{"id":17,"date":"2016-05-29T21:31:00","date_gmt":"2016-05-29T21:31:00","guid":{"rendered":"http:\/\/blog.holytransaction.com\/why-kncminers-bankruptcy-is-good-news\/"},"modified":"2021-10-01T01:28:04","modified_gmt":"2021-09-30T23:28:04","slug":"why-kncminers-bankruptcy-is-good-news","status":"publish","type":"post","link":"https:\/\/holytransaction.com\/blog\/2016\/05\/why-kncminers-bankruptcy-is-good-news.html","title":{"rendered":"Why the KnCMiners Bankruptcy might be a good news"},"content":{"rendered":"<div style=\"text-align: justify;\">The Sweden bitcoin mining company called KnCMiner announced its bankruptcy.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">KncMiners was one of the greatest mining company <a href=\"http:\/\/www.coindesk.com\/bitcoin-miner-kncminer-raises-15-million-in-series-b-round\/\">who raised $15m in venture funding<\/a> from <b>Accel <\/b>and <b>Creandum<\/b>, among the other investors back in 2015 after only two years of life.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<h3 style=\"text-align: justify;\">Why KncMiners had to face Bankruptcy<\/h3>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">One of the possible reason of this bankruptcy could be <a href=\"https:\/\/www.cryptocoinsnews.com\/bitcoin-company-kncminer-facing-three-class-action-lawsuits\/\">the three class-action lawsuit KnCMiner had to face recently.\u00a0<\/a><\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">But CEO <b>Sam Cole<\/b> denied any relationship between their bankruptcy and these recent lawsuits.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">Cole, in fact, argues that the main reason for KnCMiner bankruptcy is the decrease of the bitcoin transaction rewards for miners.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\"><i>&#8220;Effectively our cost of coin \u2013 how much we produce the coins for \u2013 will be over the market price. The price is now [roughly] $480. With all of our overhead, after July, the cost will be over $480. All of the liabilities we\u2019ll have after that time will be too high&#8221;<\/i>, explained Cole.<\/div>\n<h3 style=\"text-align: justify;\">Why the Bitcoin Mining Company KnCMiners Bankruptcy might be a positive news<\/h3>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">In a centralized economic system currency is issued by central banks who control the emission and the value.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">Conversely, in a decentralized economy currency is not controlled by any central authority and this is the reason why &#8211; in the Bitcoin case, for example, in his whitepaper <b>Satoshi Nakamoto<\/b> suggested an algorithm to define when and how many new bitcoin can be created.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">According to this algorithm the number of new bitcoins is set to decrease with a 50% reduction every 210000 blocks, or almost 4 years.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">As a result, the number of <b>bitcoins will not exceed 21 million<\/b>.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">As the number of bitcoins is set to decrease the same thing happens to the miners reward.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">Thanks to a process called <b><i>halving<\/i><\/b>, the rewards drop down, as it happened back in 2012 when it took down from 50 to 25 BTC.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">Now<b> it is set to become 12.5 BTC in July.\u00a0<\/b><\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">For this reason the miners work is not so convenient anymore, so the number of miners is decreasing. Ans this means that the Bitcoin price will grow.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">Also, a Bitcoin value is roughly $500, and miners cost of a new Bitcoin is more than $480 in energy and computer tools, so under that price it\u2019s not worth doing it.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<h3 style=\"text-align: justify;\">Halving process to help Bitcoin rising<\/h3>\n<table class=\"tr-caption-container\" style=\"float: right; margin-left: 1em; text-align: right;\" cellspacing=\"0\" cellpadding=\"0\">\n<tbody>\n<tr>\n<td style=\"text-align: center;\"><a style=\"clear: right; margin-bottom: 1em; margin-left: auto; margin-right: auto;\" href=\"https:\/\/3.bp.blogspot.com\/-FiGtWqwLmjo\/V0tfSmc7UMI\/AAAAAAAAAfM\/o7YmADOO5Y47reP3ssMDIhcEttXqItq6ACLcB\/s1600\/how-to-mine-bitcoins.jpg\"><img loading=\"lazy\" decoding=\"async\" title=\"kncminersbankruptcy.jpeg\" src=\"https:\/\/holytransaction.com\/blog\/wp-content\/uploads\/2016\/05\/how-to-mine-bitcoins.jpg\" alt=\"&lt;img src=&quot;\/images\/mining.jpg&quot; alt=&quot;kncminers bankruptcy&quot; height=&quot;264&quot; width=&quot;350&quot; \/&gt;\" width=\"320\" height=\"232\" border=\"0\" \/><\/a><\/td>\n<\/tr>\n<tr>\n<td class=\"tr-caption\" style=\"text-align: center;\">Image Courtesy of Coindesk.com<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">As for any scarce product, like gold or oil, the cost of extraction is one of the main elements that determine its price. If it increases, then the miners stops to do their jobs.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\">As a result the offer is reduced and its value rises.<\/div>\n<div style=\"text-align: justify;\"><\/div>\n<div style=\"text-align: justify;\"><b><a href=\"https:\/\/holytransaction.com\/blog\/2016\/04\/thats-why-440-bitcoin-price-is-low.html\" target=\"_blank\" rel=\"noopener noreferrer\">Read here another interesting article about halving<\/a>\u00a0<\/b>and <a href=\"https:\/\/www.bitcoinblockhalf.com\/\" target=\"_blank\" rel=\"noopener noreferrer\">watch here the countdown to the next reward drop.\u00a0<\/a><\/div>\n<p>Open your free digital wallet <a href=\"https:\/\/holytransaction.com\/app#!\/signup\">here<\/a> to store your cryptocurrencies in a safe place.<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>The Sweden bitcoin mining company called KnCMiner announced its bankruptcy. KncMiners was one of the greatest mining company who raised $15m in venture funding from Accel and Creandum, among the other investors back in 2015 after only two years of life. Why KncMiners had to face Bankruptcy One of the possible reason of this bankruptcy [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":2,"featured_media":365,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[37,61,76,319,388,433,434,547,564],"tags":[749,764,996,1050,1095,1096,1205,1221],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v19.6 (Yoast SEO v22.3) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Why the KnCMiners Bankruptcy might be a good news -<\/title>\n<meta name=\"description\" content=\"The Sweden bitcoin mining company called KnCMiner announced its bankruptcy. 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