Vancouver company to offer bitcoin “mining as a service”

Cryptocurrency mining and blockchain company DMG Blockchain Solutions is launching a bitcoin mining service said to be tailored to customers wanting to do their own mining.

The Vancouver-based company says that its “Mining as a Service” model will serve the growing demand for bitcoin mining internationally, especially in Japan, where cryptocurrency investment is now driving the market.

First there was SaaS, or Software as a Service, and now there’s MaaS, aka Mining as a Service, which DMG says will democratize cryptocurrency mining.

“By enabling our customers to mine their own bitcoin in a clear and transparent manner, I believe we have the right offering at the right time,” says DMG CEO Dan Reitzik in a press release. “The Japanese demand remains strong and we plan to address the broader global market in short order.”

This past September, capital pool company Aim Explorations announced a qualifying transaction to acquire all of DMG’s issued and outstanding shares. Incorporated in September of 2016, DMG says that along with its mining operations, it’s building a blockchain platform for the supply chain management sector. The company operates 260 servers and is set to purchase $3 million worth of hardware resulting from a partnership with a group of bitcoin owners and investors called the Bitmasters network based in Japan.

“Bitmasters’ members have been buying bitcoin for more than four years and we are tremendously excited to be able to mine bitcoins for ourselves,” says Kiyoshi Nishi, Chief Executive Officer of Bitmasters. “The Bitmasters network decided to work with DMG after extensive due diligence into other companies around the world.”

As the price of bitcoin continues to hit dizzying new heights, Japanese retail investors have emerged as major players, with some estimates saying that 30 to 50 per cent of bitcoin trading is now coming from Japan’s retail and hedge fund investors.

In April of this year, the Japanese government gave legal status to cryptocurrencies as a means of settlement, then in September, it officially recognized 11 digital currency exchanges. Trading in Japan reportedly took off in earnest after the Chinese government shut down its cryptocurrency exchanges in September. According to Reuters, Japanese trading in bitcoin jumped to $35.4 billion in November from $1.45 billion in April.

Cryptocurrency mining is the mechanism whereby transactions on a blockchain platform are validated, through miners using computing power to solve complicated math problems. Miners are rewarded for their work by getting paid in cryptocurrencies like bitcoin.

Although anyone with a simple graphics processing unit can participate in currency mining, the difficulty of the problem-solving tasks involved has been purposefully devised to increase as more mining occurs, thereby making the act of mining now profitable only to those with massive computing power at their disposal.

News has spread of cyber criminals now surreptitiously taking over networks and even personal computers to use them in mining operations. In Buenos Aires, the wi-fi at a Starbucks coffee shop was reportedly “cryptojacked” so as to put its latte-sipping customers’ laptops and phones to work mining for currency.

Disclosure: DMG Blockchain is a sponsor of Cantech Letter

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