Cloud Mining Suffers as Hash Rate Plateaus


#1

Came across this article while doing my daily CoinDesk reading.

Number of bitcoin miners goes down

Over the weekend, Organ Ofcorti published a comprehensive analysis of weekly bitcoin network statistics.

The anonymous miner and blockchain data analyst pointed out that GHash.io reported a drop from 34,000 active user accounts to 6,000 user accounts on January 13th. The number then went down to 5,500 users. The drop was attributed to CEX.io’s decision to pull the plug on cloud mining operations.

As a result, the estimated number of bitcoin miners plummeted by almost 30,000 in a matter of days. However, this does not mean the hash rate went down. Following the crash, the hash rate recovered and returned to peak levels in less than a week, after hitting a low of 229,513,534 GH/s on 14th January.

The article goes on how cloud mining companies continue to face issues maintaining their contracts due to how their services and companies are structured. I specially liked this quote:

“The cloud mining market seems like a good idea in theory ensuring that the ownership of the hashing power is distributed among many participants. However the market suffers from a lack of transparency and operational risk which currently the industry from pricing the contracts efficiently.”

It’s true, that’s why we’re aiming to be different. GetHashing Crowd - proof-of-everything :wink:


#2

Im still of the opinion massive farms are a bad idea, love to see how we get around that though. GL :slight_smile:


#3

I doubt you get around the big farms or ever produce enough hashing power to compete with them on the same level. Plus, you end up shooting difficulty through the roof if you match their PH (imho). I’m still eager to see if BitcoinBrothers will really come online with their alleged 6 PH super computers. The difficulty increase would be insane.


#4

For me the diff increase is a safety valve, it forces balance. Sometimes the concept of “Economy of Scale” is counter productive. I would like to see that computational power directed somewhere more useful, science and medicine for example.


#5

If somehow the Bit Coin Brothers could do this they could end up with 100% of the hashing power as no other company in the world could afford to mine. If this was to happen the BTC foundation would have 2 choices. One would be to hardfork to another algorithm assuming that the Bit Coin Brothers are using some type of asic, or 2 change to POS.
If the Bitcoin Brothers were to succeed BTC is dead in the water and along with it most Crypto.