Halts Cloud Mining Service Due to Low Bitcoin Price

Bitcoin mining service CEX.io has announced it will suspend its cloud mining activities.

The company stated te a 12th January blog postbode that it is no longer profitable, blaming declining revenues amid a pulling down bitcoin price. CEX chief information officer Jeffrey Smith told CoinDesk that operations would resume if the price of bitcoin climbs above $320, calling the stir “improvised”.

The suspension comes after CEX customers experienced disruptions to their cloud mining service, which the company at the time attributed to third-party complications. Smith said that the two issues are unrelated, that the economic influence of a druppel te bitcoin prices cut into its capability to suggest its clients profitable mining services.

Indications from CEX’s forums suggest that customers were informed overheen the weekend about both the risk of unprofitability spil well spil stipulations ter the customer terms of service related to potential stoppages. On Friday, a CEX spokesperson cited the former when asked about reported customer compensation issues.

Smith told CoinDesk:

“Our decision is based on the fact that wij pay for maintenance te [US dollars], and mine bitcoins, and if you do the math – you will see that with the next mining difficulty rise – maintenance costs will be greater than the profit from mining.”

No broader company influence

According to CEX, the company will proceed to honor customer balances for cloud hashing power and previous discussions to secure cheaper resources will proceed. Smith added that clients will also have the option to turn on their cloud mining capacity should they choose.

Smith acknowledged that CEX had foreseen the risk of unprofitable mining, and said that the company is actively seeking solutions to both address the problems related to its cloud mining unit, spil well spil proceed to shove development of both its cryptocurrency exchange and mining pool, GHash.io.

“Now wij are going to concentrate all our resources on building out the best crypto exchange and on the search of hardware providers and cheap tens unit,” he said.

He added that CEX has no plans to significantly adjust its operational strategy ter the wake of the cloud mining suspension, tho’ he noted that the company could be impacted ter the long term spil it moves to diversify its services.

Customers react

Smith’s announcement on Twitter elicited a response from observers and customers, prompting some to speculate about CEX’s future and what led to the cloud mining stoppage.

Signs from the CEX marketplace for hashing power suggest that some customers may be selling their holdings ter the wake of the suspension. Questions have also bot raised about whether or not other companies that suggest cloud mining services have bot impacted by the latest druppel ter the price of bitcoin.

News of the suspension among the broader community has bot met by a combination of dismay and frustration. On the company’s official forum, one customer said that the suspension should have bot waterput te place before the problems worsened, writing:

“Maintenance costs are just too high. No profit can be made. Heck, I wasgoed losing money by wielding GHs from CEX. Even worse, I sold all of my GHs and, because I had extra hashing power from referrals, I wasgoed still losing money.”

“I have faith that CEX will rebound from this,” the user added. “But, thesis exorbitant fees have got to switch otherwise it’ll be the end of CEX.”

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

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