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In summary
- Foundry, one of the largest Bitcoin miners in the US, cut 16% of its staff, focusing on its core business of mining and on-site operations.
- Despite the rise of cryptocurrencies, companies such as Consensys, Kraken and dYdX have also made layoffs due to regulatory uncertainty and challenges in the sector.
- Bitcoin mining remains an expensive and competitive industry, where miners’ income is affected by increasing difficulty and high energy consumption.
Bitcoin is booming and the crypto ecosystem is resurgent, but layoffs continue to occur lately.
The latest company to make such a move is American Bitcoin miner Foundry. Based in Rochester, New York, Foundry confirmed that it has cut 16% of its staff. The company is one of the largest Bitcoin miners in the United States.
In a statement to Decrypt it said it “made the difficult decision to reduce Foundry’s workforce, resulting in layoffs across multiple teams.” The firm added that it had also cut a small team in India.
Blockspace was the first to report the news of the layoffs, although Foundry said fewer positions were affected than originally stated.
“We recently made the strategic decision to focus Foundry on our core business: operating the number one Bitcoin mining pool in the world and growing our on-site operations business, while supporting the development of new DCG subsidiaries, including Yuma and the spin-off of Foundry’s successful auto-mining business,” he said in a statement.
Yuma is an artificial intelligence (AI) platform and subsidiary of Foundry. Digital Currency Group (DCG), which owns Foundry, said in a letter to shareholders after the US election that its mining operation would work better as an “independent business.” Foundry also provides staking services for other digital assets such as Ethereum.
Despite the rise in Cryptocurrency prices, major companies in the sector, including Ethereum giant Consensys, leading digital asset exchange Kraken and New York platform dYdX, have cut staff this year. Experts told Decrypt before the election that regulatory uncertainty played a role in the companies’ downsizing.
Bitcoin mining is a particularly difficult industry. Rewards for miners are halved every four years, and it becomes more expensive for companies to operate their businesses.
Bitcoin mining is the process of using powerful computers to verify transactions on the largest crypto network.
In the past, more than 14 years ago, it was possible to do the process on a home PC. But as the network has grown, so has the industry and the competition. Miners are now typically large operations that use server farms and a lot of electricity.
Miners receive newly minted Bitcoins for their work, and as the years go by, the process of producing coins becomes more difficult and even more energy-consuming.
However, JP Morgan said Bitcoin mining revenue grew in November amid the rising price of BTC, which came within a few hundred dollars of the $100,000 mark for the first time late last month.
Edited by Andrew Hayward
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