BTC Guild Shutting down for Good, Cites Risks, BitLicense

Bitcoin mining pool BTC Guild has reverted to its original decision to shut down, citing the continued risks of doing business and the finalized BitLicense.

The pool currently contributes to approximately 2% of the total network Hash Rate Hash Rate A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain A hash rate is the measure of a cryptocurrency miner’s performance and a key security metric. In the context of mining, the more hashing or computing power in a given network, the greater its security and its overall resistance to attackMining hashrate is a key security metric. The more hashing (computing) power in the network, the greater its security and its overall resistance to attack. Hash rate is also a measurement of the output of a device that is used to add transactions to a blockchain Read this Term, a decline from prior years.

Last year, it first floated its plans for closure. The pool's operator, Michael Marsee, was concerned about the risk of successful attack against it. He also pointed to the unfolding of Regulation Regulation Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Like any other industry with a high net worth, the financial services industry is tightly regulated to help curb illicit behavior and manipulation. Each asset class has its own set of protocols put in place to combat their respective forms of abuse.In the foreign exchange space, regulation is assumed by authorities in multiple jurisdictions, though ultimately lacking a binding international order. Who are the Industry’s Leading Regulators?Regulators such as the UK’s Financial Conduct Authority ( Read this Term in the US. The costs of compliance can be prohibitively high, and even if the pool can be compliant with New York's BitLicense, "there are 49 other states which can put their own spin on things."

However, he later decided to keep the pool operating, apparently upon the request of supporters.

His original decision now appears to be final. He again referred to the BitLicense regulations, now finalized, which would require transmitters of bitcoin to obtain specialized licensing. He explained:

"Additionally, the NYDFS BitLicense regulations have now become finalized, and the final regulations have enough gray area that BTC Guild is at risk. The fact that BTC Guild is not in New York does not matter, since it would be doing business with New York residents while they are physically in New York. This fact makes it possible for New York to attempt to claim jurisdiction to enforce regulations. Whether or not BTC Guild could win in defense of such an attempt is irrelevant, since the cost of defending the pool would be greater than any income the pool is expected to generate going forward."

He also reiterated the risks of attack, saying, "The amount of funds at risk in the event of a compromise is significantly higher than what the pool could ever recover from."

He also mentioned his growing concern over attempts to defraud pools. He said that BTC Guild's luck has declined for over a year, unable to solve blocks with the same success it held previously. He speculated if it's just bad luck, a small bug in older miners, or a large pool trying to hurt the competition, its activities impossible to detect.

He also ruled out the pool's sale because of his personal attachment to the project and concern over user privacy and security. "There is no (reasonable) price the pool would be sold for," he added.

He recommends members to move to the following pools: BitMinter, Elgius, Kano CK Pool and P2Pool.

The pool will shut down by the end of this month, with members having until September 30 to withdraw funds.