Cryptocurrency mining is experiencing a setback due to hyped-up power prices. As a result, mining businesses are either shutting down or resorting to illegal activities and facing lawsuits.
Chipmakers as Nvidia Corp and Taiwan Semiconductor Manufacturing Co who supply to the mining industry and Bitmain Technologies Ltd the renowned mining-rig designers, pursuing ICOs are suffering from the decline in mining.
Bitmain is facing a lawsuit for more than $5 million for unauthorized crypto mining. Gor Gevorkyan, a Los Angeles County resident filed a suit at the Northern District of California federal court against Bitmain’s US and China-based entities for pulling power supply from customers without their knowledge. Bitmain’s ASIC devices were preconfigured to use their customer’s electricity for cryptocurrency mining for Bitmain’s benefit, and not their customer’s.
The document further reflects that more than 100 class members were involved and the debatable aggregate amount is over $5,000,000 not including the fees, cost or interest. Gevorkyan had purchased Bitmain ASIC devices as the AntMiner S9 to mine Bitcoin and ended with large electricity bills.
The unfair business practice continued until Gevorkyan’s personal cryptocurrency account was linked with the ASIC devices. Gevorkyan and others involved have asked for full restitution for the unlawful practices and an order for Bitmain to “cease the acts of unfair competition alleged” and interests at the highest allowable rate and costs and fees, as noted by Coindesk.
JPMorgan Chase & Co. stated that some are losing money in the mining industry due to falling Bitcoin Prices. “This suggests that prices have declined to a point where mining is becoming uneconomical for some,” Nikolaos Panigirtzoglou, JPMorgan strategists wrote in a Nov. 23 report, as noted by Business Tech. Those who survive the decline in cryptocurrency mining would eventually benefit, notes Ryan Rabaglia from cryptocurrency dealing firm OSL, Hong Kong.
Bitcoin miners feel threatened to shut down due to high electricity bills primarily as evident from the November drop in hash rate by 24% as against August peak, as per Blockchain.com. It takes $7000 to mine one Bitcoin with Bitmain’s Antminer S9, as reported by Fundstrat Global Advisors.
The cryptocurrency mining continues to suffer from the hype in electricity prices which is affecting the company.[The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views and/or the official policy of the website. ]