Mining Roundup: BTC Guild For Sale and ZeusMiner’s Sudden Hardware Halt

Stan Higgins
Oct 31, 2014 at 22:11 UTC
Updated Nov 3, 2014 at 13:07 UTC

The global cryptocurrency mining sector continues to see new developments that will define its evolution in the months and years ahead. In this ongoing maturation, players both new and old are jockeying for a leadership position.

However, this week brings new indications that not all are adapting easily to this reality.

BTC Guild warns of possible closure

BTC Guild

Mining pool operator BTC Guild has announced that it will likely shut its doors early next year, and that a potential sale is being considered at this time.

According to the 31st October announcement, new registrations have been suspended, while the pool’s mining servers will be active until 30th November. Thereafter, users need to withdraw any remaining balances by 11:59 PM PST on 30th January.

BTC Guild said that the combined security risks and regulatory uncertainties arising from its presence in the US posed significant long-term challenges. BTC Guild first suggested the possibility that it may close in July, when the operator said in a message to users that future pressures could result in such an outcome.

The pool, which currently constitutes 5% of the bitcoin network hashrate, cited the costs of a successful hack attack which would both imperil the platform and financially impair the pool’s customers.

Owner eleuthria, who also posted a farewell message on the Bitcoin Talk forum, said that more updates will be provided if the pool is closed.

Eleuthria thanked both the pool’s long-time supporters and the bitcoin community for their support, adding:

“Bitcoin and BTC Guild have both radically changed my life. While I am closing BTC Guild, I still plan to remain a part of the Bitcoin community. I do believe, even in the face of over-regulation, that bitcoin will continue to grow and become more useful and usable.”

ZeusMiner halts hardware development

ZeusMiner

ZeusMiner has made several significant moves in the past month that suggest the company is shifting its business model as it seeks to compete in China’s mining sector.

Most notably, ZeusMiner is halting development of its third-generation Scrypt ASIC chips and Volcano mining product. The company cited concerns that it would not be able to afford supporting both chip development and the management of its cloud services, ZeusHash.

This move follows ZeusMiner’s new partnerships with China-based mining hardware makers and developers ROCKMINER, ASICMiner and XBTec.

Earlier this month, ROCKMINER announced that it would enter a strategic alliance with ZeusMiner, with ROCKMINER contributing SHA-256 hashing power to ZeusHash.

CoinDesk caught up with ROCKMINER’s Alex Lam at Hashers United in Las Vegas, who at the time attributed the deal to a long-standing spirit of cooperation that had developed between the two companies. He explained that the ROCKMINER team is always looking for new ways to grow the marketplace, and that the company itself has also forged partnerships with ASICMiner on similar initiatives in the past few weeks.

“We try new opportunities, new chances,” Lam added.

Both ASICMiner and XBTec will provide logistical support by supplying the hashing power for ZeusHash customers. According to the company, the move represents a broader collaborative shift among China’s largest mining hardware players.

ZeusMiner said at the time:

“The partnership among ZeusHash, AsicMiner and XBTec is a new step forward for the industry and will pave the way for a more thriving ZeusHash cloud mining platform.”

The decision to halt production of the Volcano, CEO Terry Li said in a new email to customers who pre-ordered the mining product, reflects the company’s new emphasis on the cloud. Li said that broad interest in ZeusMiner’s cloud services and consultation with a third-party analyst raised concerns about operating both hardware and cloud solutions long term.

Li explained in the email:

“The analysts estimated that the moment we would allow the switch from Volcano to ZeusHash over 80% of the Volcano pre-order customers would take advantage of this possibility. But this would mean for us that it would be impossible to continue the production of the Volcano because of the low production volume.”

ZeusMiner is offering pre-order customers two options: complete refunds in the currency they made their pre-order in (either bitcoin, litecoin or US dollars) or a pre-order transfer from hardware to software. The company is giving 10% discounts to those who opt for the cloud option, among other incentives.

Li called the move “a very difficult decision” and apologized to affected customers, who he invited to reach out to him with questions and concerns.

“I apologize to you for having to make this decision and thank you for your support,” he said.

KnCMiner refutes class action lawsuit

kncminerlogo300x100Sweden-based bitcoin mining company KnCMiner has hit back at allegations that it is guilty of fraudulent behavior.

In a blog post from last week, the company reiterated its opposition to a potential class action lawsuit being organized by a California law firm. KnCMiner, which previously stated that the possible legal effort was lacking a legal basis, said that such efforts are fueled by lies being circulated in both social media and online publications.

The company said:

“We’d also like to add caution stemming from reports of phishing sites and so-called ‘ambulance chasers’ looking for prepaid retainers using our brand while claiming some sort of ‘legal’ action – this is also being repeated in some online media outlets. These sites are sometimes paid for by the competition, sometimes supported by paid editorial content and forum posts with made-up legal claims.”

KnCMiner added: “We are not commenting on each and every rumor as we choose to focus our time on producing and delivering the most efficient cryptocurrency products on the market.”

The blog post also included a warning to customers about a phishing attempt being made using fraudulent email addresses. The company advised customers to not disclose personal information before verifying that they are speaking with a legitimate KnCMiner representative.

Miners share data center ‘unboxing’

It goes without saying that many bitcoin miners are tinkerers who love nothing more than experimenting with some new hardware.

A thread on Bitcoin Talk posted by the operators of MegaMine, a UK-based bitcoin mine, gained traction after those involved with the initiative shared some photographs of their latest shipment of products. In this case, the team received a batch of KnCMiner Neptunes and quickly got to work on setting up the racks of miners.

Mine Photo 1

Mining Photo 2

Mining Photo 3

The thread sparked a conversation about the economics of running home equipment vs buying cloud mining services, with some recent activity stirred by the simultaneous decline in the price of bitcoin alongside the every-climbing difficulty.

Some members argued that cloud mining can offer ROI while others pointed out that pool fees and market volatility, particularly in scrypt mining, can hurt smaller investors.

Feature photo via Shutterstock