Business

This company made $3M in 4 days as part of the Bitcoin gold rush

Image Credit: Illustration by Tom Cheredar

KnCMiner is one of the companies raking it in from the most recent Bitcoin gold rush.

The company sold $3 million worth of its Bitcoin mining machines in a four-day trading frenzy of the alternative currency, selling 5,000 machines between Nov. 7 and Nov. 10. In this same time period, Bitcoin’s value increased by 27 percent, from $264 to $336.

Bitcoin is a decentralized “crypto-currency” in which transactions are anonymous and happen through a peer-to-peer network.

The value of the  digital currency has sharply climbed over the past week. It crossed $400 yesterday, and the price is now up 3,000 percent from January. Chinese demand is widely cited as the main driver of the recent Bitcoin boom, but tech advancements that make it easier to mine, buy, sell, and trade Bitcoins are what brought it in from the fringes.

KnCMiner’s machines help people mine Bitcoin, meaning it helps them introduce more of it into the ecosystem. “Mining Bitcoin” refers to the process of earning Bitcoin for solving a “block,” or a number of encrypted Bitcoin transactions. When that block is solved, the transactions are processed and the solver gets a certain number of Bitcoins as a prize.

Basically mining is the mechanism by which the currency is issued. If you want to procure Bitcoins, you can either buy them on an exchange, receive them in payment, or mine them yourself.

When Bitcoin started out, the number of the miners and the quality of their equipment was low, so only a small number of the digital cash was issued each day. Typical computers don’t have the power to solve the difficult cryptography problems required to mine Bitcoin.

KnCMiner’s special Bitcoin computers using ASIC (Application-Specific Integrated Circuit) mining chips. The average mining speed of its Jupiter model is .6 coins a day per device, and the company claims its rig can “hash” faster and more efficiently than any others on the market.

Bitcoin had a somewhat unsavory reputation for years and was closely associated with illegal activity. Now it is rapidly gaining legitimacy and generating a tremendous amount of excitement as its value soars and people become “Bitcoin millionaires.” Bitcoin exchanges and discussion forums are flurries of activity, and even the mainstream (read: not nerdy tech) media are following the story.

All this buzz is causing something of a gold rush, both for Bitcoins and for the technology that generates them.

KcNMiner was established in April in Stockholm. It sells two models — the Jupiter for $4,995 and the Saturn for $2,995 — which are currently sold out after unexpectedly high demand. KnCMiner said it also sold out a $600,000 supply of upgrade modules in under five minutes to existing customers who already have rigs.

The company has produced almost $29 million in total global sales in the past seven months, and is working to scale up its production to meet demand. Read more. 


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