KNC bankrupt. Beginning of the End of Mining Centralization?
KNC reports Friday evening that they have filed for bankruptcy
The Bitcoin mining equipment producer and mining company has for some time struggled competing with Chinese miners, and earlier this year had to sack 20% of their staff. Among the challenges for the Swedish company is an electricity tax of approx. 2 cents (USD) per kWh, which means 44% of their profits are consumed by that tax alone.
But the event begs another question. Is something more fundamental going on in the industry? As Antonopoulos has been pointing out, due to Moore's law, the previously insane mining asic development rate is slowing down, resulting in increaed shelf-life of mining products. Additionally, electricity is beginning to play a larger role in the total picture, meaning that the hobby miner who may even need electrical heating for his home can now compete with big asic producers.
I suspect that in the coming years, we will see a transition from asic producers with their own huge datacentres, to increased sales of state-of-the-art consumer mining products, and one by one, the big ones will fall.
At the end of the day, this piece of seemingly bad news may just be good news for Bitcoin.
Reference article (in swedish):
http://www.breakit.se/artikel/3867/svenska-bitcoin-jatten-knc-miner-i-konkurs-konkurrensen-for-tuff
Too bad :( My KnC Jupiter was fantastic and they were a very good company to deal with. I guess they're free to move on to the next big thing now. Maybe we'll see them here on Steemit soon.
The post paints a positive picture of mining becoming more decentralized, and that is indeed possible, but it is also possible this just means more concentration with a few players in China for the foreseeable future.
In the short term, that is unfortunately a possibility. Let us just hope that consumer products will start becoming a viable option quickly enough to avoid big datacentres with free power gaining too much power. I'm just waiting for the first line of Electrical Bitoin Heating products. Internet of Things :D