Crypto miners are looking at exit strategies during this market crash. Many companies are no longer finding it viable to pay for the consumption of vast amounts of energy to produce continually dwindling valued cryptos.
Crypto mining is by computers who continuously solve a difficult algorithm in exchange for cryptocurrency. The blocks mined come at the cost of a massive amount of electricity. The huge energy bill is created intentionally, as it helps prevents the network from becoming centralized, and less prone to hacking. This is due to the fact that the decision-making power in Bitcoin is centered around an agreement between miners to help secure the network.
This year has seen a huge drop in Bitcoin, from its heights back in December 2017, nearly at $18,000, the flagship digital asset is now dangerously close to $4,000. This has lead to Giga Watt, a Washington-based mining equipment sale and rental service, to file for bankruptcy on November 19, 2018.
Giga Watt had raised $20 million through its ICO back in June 2017 for its WTT token. The tokens extended holders the right to utilize “ Giga Watt processing center’s capacity, rent-free for 50 years, to accommodate 1 Watt’s worth of mining power consumption.” This right, however, could not be delivered due to the market crunch. The repercussions saw investors taking Giga Watt to court from selling unregistered securities and rescission of contract.
If the market continues its downward spiral, even profitable mining operations could be next up on the chopping block. As for now, many believe these operations are short-sighted for closing doors and selling off their equipment, as the speculate, that these mining companies will coming rushing back as the market corrects.