Genesis Mining Expands into Ethereum Mining with Year-Long Contracts

Bitcoin Magazine
Genesis Mining Expands into Ethereum Mining with Year-Long Contracts

Cloud mining provider, Genesis Mining, is expanding its mining operations with the launch of Ether Cloud Mining contracts. For the first time, customers of Genesis Mining will be able to mine for Ether, the fuel that powers the Ethereum network.

“Our customers asked and we listened. Due to our large-scale GPU mining activities we are glad to offer significant parts of our farms for Ether mining in the cloud. Users can therefore benefit from our economy of scale and our geothermal-powered and optimized GPU mining rigs in Iceland. We are bullish on Ethereum and look forward to giving our customers the chance to profit from this exciting innovation and also support the network,” Marco Streng, CEO of Genesis Mining, said in a statement.

To some, Ethereum is considered Bitcoin v2.0. It was developed by Vitalik Buterin in 2013 and has since gone on to raise more than $15 million to allow participants to create and execute smart contracts. A smart contract is a protocol that can execute the rules found in a contract without the need for human intervention.

“Our GPU mining farms are mining X11 and Ethereum. We are expanding them continuously, and since we are selling Ethereum in the cloud now, we are ramping up more Ethereum mining capacity,” Streng said in an interview with Bitcoin Magazine.

Genesis Mining already had a farm of GPU miners — which are inefficient at mining bitcoin — because it offers X11 mining. Since so many users were interested in Ethereum, the company chose to divert resources to the task of mining Ether. This move has no impact on its bitcoin mining farm.

“More miners on the network definitely helps increase the network security. It’s great to see operations organizations such as Genesis take an interest in supporting Ethereum,” said Vitalik Burterin in an interview with Bitcoin Magazine.

Contracts are for One Year

There is currently an effort underway at Ethereum to transition from proof of work to proof of stake, which grants power to those who hold coins. The more of a coin that someone holds, the more they are able to mine. Because of this, Genesis Mining will be offering only short-term contracts.

“It is a one-year mining plan which focuses on Ethereum and switches to X11 after Ethereum switches from PoW to PoS until the year [2016] is over,” Streng said. “It is an accelerated ROI [return on investment] compared to our lifetime contracts because of the low prices, zero fees (all contained upfront) and shorter timeframe.”

Genesis Mining will be offering three plans. Small-scale mining is 3MHs for $53.97, medium-scale mining is 50MHs for $899.50 and large-scale mining is 100MHs for $1,799.

Jacob Cohen Donnelly is a consultant and journalist in the bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief.

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Overstock CEO Confirms Company’s Form S-3 Is Approved
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Patrick M. Byrne, the Chairman and CEO of (NASDAQ: OSTK), confirmed in a phone interview with Bitcoin Magazine that the SEC had declared the company’s Form S-3 statement effective, bypassing a large hurdle for the crypto-friendly firm.

“Effective means approved in this sense,” Byrne said. “You file it [Form S-3] with the SEC, you go back and forth until it is approved, and then it sits on the shelf. It can sit on the shelf for 3-4 years before you have to do the process again.”

Form S-3 is a registration form mandated by the SEC that gives established companies an easier path to issue publicly traded securities. If a company has at least 12 months of properly filed reports with the SEC and is compliant with the Securities Exchange Act of 1934, it is eligible to file a Form S-3.

“Once it has been approved, it [an actual offering of securities] doesn’t require any further approval,” he said.

But while the company has approval to issue securities, it has made no determination yet on if it will.

“I can’t confirm that there will be an offer. I can’t comment on if there will be an offer” Byrne said. “I am studying that now, trying to decide if there should be one, but I can’t even comment if there is one on the horizon.”

In its Form S-3, sought approval to issue up to $500 million in new securities in the form of either common stock, preferred stock, depositary shares, warrants, debt securities, or units. In its Form S-3, the company said:

“This prospectus provides you with a general description of the security we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering.”

The SEC approval is a boon to Overstock, but also to the bitcoin ecosystem as issuing shares on the blockchain has been a use case discussed for some time. “The great innovation in bitcoin is the underlying technology,” he said, referring to the blockchain. has built its own proprietary blockchain, which will then be publicly distributed. While Byrne was unable to go into detail about the specifics of the technology, he did say that trades would be hashed onto the Bitcoin blockchain at some point in the process.

The Future of t0

While getting approval to issue up to $500 million in securities on its blockchain is momentous, t0 has already been working for some time now. In July, Overstock sold the first cryptobond on the blockchain. FNY Managed Accounts agreed to buy the entire $5 million bond as a proof of concept, though there were assurances in place in case it failed.

“We’ve already built the technology to do stock loans, which is important for Wall Street… to bring efficient pricing to stock loans,” Byrne said.

A stock loan is where one party agrees to lend its securities—shares of a company, for example—to another firm in exchange for a negotiated fee. At any one time, there is $1.7 trillion out on loan from an overall $101 trillion in financial securities on the global stock market. The arbiters in the middle, orchestrating these deals, generate all the revenue. By putting it onto a public ledger, the stock holders can increase the amount they generate via the negotiated fee.

“This [Form S-3] could generate new things for us to investigate with crypto. We’ve got a really good crypto team now, which is the hurdle other companies are finding difficult,” Byrne explained. Finding quality talent is always a problem for technology firms, but especially for those in the still very young bitcoin space. “A lot of people applied to us starting about a year ago. We had the pick of the talent around the country and we got a number of people and then started adding to that group.”

But fundamentally, what is a firm like doing under the control of an eCommerce site like

“I think that, in the long term, these two business don’t belong together. You might see it split off, you might see us take outside investment, there’s lot of options. I almost want to turn it over into the hands of another company with which it would be more aligned,” he explained.

While Byrne didn’t have a specific example of what could happen, he did say that he had been fielding many calls. “I’ve been holding them off until now. You could well see a venture capital or private equity fund invest in this and then we move it outside of the Overstock group,” Byrne said.

While Overstock investigates whether it wants to issue securities, one thing is clear: the sector has gotten a little closer to abolishing T+3—the current time from which a trade takes place and when it has to be settled three days later—and moving to a true T0 environment.

Jacob Cohen Donnelly is a consultant and journalist in the bitcoin space. He runs a weekly newsletter about bitcoin called Crypto Brief.

The post Overstock CEO Confirms Company’s Form S-3 Is Approved appeared first on Bitcoin Magazine.