By
Bena Ilyas
April 25th, 2024
The current market conditions have made Japanese e-commerce conglomerate DMM.com Ltd. Take a decision to shut down its crypto mining business.
A little bit more than a year ago crypto mining achieved enormous popularity. Individuals were creating their private mining farms, entrepreneurs were opening new mining companies and already existing enterprises were launching new divisions to deal with Bitcoin mining.
But now when the market situation has changed, numerous companies have taken a decision to shut down their mining activity. One of the companies that also was affected by this trend and then was obliged to quit this business is Japanese e-commerce conglomerate DMM.com Ltd.
Back to 2017: Mining Farm
In September 2017, DMM, one of the largest e-commerce sites in Japan, announced its plans to launch a large-scale cryptocurrency mining farm. It also revealed its goal to become one of the world’s top-10 major mining farms by the end of 2018 and then to occupy a position among the top-3 largest mining farms.
The company was going to mine the major cryptocurrencies including Bitcoin (BTC), Ethereum (ETH) and Litecoin (LTC). And in February 2018, it began its mining activities at a large-scale farm in the city of Kanazawa, the capital of the Ishikawa Prefecture.
Some months later, in April, there were even plans to open a so-called showroom to demonstrate how 1,000 mining machines on a 500 square meter site were working. Nevertheless, due to security concerns and theft risks, the decision was reversed.
Declining Profitability of Mining Business
Though some time ago it seemed that crypto mining would thrive forever, these forecasts haven’t been translated into reality. The feasibility of operating large-scale mining farms has decreased dramatically pushing companies to take serious measures.
As it has become known, DMM is going to dismantle mining operations. It is believed that this decision was taken in September 2018, nevertheless, the initial steps to quit this business, including selling the mining hardware owned by the company, are scheduled for the first half of 2019.
According to DMM, currently, it is not the best time to try to encourage new cryptocurrency traders to join the industry due to the ongoing bear trend and people’s fear to become victims of hackers (as it occurred at the beginning of 2018 with Coincheck clients). As a result, it has become practically impossible for large mining farms operators to survive.
Nevertheless, there is no information whether DMM is going to close its regulated cryptocurrency exchange that was launched a year ago.
Other Companies Quitting the Game
It’s also worth mentioning that DMM is far not the first company to quit crypto mining these days. Just some days earlier, Japanese internet giant GMO Internet Group informed that it would cease developing, manufacturing and selling Bitcoin miners due to high losses in Q4 2018.
In general, according to officially revealed data, at least 100,000 individual miners have shut down since early September 2018.