Genesis Mining wants miners who contribute low hashes to the pool to either stop or sign another five-year contract with the company.
Upgrade your Mining Contract or Leave
In its letter to cryptocurrency miners, Genesis stated that it would no longer continue supporting bitcoin miners with low tier contracts. The price of cryptocurrencies has been sliding downwards constantly since January making bitcoin mining less profitable.
Genesis mining in a Blog post stated;
“Unfortunately Bitcoin went into a downward trend around January. This Trend combined with the heavily rising difficulty factor around April and May reduced mining outputs even further”.
According to Genesis, the price and difficulty factor trends of bitcoin renders some user contracts obsolete. The company stated that these users mine less the daily maintenance fee requirement the pool has set. Miners, who failed to reach this benchmark, are given a 60-day grace period after which open-ended contracts will be terminated.
It should be noted that most cryptocurrency mining pools in their FAQ section clearly states the terms and condition of their mining contracts. The mining client has to agree that if the contract returns less than it costs the pool to maintain its infrastructures, the contract enters a 60-day grace period. However, if market conditions do not improve at the end of the grace period, the contract is terminated.
Bitcoin Price putting Miners at a Test
After reaching its peak in late 2017, the bitcoin price has been in a steady decline forcing many miners out of business. Other mining firms like Hashflare too experienced the same problem as Genesis and had to terminate many mining contracts. However, for the case of Hashflare only Bitcoin contracts were affected, Litecoin, Ethereum, and Dash were not.
Although many mining companies will be forced to close operations due to reduced profits. Genesis is developing a new strategy to encourage miners to upgrade their contracts. The company offers a $105 discount to existing customers who upgrade to its premium service Radiant.
Although Bitcoin price could not improve anytime soon many bitcoin enthusiasts are still certain that better days are still ahead.
You can also subscribe to our newsletter to get more recent updates.