CEX.io Suspending Cloud Mining Service as Weak Bitcoin Prices Take Their Toll

Weaker Bitcoin Bitcoin While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that While some may still be wondering what is Bitcoin, who created Bitcoin, or how does Bitcoin work, one thing is certain: Bitcoin has changed the world.No one can remain indifferent to this revolutionary, decentralized, digital asset nor to its blockchain technology.In fact, we’ve gone a long way ever since a Florida resident Laszlo Hanyecz made BTC’s first official commercial transaction with a real company by trading 10,000 Bitcoins for 2 pizzas at his local Papa John’s.One could now argue that Read this Term prices and rising mining difficulty have claimed one of the most prominent mining pools as their next victim.

CEX.io facilitates bitcoin and mining contract exchange and operates a large mining pool through its Ghash.io arm. The latter service, once the most powerful in the network- at one point achieving 51% of the total hashrate- will be temporarily suspending services. The company wrote in its blog that current bitcoin prices make it uneconomical to continue. According to paragraph 11.5 of CEX.IO Terms of Use:

"Mining with using User’s Gigahashes can be stopped by CEX.IO if the amount of the Maintenance Cost exceeds rewards for each mined block or if the mining is economically inexpedient."

The suspension will take place upon the next difficulty change, which will happen within a few hours. Members will retain their legal rights to hash power, the blog continuing: "Thereby, all GHS formerly purchased by CEX.IO users remain their absolute property, with appropriate figures reflected in users’ profile balance. Additionally users will be able to manually enable mining with Gigahashes by their own choice."

Jeffrey Smith, Chief Information Officer, explained that the suspension was only temporary and that service will resume once more economical hardware was procured:

“Suspension of CEX.IO cloud mining service is only a forced temporary measure, the result of cloud mining costs exceeding mining profit,”“Currently all cloud mining/maintenance costs are directed to the Hardware provider, hence, we are open for negotiations with additional mining hardware providers, who can offer favourable terms. And, as soon as we get an opportunity to upgrade mining hardware, or come to more efficient terms with energy suppliers, cloud mining process will be automatically resumed.”

Ghash currently commands 42 PH/s, or 12%, 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. Their sudden exit from the network will have a meaningful effect on the total hashrate and possibly lead to another difficulty decrease during the following readjustment period.