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Swan Bitcoin capitulates, BTC miners shrink, consolidation grows, fears mount
The post Swan Bitcoin capitulates, BTC miners shrink, consolidation grows, fears mount appeared on BitcoinEthereumNews.com. BTC’s block reward mining concentration got a little more concentrated this week, amplifying concerns about the future of the network’s proof-of-work consensus mechanism. On July 22, Cory Klippsten, CEO of the California-based Swan Bitcoin financial services firm, announced that his company “is unlikely to continue with our Managed Mining business in the near term.” Klippsten added, “[w]ithout the expectation of significant near-term revenue from our Managed Mining unit, we are pulling our plans to IPO in the near future.” Worse, Klippsten warned that the derailment of its plans for an initial public offering meant “staff cuts across many functions.” The scale of these cuts wasn’t detailed. Klippsten praised his former staff as “some of the best” and vowed that he “will be doing my best to help them find new roles” in the ‘crypto’ sector. While Swan has been actively mining since last summer, it had only announced its Managed Mining service launch a few months ago. The launch promoted Swan’s ability to “take a large amount of capital and deploy it quickly and efficiently into a mining operation owned by the investor that meets their particular strategic requirements.” Given Klippsten’s pessimism regarding ‘significant near-term revenue’ generation, it now seems that the Managed Mining unit’s not-so-unique selling point was its ability to take a large amount of capital and light it on fire. That’s not a knock on Swan, merely a reflection of the ugly truths affecting the entire BTC block rewards mining sector. Since the scheduled ‘halving’ of the block subsidy this spring, the economics of BTC mining no longer add up. Even as the BTC token’s fiat value has recovered much of the losses it endured over the past couple of months, it’s still not always high enough to cover the huge electricity costs of successfully mining a…
The post Swan Bitcoin capitulates, BTC miners shrink, consolidation grows, fears mount appeared on BitcoinEthereumNews.com.
BTC’s block reward mining concentration got a little more concentrated this week, amplifying concerns about the future of the network’s proof-of-work consensus mechanism. On July 22, Cory Klippsten, CEO of the California-based Swan Bitcoin financial services firm, announced that his company “is unlikely to continue with our Managed Mining business in the near term.” Klippsten added, “[w]ithout the expectation of significant near-term revenue from our Managed Mining unit, we are pulling our plans to IPO in the near future.” Worse, Klippsten warned that the derailment of its plans for an initial public offering meant “staff cuts across many functions.” The scale of these cuts wasn’t detailed. Klippsten praised his former staff as “some of the best” and vowed that he “will be doing my best to help them find new roles” in the ‘crypto’ sector. While Swan has been actively mining since last summer, it had only announced its Managed Mining service launch a few months ago. The launch promoted Swan’s ability to “take a large amount of capital and deploy it quickly and efficiently into a mining operation owned by the investor that meets their particular strategic requirements.” Given Klippsten’s pessimism regarding ‘significant near-term revenue’ generation, it now seems that the Managed Mining unit’s not-so-unique selling point was its ability to take a large amount of capital and light it on fire. That’s not a knock on Swan, merely a reflection of the ugly truths affecting the entire BTC block rewards mining sector. Since the scheduled ‘halving’ of the block subsidy this spring, the economics of BTC mining no longer add up. Even as the BTC token’s fiat value has recovered much of the losses it endured over the past couple of months, it’s still not always high enough to cover the huge electricity costs of successfully mining a…
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