Genesis Mining Offers Users Discounted BTC Contract Upgrades to Avoid Termination

  • Genesis Mining recently decided to offer discounts for contract upgrades, so users won't see their contracts get terminated.
  • This because of the bearish trend that has been affecting the crypto market, and the increasing mining difficulty.

Genesis Mining, the world’s largest cryptocurrency cloud mining provider, has recently revealed its bitcoin mining contracts are no longer profitable because of the bearish trend most cryptocurrencies have been enduring. As an alternative, it’s offering users a contract upgrade at a discount.

According to a recently published blog post, Genesis Mining has been paying attention to its users’ concerns regarding their mining rewards. The company noted, however, it is only able to influence the infrastructure it uses to mine, not bitcoin’s price or mining difficulty.

The bearish trend that saw bitcoin, the flagship cryptocurrency, drop from a near $20,000 all-time high in mid-December to about $6,500 at press time, coupled with a “heavily rising difficulty around April and May” saw rewards dwindle.

As a result, some user contracts are now mining less than the daily maintenance fee requires to be covered, and thus they entered the 60 days grace period, after which open-ended contracts will get terminated.

Genesis Mining

The 60-day grace period is mutually agreed upon by Genesis Mining and its users when contracts are sold. It starts whenever mining rewards go below what it costs Genesis Mining to maintain the infrastructure used in the user’s contracted hashrate. If after the period the market doesn’t recover, and the user’s mining power remains unprofitable, the contract is terminated.

To give users a chance of maintaining their contracts Genesis Mining lowered the price of its premium service Radiant. It essentially converts the contract from open-ended to 5 years with no termination, and reduces maintenance fees to $0.14 a day.

As CryptoGlobe covered the bearish trend also affected other cloud mining companies. Hashflare, one of Genesis Mining’s biggest competitors, terminated users’ active bitcoin mining contracts for the same reason last month.

Notably Genesis Mining managed to stay profitable for longer than Hashflare. The company, known partly for its BTC awareness campaign that targeted Warren Buffett, has earlier this year shown faith in EOS by becoming a block producer.

While some users may upgrade the service, others could get lucky if they don’t. According to bitcoin bull Max Keiser, the flagship cryptocurrency’s “price follows hashrate.” Its hashrate is, according to available data, at over 50 exahash, up from 5 in only 12 months.

Overstock CEO Sells Shares in His Company to Invest in Blockchain Projects

Patrick Byrne, the chief executive officer of Overstock.com (OSTK), has recently lashed out at investors who questioned his sale of 900,000 of his ‘founders shares’ in the company. Justifying his move, he revealed he needed the funds to invest in blockchain projects.

According to Business Insider, Byrne recently sent a letter to shareholders after the company’s stock prices plunged over 21% this week to their lowest since 2012, after he revealed he sold 500,000 of his shares earlier this week.

On Friday, the CEO revealed he sold an additional 400,000 shares, meaning he sold over 15% of his stake in the company. Although Overstock’s shares recovered on Friday, May 17, Byrne’s letter to shareholders was notable. In it, he wrote:

I simply had to supplement my nominal salary with stock sales in order to fulfill personal commitments to invest personally in blockchain projects such as Medici Land Governance, along with a need to meet charitable pledges.

The CEO added that he doesn’t plan on giving such an explanation again, justifying that he owes shareholders “staying within the law and not making decisions based on inside information, not explanations of my life and projects outside Overstock.”

He noted that the “unanticipated stir” caused by his sale was unexpected, and added “I had no idea that shareholders would demand explanations of why and how I might want to use my cash derived from my labor and my property to pursue my ends in life.”

Byrne is notably Overstock’s largest shareholder, and noted he told investors a year ago he would be making “significant sales” to fund different projects, including those related to blockchain technologies and, presumably, cryptocurrencies.

In fact, the libertarian sold 775,000 of his shares in September of last year, before this week’s sale. The stock’s price has fallen roughly 90% from its record high in January of 2018, when Overstock was benefitting from its cryptocurrency ventures and accompanying the cryptocurrency market’s performance.

In November of last year, Byrne revealed he had plans to sell Overstock’s retail business and go “all-in” on cryptocurrencies and blockchain technology. The CEO’s plan would see the company focus on its fully-owned subsidiary Medici Ventures, which has been invested in blockchain-related startups, after selling its retail business.

Overstock's price performance over the last two yearsSource: Yahoo Finance

Byrne has notably been battling short sellers targeting Overstock, as the firm competes with the likes of eBay and Amazon. Financial analytics firm S3 Partners has estimated short bets against it stand at $157 million, or 50% of its float. This makes it more targeted by short sellers than 99% of companies in the U.S.

Despite the company’s performance on exchanges, Overstock has since launched its tZERO security trading platform, and was one of the first companies to pay a “portion” of its taxes using bitcoin in Ohio.