KNC Miner Declares Bankruptcy – Chinese Competition Too Tough

[sakinaka]

I was thinking that it was already the case, since they didn't released a new product for a long time. That's sad, and that's another less competitor against China :/...

[LiteCoinGuy]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

Agree in some way. Electricity can be very cheap in parts of China, they obviously have lots of financial issues if they can't continue to turn a profit in this climate.

KNC Miner should have focused on getting a cheap supply of electricity. Geothermal sounds cheap and I assumed Iceland was the world's top producer until I checked on Wikipedia. It says the USA produces the most, and Iceland's in seventh place. China is at the bottom of the list, so geothermal might be a weak spot for its miners.

United States
Philippines
Indonesia
Mexico
New Zealand
Italy
Iceland

https://en.wikipedia.org/wiki/Geothermal_electricity

and there are alot more states in the world where mining is cheap like in georgia.

[mayax]

China owns over 90% from mining and over 97% from BTC trades


http://bitcoincharts.com/charts/volumepie/

https://bitcoinity.org/markets/list


Also, the USD market almost doesn't count. it's only 5% 

[franky1]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

Agree in some way. Electricity can be very cheap in parts of China, they obviously have lots of financial issues if they can't continue to turn a profit in this climate.

KNC Miner should have focused on getting a cheap supply of electricity. Geothermal sounds cheap and I assumed Iceland was the world's top producer until I checked on Wikipedia. It says the USA produces the most, and Iceland's in seventh place. China is at the bottom of the list, so geothermal might be a weak spot for its miners.

United States
Philippines
Indonesia
Mexico
New Zealand
Italy
Iceland

https://en.wikipedia.org/wiki/Geothermal_electricity

electricity is not the big spender... its the cost of production of rigs..

in short.
for every $1000 bitmain sells to western countries. it can make 5 units atleast.
so for every unit a customer buys, bitmain get to keep 4, for free..

bitmain is not really wasting funds on buildings or employing electricians to install fnky new generators during 2015-2016.. as that was all paid for in earlier years..so their costs were low

but in KNC's case they got $15m in february 2015 wasted a couple mill decking the place out and then designing a new chip ready for summer 2015..
by this time summer 2015 came they were highly negative in their investment.. where as bitmain at that same summertime last year was in profit.

then KNC not only had to break even. not only had to make more to cover ongoing costs. but also to put money back into the investors accounts(which were due for returns now (hense the bankruptcy)).. and thats before they could even develop a successful business plan to get an extra 10% ontop of all of that, just to stay ahead of difficulty..

so now u know the crux of the story.
KNC could not build a unit of 4.7gh for $200
they didnt have the community trust to sell units 5x above cost due to issues in previous years still lingering over their heads.

they didnt have the business acumen to manage their build costs. they literally tried to rush it and waste money before they could even really get their new mining farm operational, and then try rushing even further just to try getting back in the race..

[Snorek]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

Agree in some way. Electricity can be very cheap in parts of China, they obviously have lots of financial issues if they can't continue to turn a profit in this climate.

KNC were based in Sweden not China. I think electricity is expensive in Sweden - they are trying to go fossil free, but that raises the bills.

KNC was claiming that they are using green energy. I don't know the specific, but it most likely was hydroelectric power plant.
So I am almost sure that electricity cost was not the major problem for them - most likely it was cost of labor in Sweden that hurt them.

http://www.kncminer.com/

[TKeenan]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

Agree in some way. Electricity can be very cheap in parts of China, they obviously have lots of financial issues if they can't continue to turn a profit in this climate.

KNC were based in Sweden not China. I think electricity is expensive in Sweden - they are trying to go fossil free, but that raises the bills.

KNC was claiming that they are using green energy. I don't know the specific, but it most likely was hydroelectric power plant.
So I am almost sure that electricity cost was not the major problem for them - most likely it was cost of labor in Sweden that hurt them.

http://www.kncminer.com/

Green energy costs MORE!  The cheap energy in China is the VERY not green burn shitloads of black coal and give all your neighbors cancer.  The reason mining is cheap in China is because nobody really cares if we pour shit-tons of cancerous causing materials into the sky.  The Chinese environment is like a toilet.  Chinese miners don't care about this.  If you are going to take care of the environment, you are going to have to spend some money.  That is how China wins.

[countryfree]

So what? There were shirt makers, shoe makers in every country in the world a few decades ago, but now most of that stuff is coming from China. That's not the end, though, as some clothes factories have closed in China, with new ones opening in Vietnam and Bangladesh. Maybe miners will follow the same path.

[TKeenan]

So what? There were shirt makers, shoe makers in every country in the world a few decades ago, but now most of that stuff is coming from China. That's not the end, though, as some clothes factories have closed in China, with new ones opening in Vietnam and Bangladesh. Maybe miners will follow the same path.

Yeah, the Bengali fabs are still having a pretty tough time getting their 14nm process running well.  I don't see mining going in that direction soon.

[yenxz]

feel sad for a whil when think if some exchange use that miners and its make exchange stopped to mine bitcoin,for its not give any effect,i'm not a miner,so everything happen with knc miners,i dont see its serious problem.

[franky1]

So what? There were shirt makers, shoe makers in every country in the world a few decades ago, but now most of that stuff is coming from China. That's not the end, though, as some clothes factories have closed in China, with new ones opening in Vietnam and Bangladesh. Maybe miners will follow the same path.

already are, but shhh lets not talk about iceland just yet.. its a secret

[Searing]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

It is a farce...they are getting out of mining because they have a knc exchange now that they used to fund from mining...they can now let the big IPO $$ and investors in their
mining operations hold the bag ..as they moved on..this exchange is going gang busters from what I understand....

that exchange/endeavor was set up completely separate from kncminer as a business (funny that huh?) and I guess they are just killing it with this exchange or whatever on NASDAQ

same dance knc has done in the past

made home miners and swore would not have a data hall....in the 4 months from delivery in Sept 2013 to Jan 2014 said yeah we are gonna have a data hall

took pre-order money on neptune (btc miner) used the $$$ to fill out their data hall first and then 4 months late shipped neputunes as a result neptunes maybe got 1/3 of Roi

took big newbie IPO $$$ (same game as home miners with folk and bigger pockets) ...for cloud mining (went no place)and the big data halls with their 14nm chip they

did not release to the public

then like all knc endeavors...just when you would expect as a consumer to get more from them ...like a normal company (consumers another wave of equip) or the IPO investors (who saw the 14nm chips JUST deployed in April maybe and would expect to get again a NORMAL return on investment) er nope....

KNC pulls the plug out on all this..and has moved on to other endeavors leaving the above holding the bag.... see the exchange on NASDAQ below....SOME IPO money but mostly
in house from what I understand

http://www.kncminer.com/blog/newsarchive



So by declaring bankruptcy 'early' they leave the data hall IPO folk and etc holding the bag....they sell it say to a concern for 1/2 the price because they get 1/2 the coin after halving and walk again win/win/win....and from what I understand KNC always mined daily BTC to cash...so they bled this puppy like the cash cow it was as long as they could....I doubt the IPO investors were told this year that (from the article) $480 btc price was NOT enough to keep the mining operation going heh.....

http://www.coindesk.com/kncminer-declares-bankruptcy-cites-upcoming-bitcoin-subsidy-halving/

Also notice in the article how they say they want to wrap this bankruptcy up NOW before halving ...lol so obvious others are gonna bag hold this loss in IPO $$$...

evil works (tm knc)


Then again Sam Cole WAS (is now again) a Banker...so they are like a 'medicine show' you go that was great...give them money and blamo they are out of town on to the next gig


So anyway ......they are NOT gonna suffer at all in any of this.....the majority of all the money in the failed endeavors above were consumers or IPO $$$ and now they have a fully funded exchange..they control in full ..making $$$ hand over fist with 'limited' IPO money to retain control.....

evil geniuses they are imho

[HeroCat]

China can compete everywhere - everything is cheap over there, so they can do everything and others can just look and do nothing. 

[Bitcoinpro]

Ur kidding they folded and the Chinese celebrated with a massive price pump

[Bitcoinpro]

Seems they have a profitable subsidiary that is unaffected by the bankruptcy

and will absorb core staff "XBT Provider"

[tobacco123]

Seems they have a profitable subsidiary that is unaffected by the bankruptcy

and will absorb core staff "XBT Provider"

Clever businesses always try to diversify so that it won't be affected by the sudden changes in a specific field. I guess they are closing the mining part and moving to other businesses.

[lemipawa]

if you cant mine profitable at 400-500 USD per coin, you should go out of business.

Agree in some way. Electricity can be very cheap in parts of China, they obviously have lots of financial issues if they can't continue to turn a profit in this climate.

KNC Miner should have focused on getting a cheap supply of electricity. Geothermal sounds cheap and I assumed Iceland was the world's top producer until I checked on Wikipedia. It says the USA produces the most, and Iceland's in seventh place. China is at the bottom of the list, so geothermal might be a weak spot for its miners.

United States
Philippines
Indonesia
Mexico
New Zealand
Italy
Iceland

https://en.wikipedia.org/wiki/Geothermal_electricity

Geothermal electricity is used in my country but electricity here is not cheap it's too expensive that people are stealing electricity by connecting directly to the main switch without the use of a meter.

Chinese miners maybe using cheap electricity and that's it or maybe they run their own power like a run off river type of electricity. Using solar is not advisable.

[Gleb Gamow]

Exactly how does a company go bankrupt after manufacturing their own equipment; garnering VC funding and pre-selling miners delivered after used for a spell; enjoy relatively cheap electricity; locates its mining farm in a cold climate so not to contend with heat issues, consuming even less electricity than their competition due to lower cooler cost?

I'm curious to learnt if any VCs got burnt.

VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month? Hello. Hello! HELLO!
KNC: HeHeHe! Bankrupt!
VC: Boy, we didn't see that a comin'!

[Bitcoinpro]

Exactly how does a company go bankrupt after manufacturing their own equipment; garnering VC funding and pre-selling miners delivered after used for a spell; enjoy relatively cheap electricity; locates its mining farm in a cold climate so not to contend with heat issues, consuming even less electricity than their competition due to lower cooler cost?

I'm curious to learnt if any VCs got burnt.

VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month?
KNC: Okey-dokey!
VC: How's everything goin' this month? Hello. Hello! HELLO!
KNC: HeHeHe! Bankrupt!
VC: Boy, we didn't see that a comin'!

yeah just who are they bankrupt from

just getting rid of staff the easy way

[ajareselde]

They were expecting much higher prices per coin than they were, but its kind of funny that as soon as they declare bankruptcy , price went up.
i know its probably just a coincidance, but it sure does seam funny in a way. i bet they wouldnt mind if the price was 520-550 usd before they went under.

[Kprawn]

The Chinese will always stay a bit ahead of the crowd... they have chip manufacturing plants in their country and they have subsidized / cheap electricity.. on tap. Other countries have to import these miners

and this comes at a cost. Most of the time these technologies are already outdated and old by the time it is shipped.  If other governments wants to help Bitcoin miners, they should provide subsidy in the

form of cheap electricity and duty free import duties for these asic chips. {which will never happen}