GMO Internet Group Records In-House Revenue Losses But Big Boost in Bitcoin Mining Rewards
Last year ended with major problems in the crypto mining industry, as Bitcoin mining started to become less fruitful. GMO Internet Group, a major force in the IT industry in Japan, recently published a monthly report on the mining operations that happen in-house. The report showed that their mining revenue dropped deeply, but it also indicated that there’s been an increase in the mining rewards for Bitcoin.
Overall, the total for the losses in the fourth quarter amounted to 35.5 billion yen ($320 million). The total loss, unconsolidated, amounted to about 38 billion ($334.5 million). Due to these results, the hardware manufacturing business will not continue to function.
However, the in-house mining operations will continue, though there will be restructuring of that sector. One of the plans for restructuring involves the relocation of the mining center to an area that costs less to run the electricity for.
Despite the fact that mining revenue is decreasing, the rewards that GMO has reaped seems to increase overtime. For instance, in December 2017, the reward was just 21 BTC, followed up by 528 BCT by June 2018. By the end of the year last year, the reward had climbed to 960 BTC, which is over 45 times what it was a year before. During the report, the company elaborates,
“The market’s total hash rate decreased, so our mining share rose, and our mining reward expanded.”
This disclosure also revealed valuable information about the hashrate, which started at 22 peta (1,000 trillion) times per second (PH/s) in December 2017. By June 2018, it rose to 384 PH/s, followed by a rise to 670 PH/s in December 2018.
The increase has mostly halted by the last few months of the year, staying between 668 PH/s and 674 PH/s towards the end of 2018. The reward does not necessarily increase with the hashrate, however. GMO explained, “For each currency pair, profitability fluctuates and the allocation of hashrate is based on an algorithm.”
Along with the information about Bitcoin, the firm describes the mining rewards and hashrate of the other cryptocurrencies that they mine. Bitcoin Cash, for example, did not mine at all in December 2018. However, according to the latest report, GMO has decided to no longer report about the crypto mining business that they run in the monthly reports for 2019. Instead, they will report it quarterly in their earnings announcements.
Back in November last year, the combined cryptocurrency projects had a historical performance, with profits totaling 2.6 billion yen ($22.8 million). These profits included the sales of mining hardware. However, other companies have not been as lucky, as Bitmain shutdown the work they were performing in Israel last month, and layoffs continue to be announced.