Genesis Mining -The cloud mining service provider wants to terminate mining contracts with little or no profit. The reason given for this is that the company mentions the descent of Bitcoin as well as an increase in the mining difficulty. For the customers of Genesis Mining, however, there is still the possibility to switch to a higher-endowed contract.
Genesis Mining is a service provider offering cloud mining services. In doing so, the customer can rent mining capacities from provided computers and provide them for mining cryptocurrencies. Many of these cloud mining companies maintain so-called mining farms, which, thanks to the economies of scale, work much more efficiently than smaller, private miners. The client is then rewarded for his investment with a portion of the profits generated by the mining.
Mining becomes less profitable – The business model is shaken
But what happens if these profits fail? Genesis Mining had to do this experience in the last few weeks and months. As the company announced in a blog post , the business for miners has become tougher since the end of last year. This is also reflected in the revenues of customers, which are lower than assumed at the time of the investment. This development leads to disappointment and frustration.
However, as a cloud mining provider, Genesis Mining cannot influence all the factors of the mining rewards. In addition, Bitcoin course and Mining Difficulty elude the influence of the provider. Only the infrastructure is controlled by Genesis Mining. In this field, one is still well exhibited with the mining farms in Iceland.
Genesis Mining takes consequences – Unprofitable contracts are cut
In the other two fields, however, the market for the cloud mining provider did not perform well. Genesis Mining blames the continued decline of the Bitcoin – or rather the entire crypto market – in conjunction with the increase in mining difficulty in April and May for the meagre yield.
Therefore, some customer contracts currently generate less profit than they claim for maintenance costs. That’s why Genesis Mining has decided to turn the unprofitable contracts into a 60-day transitional period. If these 60 days end, the contracts expire automatically – even if they were previously indefinite.
Escape with an upgrade notice
Customers looking to continue mine, mines at Genesis Mining can still save their ongoing contracts. So the team offers an upgrade of the Bitcoin mining contracts to so-called Radiant contracts. These run with a fixed term of 5 years instead of the previously valid indefinite term. In addition, the price per 1 TH / s is reduced from 285 US dollars to 180 US dollars. Thus one takes into account the market situation and calculates henceforth more carefully.