As 2014 comes to a close, the news in the bitcoin mining industry seems to be as constant as ever. The mining industry as a whole has continued to grow over the course of the year, even as the bitcoin price has not been able to get back to its highs from late 2013. Let’s take a look at some of the biggest news stories in bitcoin mining from the past few weeks.
Bitcoin Mining Difficulty Decrease
In what should be viewed as one of the biggest stories of December, the bitcoin mining difficulty dropped for the first time in roughly two years. Although the drop in difficulty was small — at just 0.62% — it goes to show that all bitcoin miners are not going to continue mining bitcoins at a loss forever. This drop in the mining difficulty came just after the mining difficulty reached a level of 40,000,000,000 for the first time in late November. To keep things in perspective, it should be noted that mining difficulty started out the year below the 1,000,000,000 mark. This means as the price has continued to fall over the course of the year, the mining difficulty has been able to increase by more than forty times from where it started.
Although the drop in difficulty was expected, it should definitely not be viewed as a small story by the bitcoin community. After all, the hashing power on the bitcoin network is what secures the bitcoin protocol and makes it a useful payment system for everyone.
Venezuelan Businessman Purchases HashFast
A large bitcoin mining company, known as HashFast, was recently sold to a mysterious Venezuelan businessman after filing for bankruptcy. HashFast originally tried to auction off their assets to the highest bidder, but the auction turned out to be a failure as HashFast claimed that they were only receiving “lowball” offers. HashFast seemed to be facing problems that have afflicted many other bitcoin mining companies in recent times. Whether self-inflicted or not, it would appear that the large number of unhappy HashFast customers were proof that there were issues with the company’s execution on their business plan.
In an interview with Ars Technica, the Venezuelan businessman, Guido Ochoa, kept most of his intentions to himself. He claimed that he would not be able to give many details to anyone, as he signed a confidentiality agreement with the HashFast Creditors Committee. In a rather strange move, Ochoa has agreed to build new mining boards and sell them back to HashFast at cost.
BitFury Does Not Consider Themselves a Bitcoin Mining Company
BitFury, a company based in Amsterdam, Riga, and San Francisco who is best known for their work in the bitcoin mining market has told CoinDesk that they are a technology company first. Although BitFury may not be the most well-known name in the bitcoin space, the reality is that they have raised more funds than any other bitcoin-related company in 2014, with the exception of Xapo. In fact, 10% of all of the public funds raised for bitcoin companies in 2014 were for BitFury.
The company’s CEO, Valery Vavilov, sees that company getting involved in anything where massive amounts of computing power is needed. Today, there is a need for ASIC devices that can mine bitcoins at an astounding rate, but BitFury will not limit itself to securing the bitcoin network over the long term. In addition to mining bitcoins, Vavilov also sees value in helping out with other emerging P2P technologies and certain aspects of the coming wave of the “Internet of Things.” BitFury also has an investment wing of the company, BitFury Capital, which is used to reinvest the companies profits into other areas of the bitcoin ecosystem.