The falling profitability of mining cryptocurrencies has forced Japanese companies DMM.com and GMO Internet to withdraw from the crypto mining industry.
The underwhelming cryptocurrency prices have claimed a number of victims once again. This time, the unlucky entities are two high-profile tech firms from Japan.
Internet companies DMM.com and GMO Internet have decided to pull out of their respective crypto mining businesses. As reported in local outlet Tokyo Keizai, both companies explained that their separate decisions were caused by the falling profitability in mining virtual currencies.
Blockchain networks using the Proof-of-Work algorithm (PoW) like Bitcoin, the largest virtual currency on the market, are maintained by a collection of miners. In return for mining, they are rewarded with freshly generated cryptos.
The price of Bitcoin (BTC) is constantly dropping ever since the market skyrocketed in early 2018. However, the number of miners continued to rise at the same time, according to GMO in its Q3 2018 report. This inverse relationship caused stiff competition among miners, forcing many businesses to remove themselves from the mining industry.
Meanwhile, GMO revealed that it would halt the production of more Bitcoin miners.
Once an easy way to turn in a profit, crypto mining has become such a loss-making business that individual and corporate miners decided to turn off their devices as of late. In November, photos and videos circulated around the internet showing Chinese miners scrapping their ASIC (application-specific integrated chip) units as the cost of crypto mining continued to outweigh the benefits.