With just over 13 million bitcoins mined – a milestone achieved earlier this month – the mining sector is showing few, if any, signs of slowing.
In fact, the past month has shown a new level of activity and awareness in the space, particularly regarding the key issues: scalability, network share and the future infrastructure that will deliver more bitcoins to the system. As Bitcoin Foundation executive chairman Jon Matonis wrote, recent events all point to one overarching outcome: more communication between miners and those with a vested interest in seeing the network succeed.
But beyond the ongoing debate about the 51 percent threat, what else is happening in the mining space? Read on to find out.
Miners set for October meetup in Las Vegas
In what has been dubbed “the first global conference dedicated to cryptocurrency mining”, Hashers United seeks to bring together the various elements of the mining industry for two days in Las Vegas.
Scheduled for 10th-11th October at the Tuscany Hotel and Casino, the event will feature more than 35 talks and workshops focusing on a variety of subjects. These include strategic planning, hardware management and development, investment and legal compliance.
Tim Draper, the Silicon Valley venture capitalist and recent buyer of the 30,000 Silk Road bitcoins, will take part in the conference’s keynote panel. According to the official event website, Draper will discuss the future of digital currencies, including the economic, monetary and legal implications of their development. Other speakers at the event include Charlie Lee, the creator of litecoin, and Vitalik Buterin, founder of the Ethereum protocol.
Hashers United is being organized by Final Hash, a mining contract company based in Houston, Texas. In a statement, the company’s executive technical director, Marshall Long, said that the industry is at a critical juncture and a forum for mining-oriented discussion is needed.
He remarked:
“We’re in contact with miners every day and their needs just aren’t being met via current conferences or even online. It’s time for a ‘real world’ forum where everyone, no matter their experience, can have an open and frank discussion about the key issues they are facing and how as a community we can help each other to overcome them.”
The full agenda – still being released in the run-up to the event – can be found here.
‘Mysterious’ founder of Avalon joins Weibo
The founder of bitcoin hardware maker Avalon has opened a Weibo account and begun interacting with the community.
Known under the moniker ‘ngzhang’, the Avalon founder conducted an online contest timed with the World Cup that saw the distribution of one hundred Avalon products to participants. As reported by Chinese bitcoin news site Bitell, the Avalon leadership seems to want to build new bridges with its customer base.
Most notably, ngzhang promised greater transparency between Avalon’s customers and the company itself. In the past, community members have criticized the company, and its privacy preferring leader, for seemingly failing to take complaints about product issues seriously.
Moving forward, ngzhang pledged to be more responsive to customers, with the social media profile opening and the World Cup-themed giveaway seen as possible diplomatic overtures.
As the Avalon founder said in a Weibo post:
“Finally, no more silence for Avalon.”
BTC Guild declares closure possible
One of the concerns within the community regarding the BitLicense proposal from the New York Department of Financial Services (NYDFS) is the risk that businesses within the space will be forced to shut their doors. At least one bitcoin mining pool, BTC Guild, has acknowledged that possibility in a recent statement to its user base.
BTC Guild currently comprises roughly seven percent of the bitcoin network hashrate, and in the past has represented as much as 15 percent of the network.
The pool operator explained in a 19th July statement that, under the proposed regulations, a mining pool of its size would face significant financial burdens attempting to comply, saying:
“Under the current proposals (subject to public comment and revision), operating a pool within the US will be impossible to do legally without obtaining significant personal information on all users, not just those in the US. There would also be significant financial costs which would exceed the amount of money the pool has generated since inception. Since there is no way anybody will mine on a pool with those requirements, it means that any pool in the US will be forced to shut down, or operate illegally and hope they’re ignored.”
BTC Guild added that, should the regulations be passed, it would be forced to shut down. However, the operator continued, legal counsel is still being consulted and closure is not anticipated at this time.
Bitmain lowers Antminer S3 output estimate
China-based bitcoin mining hardware maker Bitmain has announced that its Antminer S3 mining ASIC will ship with a lower baseline hash rate average.
The company announced in a 14th July post on the Bitcoin Talk forum that instead of the previously announced average of 478 GH/s, the S3 would ship with an average stable rate of 441 GH/s. However, Bitmain said that the devices could be overclocked to the previous number, and that instructions for doing so are forthcoming.
The company explained:
“When we were doing the first mass production, we found that not all of the S3’s DC/DC module could be stable enough to support the 478GH/s speed. After long time testing, all of the S3 run stably at 441GH/s, which however is 7.7% less than the 478GH/s we have announced.”
With apologies for the lowered estimate, Bitmain now offers its customers different options. They can opt to receive a 7.7 percent refund – equivalent to the estimated reduction in hashing power – or a 10 percent discount coupon on a future purchase.
Delivery of the S3 units is underway, with the next batch expected to begin shipping in early August.
Hanging up the miner hat?
Given the rising mining difficulty and the ever-climbing scale of hardware, it’s no surprise that some miners simply can’t afford to stay in business.
A long-running thread on Bitcoin Talk on the topic of shutting down received some recent activity, with several members telling their stories about how they manage to stay open – or finally close their doors and hang up the ASICs, as it were. Some users said that despite their best efforts, keeping the machinery running just didn’t keep up with the electrical costs.
The conversation focused, in part, on whether or not mining profitability for hobby-scale miners will continue. With margins as tight as they are, some users mused that they won’t be able to stay in business if the price of bitcoin continues to fluctuate in the $500-$600 range. Others said that they continue to mine even if they spend more on electricity than they make in bitcoin, citing the hope that the digital currency will grow rapidly in value in the months and years ahead.
One forum member commented that, in spite of shutting down, they didn’t have any bad feeling about their prior investments or the prospect of getting involved again one day.
He said:
“Have fun. It is for fun. I paid off the miners and then some with the earnings, and will see what happens to it. Maybe I will buy another miner or miners at some point.”
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Disclaimer: This article should not be viewed as an endorsement of any of the companies mentioned. Please do your own extensive research before considering investing any funds in these products.
Images via Bitmain, Bitcoin Talk, BTC Guild, Hashers United