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Is it the End of Bitcoin Mining Industry? 5/5 (2)

Bitcoin Mining Industry
Written by Paul Gimmicks

Due to the continuous bearish market trend during 2018, most of the companies and investors had been affected negatively. BTC (Bitcoin) mining firms are the ones who suffered from the Bitcoin price collapses a lot due to their huge investments and fixed running costs.

Struggles of the Two Giant Bitcoin Mining Companies

Two largest brands of the Bitcoin mining industry are in highly challenging financial positions;

BITMAIN logoBitmain – Bitmain struggled a lot during the year 2018. The company reported firing of around 50-80% of its personnel. Although they have invested a high amount of energy and time in the innovative way of mining technologies lately, potential buyers of these technologies disappointed the expectations of Bitmain due to the bearish market prices.

Also, Bitcoin price has been continuously depreciating, and it became tough to earn profits from Bitcoin mining. Bitmain is one of the major miners around the globe, and they still claim that they are expanding their investments on the new mining facilities.

But it is not hard to predict that 2019 will be a hard year for Bitmain as the company is under intense financial pressure. We will be monitoring their performance and hope they will overcome their problems ahead.

Bitmain Bitcoin mining giant on its death bed! Fired majority of employees and IPO getting rejected! (Source: Mr_Kristof)

Bitcoin Cash war was a compelling factor for Bitmain losses. They not only spent a lot of money but also the price of the one million units of Bitcoin Cash cryptocurrency has collapsed! Besides, they have stuck with a reasonable amount of Litecoin due to the sharp price decrease.

There is another negative rumour spreading around for Bitmain which is the inability to financing the research and development personnel. This type of incompetence is undoubtedly a critical handicap for a large-scale Bitcoin mining company.

GMO Internet logoGMO Internet Group – It is another sizeable Japanese Bitcoin mining company which decided to enter this industry just after the Bitcoin price record of $19,783. They have not only been servicing Bitcoin mining but also “Cloud Mining Contracts”. Besides they have also been in the business of selling mining equipment for the investors.

When they have first entered the sector, they have been called “Bitmain Killer“, and they were naturally motivated by this appreciation! Authorities perceived their presence as a healthy alternative to Bitmain. But just after a short time, bearish market prices have been realised, and small investors start to lose money on their mining investments.

What is Bitcoin mining? – GMO INTERNET (Source: GMO Internet Group)

GMO Internet Group has realised a significant loss of more than 300 million USD due to Bitcoin mining just in the 4th quarter of 2018. Although they have made a profit of 23 million USD during the 3rd quarter, they announced that they would not be selling mining hardware anymore.

Even though they have terminated the sales of mining equipment, they are still using the existing hardware to mine Bitcoins. But they are in search of a lower cost and more clean-energy areas around the world to increase the efficiency of their productions.

Bitcoin Hash Rate and Network Difficulty

Although the Bitcoin mining industry has become more costly for the investors, there is still a great potential in the Blockchain network. It will indeed be a “natural selection” process. Uncompetitive companies will be eliminated, and the more efficient producers will stay in the market with increasing revenues.

Current has rates, and network difficulty levels are at much higher levels when we compare them with the last year’s figures. Therefore Bitcoin is still a highly secure network, and we will be seeing new entrepreneurs although Bitmain or GMO type companies will fail to stay in the market scene.

Samsung is an excellent example to this as their “Multi-National Conglomerate” is working on Bitcoin mining pieces of equipment. So, we have not seen a “Game Over” sign yet!

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About the author

Paul Gimmicks

I am the Founder and the Chief Editor of CryptoCasinos.cc site. My Team and I publish everything on cryptocurrency casinos including in-depth casino reviews, useful articles and last-minute news.

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