ScryptGuild closing down, BTC Guild may be next

bitcoin mining

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Earlier this week, popular auto-switching alt-coin mining pool ScryptGuild announced it will be ceasing operations on September 27. While not one of the larger pools in the scrypt-mining community, the group has a significant user base, many of whom expressed shock and disappointment at the closure.

Pool administrator “eleuthria” gave little explanation for the closure, noting simply that the pool’s code was “running suboptimally” and “not sustainable,” and that the time needed to rewrite the code to automatically switch to newer and more-profitable alt-coins was significant.

Users will be able to withdraw their current account balances in BTC until September 20.

It’s hard not to read between the lines in the announcement, which suggests that the pool had become less profitable since its launch in February. Alt-coins in general have struggled relative to bitcoin in the last several months, and a new generation of powerful and expensive Scrypt algorithm-specific ASIC miners may be discouraging hobbyist miners from entering the marketplace.

In related news, major bitcoin mining pool BTC Guild also hinted that it might be closing in coming months due to restrictions imposed by the “BitLicense” regulations proposed New York Department of Financial Services (NYDFS).

BTC Guild’s operators issued a statement last week noting compliance with the rules would be “impossible to do legally without obtaining significant personal information on all users” and would impose “significant financial costs which would exceed the amount of money the pool has generated since inception.”

BTC Guild is one of the largest bitcoin mining pools, and currently accounts for over 7% of the total network hashrate. The effects of its closure would be difficult to predict, although it is likely that most of its current miners would join smaller pools. BTC Guild has since retailed legal counsel in preparation for the NYDFS’s final version of the rules.

Written on 29 Jul 2014.