Coinhive Cloud Mining Service Falls to Earth With a Bang

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The crypto winter has had a devastating effect on a wide variety of companies relating to blockchain and cryptocurrency, and mining companies have borne the brunt. While ‘traditional’ crypto miner numbers have been dropping like flies, cloud mining services have faced an equally difficult spell. Hashflare, a once popular Bitcoin cloud mining company, ceased operations in July last year citing poor market conditions, and this week has seen another casualty of the industry – Coinhive, a cloud mining operator that focused on mining Monero, has announced that it will close its doors after the business became unprofitable.

The Bear Market Takes Another Victim

Coinhive, which launched in mid-2017 just as the bull run was getting into full swing, announced in a forthright blog post on their website that their services would be discontinued on March 8, explaining that recent changes to the Monero token, and the market downturn as a whole, were behind the decision:

“The drop in hash rate (over 50%) after the last Monero hard fork hit us hard. So did the “crash“ of the cryptocurrency market with the value of XMR depreciating over 85% within a year. This and the announced hard fork and algorithm update of the Monero network on March 9 has lead us to the conclusion that we need to discontinue Coinhive.”

Worse Could be to Come

Coinhive is (or was) a JavaScript-based service that required computer code to be installed on websites. The service would then use some of the computing power of any browsers that loaded that page to mine Monero, but this method has recently become popular among hackers for cryptojacking purposes, leading to some lamenting Conhive’s very existence:

Cloud Mining a Security?

Canadian cloud mining services might be in for more pain than most after the Canadian Autorité des Marchés Financiers (AMF) declared two weeks ago that cloud mining contracts could be considered securities, something that will have operators fumbling for the off switch should it be ratified. Such a decision would put paid to a number of services and would cause those in other countries to begin looking over their shoulder should their respective agencies wish to follow suit.