Genesis mining has announced the imminent shutdown of open-ended Bitcoin mining contracts. The cloud mining service platform has advised users to migrate to a five-year BTC mining contract instead.
Users Must Switch to Five-Year Bitcoin Mining Contracts
In a blog post published yesterday, the Iceland-based company announced that it would terminate open-ended contracts for Bitcoin mining clients who are unable to earn enough funds to cover the maintenance fees. According to the announcement, the termination will come into effect at the end of a 60-day grace period.
As a result, clients who wish not to have their contracts terminated have been advised to migrate to the platform’s five-year mining contract. This five-year contract is a premium mining contract, and it does not have an early termination option.
As a way of incentivizing its users to adopt the new contract paradigm, Genesis plans to offer a substantial discount for the premium account upgrade as well as the daily maintenance fee. Instead of a price of $285 per TH/s for the Radiant Bitcoin Mining package (the premium account), users will now pay $180. The daily maintenance fee has also been pegged at $0.14.
According to the announcement, the decision to offer these discounts is part of the company’s commitment to helping its clients through the difficult bear market conditions in the cryptocurrency industry. Genesis also believes that the present malaise will soon end, and the good times will roll in again for BTC miners. Hence, the company thinks that it ought to put some measures in place to help miners stay afloat.
Suggested Reading: Learn more about Bitcoin mining in our ‘What is Bitcoin?‘ beginner’s guide.
Bitcoin Price Decline Affecting Mining Profitability
Genesis isn’t the first cloud mining platform to cancel its BTC mining contract. In July, Hashflare shut down its services, citing the same reason as Genesis: the inability of miner earnings to cover the maintenance fees.
At the heart of the problem is the increase in mining difficulty while the price of the asset continues to decline. Since the start of 2018, the price of BTC has been on a downward spiral. After hitting its all-time high price of $19,700 in mid-December, the top-ranked cryptocurrency plunged to less than $6,000 in February 2018.
Between April and May 2018, there was a significant increase in the mining difficulty making the BTC mining business even less profitable.
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