Bitclub announced on Monday 8 October 2018 that they will be shutting down their GPU Mining Operation, with a poorly constructed statement distributed to all users. This is the statement as it was received, published here “as is”, word for word, ie. [SIC]:
GPU Mining Pool Freeze
Over the past several months we’ve seen a steady decline in GPU mining profitability and we are now in a situation where it doesn’t make sense to keep the machines running at this time.
What does this mean for GPU Mining Shares?
As of October 1st ALL GPU machines have been powered off and we are freezing all mining payments moving forward. This is not a shut down or a cancellation of your contracts, instead we are freezing them as of September 30th and plan to turn them back on at a later date*.
Right now based on current market conditions the profit is negative and it looks to continue to go even more negative in the short term on just about all of the coins that we are currently mining. We had the opportunity to hit the pause button and not lose anymore money so we took it.
Our plan is to keep everything powered off and look for opportunities to turn them back on when the market is profitable again. The main reason we did this was because all of these machines have a shelf life of about 4-5 years and we don’t want to burn through them mining at a loss just to keep the pool running.
We also believe this is only temporary and there will be plenty of opportunities to use these machines in the future. So you will not lose anything from this decision because it will stay frozen as of September 30th and you will earn the remaining days once we are able to turn the machines back on.
For example… If you have 620 days remaining on your GPU contract then it will stay frozen at 620 days and when we do find a profitably** opportunity to turn the machines back on you will earn for the full 620 days.
No More GPU Shares Available…
We are also closing the GPU pool for all future sales and if you purchased a share within the last 30 days and your mining contract has NOT started paying then you will be entitled to a full refund.
If you have already started mining then you will not be entitled to a refund because your hashing power has been deployed and it’s sitting in a datacenter on a temporary hold.
We did everything we could to avoid this, including reworking power agreements, looking for better facilities and cheaper power but ultimately this is something affecting the entire industry and not just our own mining operations. With the current prices being low and the difficulty continuing to rise it just doesn’t make sense to keep the machines running.
We think market conditions will change in the near future and either the prices will rise, or the difficulty will drop from all the machines being unplugged. In other words the market should correct itself and we will be one of the first ones back online.
We are also looking into other opportunities to use this power for data mining, rendering, or some other components that will make money. Either way we are going to keep a close eye on the market so we can be ready to turn your machines back on and fulfill the contracts. We hope this dip in the market is only temporary and we are optimistic about being able to turn the machines back on soon.
Bitcoin Mining Status
As you have seen Bitcoin mining profits have also taken a big hit. Unfortunately, Bitcoin mining is approaching this same threshold where the profits are becoming very low because of the market conditions.
The mining industry exploded at the start of this year as we saw a lot of new mining operations come online to get their piece of newly minted Bitcoin. This happened when the price of BTC was at record highs and by the time all of these operations got online the difficulty had jumped from 1 trillion at the end of 2017 up to 7.4 trillion where it sits today.
The problem is the price went down from $20k to about $6,500 today and now everyone is feeling the squeeze.
Luckily for us, our Bitcoin mining operations are still profitable and there is no real danger of powering down anytime soon.*** However, when you look at this on a per share basis for our members it’s not very profitable with today’s numbers and until we can get all of our power online we know the new shares are not looking very attractive.
Keep in mind this happened to us back in late 2014 when the mining was in the same boom situation. Back then the prices were around $600 and it was very thin margins until the market exploded. We are all hoping for that next big run up and we are very well positioned ahead of any other mining operations to ride this back up when it happens.
I think we all know it’s “when” and not “if” but we also hope it comes sooner than later because right now when your**** in the middle of the down swing it hurts and we know many members are starting to feel that pain..
Sorry we don’t have better news on the mining pool earnings side, however we do have some GREAT news and big updates on new products that we have been working on for a long time now outside of mining that will launch very soon.*****
BIG Update Coming October 15th
We have many projects that our team has been working on during this past year and we are FINALLY in a position to begin rolling them out.
Rather than list these here we wanted to give you a heads up about a BIG UDPATE****** coming out on October 15th that will provide a lot of details on each one. For a quick teaser we have 3 new products that we plan to launch this year! This includes our new BC Club, CoinPay with the CP Market Place, and a a huge update/upgrade on ClubCoin that we know everyone will be excited about.
This update will be posted in English, Korean, and Japanese so stay tuned and get your teams ready for a massive opportunity in 2019 and beyond!
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This was a statement distributed by the Bitclub network to their users on Monday 8 October 2018. And it is published “as is”, as it was received. Here are some screenshots of the notification:
Some comments from the Global Crypto team on the statement:
*There is no guarantee that this will happen.
**Spelling error. Should read: “profitable”
***This entire paragraph is confusing. The statement declares that GPU mining is not profitable at all, and in fact is providing “negative returns”, and yet this sentence clearly states there is “no real danger” of Bitcoin mining suffering the same fate. How can this be guaranteed if GPU mining has just succumbed to the danger?
The subsequent sentence seems to imply future Bitcoin mining not looking very attractive anyway. If that sentence is however referring to GPU mining, then it is once again poor paragraph construction, but if it is Bitcoin mining being referred to, then the previous sentence is in essence nullified.
****Spelling error. Should read: “you’re”
*****This is an interesting development, and seems to be the same route of similar multi-level-marketing schemes that diversify their “product offering” outside of cryptoasset mining in order to keep the in-flow of consumer investment going, and thus keep the scheme propped up.
******Spelling error. Should read: “UPDATE”