At the after-event DC Blockchain summit reception, KnCMiner CEO Sam Cole would not rule out a return to producing enthusiast level bitcoin mining hardware in the future. Any potential return to the enthusiast level market will depend on the Bitcoin price being high enough that customers will be able to expect a profit on the hardware.
“Enthusiast level” products is an informal term for products that are considered too expensive to be called “consumer level” but aren’t expensive enough to be called “enterprise” products either. Enthusiast products generally refer to cutting edge technology items that are typically purchased by early adopters.
Cole does not think that consumer level miners (roughly between $500 and $2,000, although he did not quote particular numbers) will be profitable again in the foreseeable future. However, if the price gets high enough, Cole does think it is possible that slightly more expensive bitcoin hardware could be. Today, profitable mining generally requires a mining farm and inexpensive or free electricity.
Former miners who have been pushed out of the bitcoin mining game by larger fish may be excited by Cole’s non-denial. However, enthusiasm should remain limited at this stage. Cole’s comments were far from an announcement. Coming at a gathering after a public event. I did make him aware that he was talking to a reporter, but informal comments like this should not be seen as anything but.
Still, it is the strongest indication yet that KnCMiner could return to lower-than-enterprise mining hardware. KnCMiner has an up and down history with consumer and enthusiast level hardware. Early KnCMiner hardware were generally well-received but later iterations ran into shipping delays and quality control issues.
Since then, KnCMiner has been focusing on their own mining investments, dabbled in cloud mining and have been developing enterprise level ASIC miners. That has seemingly gone well, but it is worth pointing out that according to Swedish media, KnCMiner was recently forced to lay-off a quarter of their workforce, due to increased competition from China and changing energy tax laws in Sweden. The flip side to that is, that they also recently received a roughly 12 million dollar investment round that included Accel and others
Bitcoin’s all time high was a bit over $1200, since that time is plunged to below $200, before gaining its way back to where it sits now, in the $400 range. Cole indicated that was around the price when selling enthusiast level hardware became nonviable.
Presumably, the price will have to increase significantly and quickly in order to make mining with enthusiast level hardware viable again. The mining difficulty will eventually catch up to any potential new price and the bitcoin halving, likely taking place at some point this year, will reduce the block reward by half. Both of those factors will have to be considered before any enthusiast level miners will be able to jump back into the game and expect a profit.
We will keep you up to date as information becomes available.