In today’s edition of The Daily, we cover a reflection on the passing year by the cryptocurrency mining technology giant Bitmain, a mobile app released by social network Memo and new turnover figures from a Bitcoin ATM network in Australia.
Bitmain Reflects on 2018
Bitmain, the Beijing-headquartered bitcoin mining technology giant, has been the topic of many discussions recently relating to its IPO application process, downsizing and more. A lengthy new blog post the company published today touches on these subjects and highlights some of the milestones the company has achieved in 2018. These achievements include the development of a 7nm ASIC chip for SHA-256 mining, launching hardware for powering artificial intelligence applications, investing in Circle and funding open-source projects.
The Bitmain team explains that the consolidating actions they took recently were done to make the company leaner, more focused and to streamline the business in preparation for the challenges of the future. “Our wide portfolio and varied lines of work have expanded to a point where we have the problem of choice and this year was the time to choose. We started to optimize the business and streamline our flows to focus back on the core missions and activities that best rally behind our vision. We as a company will be lean and more focused towards our goals and we look forward to a 2019 where we can see what our collective efforts can achieve in this manner.”
The company also made this comment about the contentious BSV fork: “It goes without saying that the BCH and BSV split was a significant topic within the global cryptocurrency space last year. It was exciting to see different passions clash for the future and betterment of cryptocurrencies without the purported ‘hash war’ being fought. Having ourselves been through a similar (but much longer!) conflict over the future of Bitcoin just about 18 months back, we understand the BSV community’s decision to split and freely pursue its own dream. Adoption will come through power, flexibility and sophistication of the ecosystem and we look forward to what 2019 has in store for cryptocurrencies.”
Memo Releases Mobile App
BCH-based social media network Memo.cash has released a mobile app on Sunday. The first app is designed for Android devices but the developers promise that an iOS version is coming soon too. Reactions to the announcement on the platform itself are positive and so are the few reviews already on the Google Play store.
If you are not yet familiar with it, Memo.cash is a decentralized app powered by Bitcoin Cash blockchain technology. It gives users the ability to create a profile and post messages, images and videos using hashtags as well as to give tips instead of just likes. With Twitter being infected with scammers and bots, supporters hope that the growing platform will be able to provide an alternative and releasing a mobile app is a step forward in the long road that it will take.
Australian ATM Network Sees ‘Insane’ Turnover
According to a newspaper report from down under, a local Bitcoin ATM network with only about 30 machines is now handling volumes of $2 million a month. This is despite the fact that the company failed to raise a targeted $30 million in an initial coin offering (ICO) due to the market cool-down.
“We raised just shy of $2 million, so just over 5 per cent of our initial goal – the rollout didn’t work out as we hoped,” Sam Karagiozis, the founder of Auscoin, told Daily Mail Australia. “But we currently have 31 Auscoin ATMs in Australia… and our turnover is $500,000 a week, which is just insane considering how much the price of Bitcoin has dropped. It just shows there really is a market for it and cryptocurrency is seen as a way of the future for many.”
What do you think about today’s news tidbits? Share your thoughts in the comments section below.
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Here’s what happened this week in Bitcoin in 99 seconds.
Mining giant, Bitmain, is closing another office in Amsterdam and they are also halting its mining operation in Texas. While bad for Bitmain, these developments are actually improving decentralization in the Bitcoin mining space. Currently, only the BTC.com mining pool controls more than 11% of the total hashrate.
South Korea’s government will offer tax breaks to its blockchain companies. Blockchain companies in the country will receive between 20 to 40% tax relief on their R&D expenditure, encouraging innovation.
Speaking of tax, Denmark’s tax agency will be examining the records of local crypto exchanges to ensure that their users are paying taxes on crypto profits.
New Zealand crypto-only exchange, Cryptopia, have been hacked after being offline for a full day. Trading is suspended while police investigate the hack, which seems to have affected ETH and ERC-20 tokens in the exchange’s hot wallet. Total losses are unknown at this stage but are estimated to be in the millions of Dollars.
Coinstar kiosks in grocery stores across the US will begin vending Bitcoin vouchers. Thousands of Coinstar machines will accept up to $2,500 in paper Dollars for Bitcoin purchases.
Finally, ShapeShift’s CEO, Erik Voorhees, revealed that in 2018 his exchange had assisted law enforcement agencies around the world with information requests on transactions. Shapeshift recently changed its policies to require identity verification for KYC purposes. Competing quick exchangers without KYC include Flyp.me and Changelly.
That’s what happened this week in Bitcoin. See you next week.
While 2019, the purported year that the Bitcoin ecosystem would undergo a turnaround, is in full swing, crypto startups have continued to fall on bad times. Most recently, a London-based, multi-faceted company revealed that “staff reductions” had taken place, likely catalyzed by the tumult in crypto markets.
Bitcoin Exchange BlockEx Purges Staff In “Reduction”
As Bitcoin peaked at $20,000, BlockEx, a London-headquartered upstart with visions of grandeur, launched its token sale. BlockEx was marketed as a platform for issuing tokens, but, the firm quickly broadened its horizons to facilitating crypto asset exchange. And, in an ecosystem often filled to brim with uninspired products, BlockEx’s ambitions caught on. In the months that followed, the company secured over $24 million for its DAXY token, which would give holders special access to some of BlockEx’s offerings.
Yet, in a comment given to CoinDesk, chief executive Adam Leonard divulged that “staff reductions” had occurred at his firm. Divulging the rationale behind this business decision, Leonard explained that the cuts were mandated to extend BlockEx’s financial runway, especially as some of the firm’s ventures have begun to wind down and/or lose steam. Yet, he remained optimistic, noting that his company has some good news to tout in coming weeks.
Not The First, Nor The Last
As hinted at earlier, BlockEx’s “staff reduction” is yet another crypto firm that has had to make tough decisions, especially amid this Bitcoin rout, rife with volatility and so-called “choppy waters,” as recently put by Pantera’s Joey Krug.
Just last week, per previous reports from NewsBTC, Blockfolio, the company behind a world-renowned crypto-related mobile application, revealed that it too made cuts. More specifically, in an interview with The Block, chief executive Edward Moncada noted that it had cut four employees, reducing its headcount to 37. Moncada also confirmed that Blockfolio would be putting Datablock, an affiliated venture focused on providing data rights for consumers, on the proverbial backburner.
Days prior to the Blockfolio news, Erik Voorhees, dubbed “Bitcoin’s last gunslinger” by Forbes’ Crypto team, took to his company’s blog to reveal that ShapeShift, the startup behind an exchange that shares its name, CoinCap, and KeepKey, laid off 37 employees — one-third of the startup’s team.
Weeks earlier, Bitmain, one of the world’s most valuable crypto companies, saw its insiders claim that the firm would be shutting down its mining operations, cutting upwards to 1,350 employees (half) in the process. Per sources, Beijing-based conglomerate will also be losing its co-CEOs.
Dovey Wan, a pro-Bitcoin partner at Primitive Capital and Chinese crypto insider, explained in late-December that she expected for more layoffs to arrive after 2018’s holiday season. In a tweet, centered around Bitmain’s ongoing qualms, Wan explained that once the “employment and human resources cycle kicks in,” other industry upstarts will begin to purge under-performing/costly staffers.
And interestingly, as made apparent by the BlockEx imbroglio, her quip came true. Considering her comment, BlockEx’s situation isn’t likely to be the last of its kind. But what firm will be on the chopping block next?
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According to a note sent to its customers on its Telegram Support Group, Giga Watt, a provider of cryptocurrency mining services, has reportedly shut down its day-to-day operations. Moths after its Chapter 11 bankruptcy filing, the company, which has only been operating or a little over a year, has finally closed its doors.
The statement from the company reads:
As was reported in November of 2018, Giga Watt voluntarily filed with the Bankruptcy Court seeking debt relief and reorganization. Subsequent to the filing, day to day operations continued until now. At present, both access and power to the facilities in which Giga Watt operates have been closed to the company.
Giga Watt went on to note that those who have completed their know-your-customer verification can withdraw the remaining crypyocurrencies left in their wallets, although this window closes in March.
In conclusion, the mining firm assured clients that any change to its situation will be communicated to customers, in due time. The closure has been shocking for its clients. While customers knew about the company’s debt situation, no one thought a complete shutdown was imminent.
Giga Watt and Its Unconventional Business Model
Giga Watt was established in September 2017 via an initial coin offering (ICO). Since it launched, the mining company has prided itself on its ability to provide inexpensive alternatives for crypto miners, regardless of their scale. The company claimed that it was able to generate affordable electricity, which was offered to clients for their daily mining operations.
However, the company had a business model that was slightly different from that of other manufacturers of crypto hardware. With Giga Watt, customers maintained ownership of the mining hardware, while the company earned maintenance fees from the client’s mining rewards. Also, clients were informed via Giga Watt’s customer support page on Telegram that they could make payments to have their mining hardware shipped to their homes.
The bitcoin mining company offered much more competitive rates on utilities such as electricity, and this turned out to be unsustainable, especially considering the crypto winter.
Chapter 11 Bankruptcy
Just two days before the company made its formal bankruptcy announcement; customers were reportedly having issues with their miners. Reports surfaced of miners suddenly shutting off, with no explanation from the company seemingly likely. Upon inquiries, customer care representatives of the company had assured clients that all was well. However, when the company declared for bankruptcy, related documents showed that the company’s issues stemmed majorly from non-payment.
Giga Watt eventually filed for bankruptcy on November 11, 2018, at a Washington court. According to the filing, it was revealed that the company owed 20 of its largest unsecured creditors a total of $7 million.
Some of these creditors included Neppel Electric, which had a claim of almost $500,000, and a utilities provider in Douglas County, which was owed $310,000.
Besides, the company’s total assets were an estimated $50,000, while its total liabilities ranged between $10 million and $15 million.
Bitmain Leaves Texas
The crypto winter has continued to impact crypto-based businesses. Earlier this week, Blockonomi reported that mining hardware manufacturer Bitmain would be shutting down operations in its Rockdale, Texas plant. The company, which recently went through a major reshuffle that ended with the replacement of its two co-CEOs, has revealed its intention to shut down its $500 million mining plant, which was opened in August 2018.
Bitmain has been shutting down its international offices of recent. The crypto hardware manufacturer had previously packed up Bitmaintech Israel, the blockchain development center that developed the Connect BTC mining pool. It also confirmed reports it would be closing down its Amsterdam office, as a spokesperson for the firm, said the closure was necessitated by the need to remodel the company’s business framework.