asked cryptocurrency cloud mining platform Genesis Mining to leave the state due to selling “unlicensed securities” Friday, March 9.

A cease and desist order filed by the South Carolina Attorney General’s Office Securities Division claims Genesis, which is registered in Hong Kong, along with Zurich-based partner enterprise Swiss Gold Global, illegally served residents with unregistered mining contracts.

At no time… was Swiss Gold Global registered with the Division as a broker-dealer, and no exemption from registration has been claimed,” the order reads.

“At no time… were the securities at issue registered with the Division or federal covered securities.”

The order marks the latest in a string of US state-level requests for various cryptocurrency actors to withdraw their services. Texas and New Jersey have both issued cease and desist requests in recent weeks, these nonetheless pertaining to businesses with questionable reputations and history.

Most recently, the ICO endorsed by Steven Seagal was asked to quit New Jersey’s jurisdiction.

In February, lawmakers at national level promised to continue monitoring the providence of any cryptocurrency-related offering available to US citizens.

South Carolina demands Swiss and Genesis not only halt operations within its borders, but pay an “appropriate civil penalty for the wrongdoing.”

Both companies have yet to provide official comment on the matter.  

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Artemine Creates Major Technical Breakthrough, Introduces Public Mining

ICOs are proliferating everywhere. Even accounting for the Chinese government ICO ban, the number of ICOs continues to rise with many continuing to forge ahead.

Further, as cryptocurrencies become more mainstream, consumers are seeking to join in with the early adopters and take advantage of mining profits.

Mining coins manually, without any mining equipment

Minereum (MNE), the first self-mining smart contract ever created, has released version 2.0 called Artemine. This new platform is intended to continue the evolution of smart contract mining technology with added benefits and features for users.

Artemine creates a major technical breakthrough by introducing public mining, which allows anyone to mine coins manually without mining equipment.

What’s more, as part of the Artemine roadmap, an ICO Factory will be created, as an update to the already existing Minereum Token Creation Service that allows anyone to create a fully functional Ethereum token in exchange for a small MNE fee.

The ICO factory, coupled with a platform allowing the creation of tokens, users will be able to create their own ICO smart contract which will simplify the whole process of setting up an ICO. All these features within the Artemine ecosystem are available for a symbolic amount of ARTE, the Artemine token.

Artemine will be launched as an ICO starting on Sept. 14. ETH and MNE will be accepted in the ICO and all MNE received will be burned. A graduating bonus scale will apply so that investors who are early in the ICO will receive greater rewards than later investors.

Genesis freedom

Beyond simply the freedom created by the ICO factory and self-mining, it is important to note that in the self-mining principle, the concept of genesis addresses is introduced.

Artemine will attempt to create a new market by allowing consumers to autonomously sell their genesis addresses without the need for a middleman, exchange or any third party. The sale will proceed directly via a smart contract in a peer-to-peer transaction.

While some non-technical cryptocurrency users may find this information confusing, this brings the possibility for a new and radically decentralized market to be created.

Not only will the existing market exist where coins are traded, but the new platform will create a market where full control over genesis addresses will be handed to the users. The addresses are sold and transferred with the full security of the Blockchain.

For more information check out Artemine on Twitter, or take a few minutes to dive into their informative whitepaper. The radical change that Minereum brought to the marketplace continues with the release of Artemine.

Disclaimer. Cointelegraph does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor this article can be considered as an investment advice.