Mining Roundup: Stops Cloud Mining Service, CoinTerra Sued for $5M and Other News

Check out a round-up of the latest news concerning bitcoin mining.

Photo: Marko Ahtisaari/Flickr

Photo: Marko Ahtisaari/Flickr

Bitcoin mining can be an extremely profitable business with the right equipment and the right information. However, it is also a fast-moving and highly competitive field. New technology is constantly being developed and released, making mining an ever-harder undertaking. The more mining power is brought to the network, the less chance any given miner will have of securing a profitable amount of the limited daily supply of new bitcoins. Since the development of the first ASIC miners, the total network power has increased exponentially. The Difficulty rate rose over 400 times in 2013 alone, from 3 million to 1.4 billion, and another three times over to 5 billion in the first three months of 2014. As of January 12th, 2015, it has reached almost 44 billion. Besides, several changes has been recently noticed concerning the performance of bitcoing mining companies. Stops Cloud Mining Service Due to Low Bitcoin Price

Bitcoin trading platform and exchange CEX.IO has announced a temporary suspension of its cloud mining activities on January 12th. The company has blamed decreasing revenues against a plunging bitcoin price. Before the suspension, the company’s customers experienced destabilization to their cloud mining service, which CEX.IO at that time referred to third-party difficulties.

CEX.IO customers and bitcoin mining enthusiasts have shared their opinion on the company’s official forum.

“Maintenance costs are just too high. No profit can be made. Heck, I was losing money by owning GHs from CEX. Even worse, I sold all of my GHs and, because I had additional hashing power from referrals, I was still losing money,” commented one customer, meaning that the suspension should have been established before the problems worsened. “I have faith that CEX will rebound from this. But, these exorbitant fees have got to change otherwise it’ll be the end of CEX,” he added.

According to the report of the company’s chief information officer Jeffrey Smith to CoinDesk, operations would resume if the price of bitcoin climbs above $320, calling the move “temporary”. Besides, CEX.IO continues operating as full service exchange platform for trading digital currencies and fiat money.

CoinTerra Sued by C7 Data Centers

Meanwhile, CoinTerra is being sued by C7 Data Centers for alleged breach of contract and for $1.4m worth unpaid services. In court documents, C7 Data Centers alleges that former partner CoinTerra acted in bad faith by intentionally underpaying for services and demonstrating a pattern of late repayment. In total, C7 is seeking $5.4m in damages, court fees and related charges.

According to court documents, CoinTerra signed an 18-month agreement with C7 Data Centers in early April to maintain hosting services and data center colocation. In accordance with a treaty, CoinTerra was also supposed to manage and supervise the data centers. C7 Data Centers claims that CoinTerra was intentionally underpaying for services and demonstrating a pattern of late repayment. In total, the company is soliciting $5.4m in damages, court fees and related charges.

The court recordings follow unconfirmed reports that CoinTerra is seeking to resolve problems with unknown senior debt holders.

Mining ASICs Technologies Declared Bankrupt

Bitcoin ASIC Manufacturer Mining ASICs Technologies (MAT) was claimed bankrupt by a Maastricht judge on December 30th, 2014, one week after the company CEO Marc Coumans announced bankruptcy.

Business seemed to turn bad for MAT in September, the time when its machines were supposed to be shipped. Scam accusations began to appear. Customers collected accusations of fraud and false advertising, claiming that Coumans intentionally lied about the speed of the chips.

They even affirmed that there was no established partnership between MAT and Dream Chip Technologies (DCT). However, DCT neither confirmed nor denied its collaboration with MAT. Besides, by the end September only a small part of MAT customers had received their machines.

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