Bitcoin Mining Firm KnCMiner Declares Bankruptcy

Halving Bitcoin reward and KnCMiner crash

KnCMiner is a Swedish mining organization that announced their big business loses and eventually crash. This event happened at the same time when Bitcoin electronic money company declared an progressive halving of a block reward. Such news are connected to the reason that the system does not make big profits and has been failing to keep up with development. This information was given by the CEO of the famous Swedish company.

However, back in 2013, KnCMiner could not even think of crash because it was definitely a fast-growing and prosperous mining company that managed to gather $32 million from investors including such big firms as Creandum and Accel. Unfortunately, in these latest days, the organization was mentioned in the news and the content was not positive. Apparently, KnCMiner was engaged in the lawsuit about Titan. This is well-known equipment product that allows customers to find and mine crypto currencies. However, the organization won the lawsuit, it could not escape problems with decreasing the income.

The CEO of the company believes that the halving of Bitcoin block reward will become a great solution. As long as the block reward is provided to a person or a company that mines a “fortunate” coin and then adds a block to a blockchain, KnCMiner can get their profit. Before, the block reward cost 25 bitcoins per each block, however, the number soon came to 12,5. It is necessary to mention that the first figure was 50 bitcoins per every new block. It means that such rewards can positively affect the profits of large mining companies where the Swedish company is one of them. Mining will be the only one effective procedure that will keep the organization going.

The KnCMiner company’s CEO explains that they are going to establish the price for the coin. They aim to match the price with the price that is set on the market. Nowadays, the price is $480. However, including all expenses, the price will be higher. It would be almost impossible to manage other company’s functions if the cost of the coin will be so high.

The CEO also added that it is wrong to think that there is a connecting between the Titan lawsuit and a chance of the company being bankrupt. Right now, all actions inside the system are closed before the problem with Titan will be finally over.

KnCMiner bankruptcy will cause employees firing. Around 40 people will have to search for new job offers after the department will be closed. At the moment, all companies that are controlled by KnCGroup including KnCMiner are run by Nils Åberg. However, it does not engage XBT Provider. This company is owned by KnCGroup. Therefore, people who work in XBT Provider and manage bitcoins will still work in the company.