BitFury Exploring Options in Bitcoin Cloud Mining Market

Tanaya Macheel
Jan 28, 2015 at 23:15 UTC
Updated Jan 28, 2015 at 23:36 UTC
news

Bitcoin mining company BitFury is looking to enter the cloud mining market.

BitFury has given no indication as to when its proposed cloud mining offering would launch. However, it outlined how it would provide hardware to partners, only adding supply based on demand, rather than selling hashing power without limit.

CEO Valery Vavilov told CoinDesk:

“We are working on such a solution for the cloud market.”

The statements follow hints made by the BitFury CEO at the The North American Bitcoin Conference in Miami earlier this month, when Vavilov discussed the “opportunity” he saw in the recently tumultuous space.

Eliminating risk

Vavilov explained how BitFury’s involvement in the cloud mining market might work, which would see it establishing relationships with cloud providers and providing physical hashing power to then be sold to cloud customers.

“Here is how it should work: cloud service enters business agreement with mining company; mining company approves cloud service and allocates certain amount of hash power for sale (wholesale); cloud service sells virtual GHs to its client,” Vavilov said.

“This way,” he continued, “the end client receives GHs straight from the mining company, so the deal is backed/guaranteed by the mining company through smart contract.”

Should something happen to the cloud service provider, he noted, the client would still have the hashing power from the mining company.

“This scheme eliminates maximum risks and is a win-win-win situation for all parties,” Vavilov added.

Changes in cloud mining

BitFury’s development comes under discouraging circumstances for cloud miners, owing to the recent drop int he price of bitcoin coupled with an elevated mining difficulty.

Earlier this month CEX.io announced it was suspended its cloud mining activities, saying it had become unprofitable following a drop in the bitcoin price that led to increasingly lower revenues. CEX previously relied on third-party mining partners to provide its hashing power.

However, BitFury isn’t the only company that has voiced optimism amid a challenging environment, including firms from China’s mining sector.

Bitmain has continued to operate its cloud mining service after powering down less-efficient hardware, while ZeusHash, which earlier this month warned customers that it may have to suspend its bitcoin cloud contracts, began offering a new mining contract earlier this week. Other companies in the space have also expressed similar positivity about the model.

Stan Higgins contributed reporting.

Image via Shutterstock

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