The 10 Biggest Cryptocurrency News Stories Of 2018

The cryptocurrency industry was in for a rude awakening in 2018 as a precipitous decline in the value of Bitcoin resulted in layoffs, bankruptcy filings, and facility closures across the industry.


Bubble Burst

The cryptocurrency industry experienced a rude awakening in 2018 as a precipitous decline in the value of Bitcoin and similar currencies resulted in layoffs, bankruptcy filings, and facility closures across the industry.

The erosion in the currency's value had a pronounced impact on cryptocurrency mining, with profitability waning even for producers with scale and unsold graphics cards amassing as people quickly abandoned the idea of mining for cryptocurrency at home.

But the news wasn't all negative. From prospective cryptocurrency smartphone apps to scaling up blockchain data centers and blockchain identity platforms, some cryptocurrency vendors managed to find the glimmer of light in an otherwise bleak landscape.

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Here's a look at 10 significant pieces of cryptocurrency news that reshaped the market over the past year.

10. Blockchain Media Startup Civil's ICO Falls Flat

The Civil Media Company wanted to create a new economy for journalism using blockchain, but in October was unable to sell $8 million worth of its cryptocurrency, according to TechCrunch. The company ultimately ended up selling just $1.4 million worth of cryptocurrency tokens.

Civil had reached out to The New York Times, The Washington Post, Dow Jones and Axios, but failed to generate interest in its token, according to the Wall Street Journal.

The company, though, wasn't deterred, and planned to conduct a new token sale fundraiser in a simpler format. Once the newly reformatted token sale is completed, Civil plans to launch three new features: a blockchain publishing plugin for WordPress, a community governance application, and a developer tool for building without blockchain experience.

9. Civic Works To Get More People Onto Blockchain Identity Platform

Civic coin was developed in 2017 and provides a personal identity verification protocol to their users that takes advantage of distributed ledger technology for better management of digital identities. Specifically, inputting someone's personal identification data to Civic would allow any business to cross-check the information without forcing the individual to enter the same data twice.

The company announced in September that it would be paying for identity checks for users and business partners until the end of 2018, according to CoinDesk. Every new user that's had his or her identity verified on Civic makes it a little more attractive for the next company looking for an identity platform, CoinDesk said.

Civic works with businesses such as Annheiser-Busch that need to be able to verify a user's identity, Civic said. For instance, Civic can help ensure that Budweiser beers from a vending machine are only being distributed to people of a legal drinking age.

8. Bitcoin Mining Revenue Soars, But Profitability Remains Elusive

Bitcoin miners raised more than $4.7 billion in the first nine months of 2018, but rising electricity prices have rendered cryptocurrency mining also completely unprofitable, even for the world's biggest pools, according to tech news organization TNW.

Increased adoption of Bitcoin means that mining revenue surpassed figures from the first nine months of 2017 by $1.7 billion, TNW said. However, even the world's largest mining pools are struggling to make a profit from mining Bitcoin.

The situation is so rough that Bitmain – the largest mining pool operator in the world – will be forced to average out electricity costs across countries to maintain a sense of profitability for all of its facilities, TNW indicated. As a result, TNW said Bitcoin mining is becoming exclusively for the big players, with the ideal of a profitable, community-run cryptocurrency all but lost.

7. Bitmain To Build $500M Cryptocurrency Mining Farm In Texas

Bitmain announced in August that it plans to begin operations at a brand new blockchain data center in Texas in early 2019, according to TNW. The company expects it'll take two years for the mining farm to run at full capacity, at which people it'll employ 400 people.

The company is best known for its specialized cryptocurrency mining hardware called pools that are widely used by large mining groups, TNW said. The company posted profits of more than $1 billion in the first three quarters of the year, and is reported to have a valuation of as high as $12 billion.

But Bitmain has grappled with challenges as well. The company announced in December that it would be closing its Israeli development center and laying off 23 people due to the sharp fall in the price of Bitcoin and the general decline in the digital currencies market, according to Israeli financial newspaper Globes.

6. Cryptocurrency Mining Firm Files For Chapter 11 Bankruptcy

Giga Watt filed for Chapter 11 bankruptcy protection in November after shareholders claimed that the U.S.-based cryptocurrency mining firm could no longer pay off its debts, PCMag reported. The company had been offering remote cryptocurrencies mining hosting plans as well as selling mining hardware rigs over its website.

Giga Watt originally planned to build out 22 cryptomining mini-data centers to serve its customers, PCMag said. However, the company is now only hosting one pod for its clients, according to local news organization iFiber One.

Giga Watt's business was large enough to make it one of the bigger cryptomining firms in the world. But according to documents filed at the time of bankruptcy, the company possessed less than $50,000 in assets, but owed between $10 million and $50 million to its creditors, according to PCMag.

5. Samsung Looks Info Launching Bitcoin App With Galaxy S10

Samsung is developing a bitcoin app that might be launched with the Galaxy S10, according to a December report in SamMobile.

The cryptocurrency service will include a cold wallet for saving cryptocurrency, public and private keys, as well as signing private keys for cryptocurrency transactions, SamMobile reported. In addition, the offering will have a crypto wallet to support transfers, viewing account information, and transaction history.

Samsung's cold wallet app will enable users to import their existing wallets from third-party services like Metamask or TrustWallet, SamMobile reported. The cryptocurrencies and tokens supported initially may include Bitcoin, Ethereum, Ethereum-derived token EPC20, and Bitcoin Cash, SamMobile said.

Accounts created using the app will be stored on the blockchain network with complete anonymity, SamMobile said, meaning Samsung won't have access to the data. Samsung didn't immediately respond to a request for comment from CRN.

4. Blockchain Platform Steemit Lays Off 70% of Workplace

Blockchain-based social media platform Stemmit laid off 70 percent of its workforce in Novvember due to falling cryptocurrency prices and high operational costs, according to CryptoSlate.

Steemit generated a considerable amount of buzz when it launched in 2016 and became one of the six largest cryptocurrencies with a market cap of $157 million, CryptoSlate said. But as the hype subsided, Steemit largely stalled with user numbers, grappled with problems surrounding adoption and integration, and never quite achieved its expected critical mass.

The company's current market cap stands at just $106 million, down substantially from its peak, according to CoinMarketCap. In addition to its own problems brought on by technology and user issues, CryptoSlate said Steemit also suffered as a result of the overall crypto market downturn.

3. Nvidia Graphics Cards Remain On The Shelf As Crypto Bubble Bursts

Nvidia in August reported a huge drop in graphics cards sales for cryptocurrency mining rigs as Bitcoin's value sunk to a yearly low, according to PCMag. The company had originally anticipated cryptocurrency-specific product revenue reaching $100 million during the second quarter of 2018, but it actually came in at a mere $18 million.

As a result, Nvidia said that graphics cards sales to the mining market would only provide a "negligible" contribution to overall revenue going forward, according to PCMag, meaning that the company would no longer even include that in future financial forecasts.

Three months later, Nvidia said it had a glut of unsold graphics cards due in part to cryptocurrency miners no longer buying them, PCMag said. Specifically, the company indicated it was experiencing excess inventory in midrange graphics cards as a result of the "post-crypto hangover," which temporarily inflated price for the graphics cards.

2. ConsenSys Cuts 13% Of Staff As Priorities Evolve

Ethereum production studio ConsenSys let go of 13 percent of its 1,200-person staff in December as part of as a new business strategy.

The funding of many businesses and organizations in the Ethereum community is directly tied to the price of Ether (Ethereum's native currency), which had fallen to less than a tenth of what it once was, according to ETHNews, which said it's unclear whether the price of Ether is to blame for the cutbacks.

The company said its new strategy, dubbed ConsenSys 2.0, will focus on heuristics, and the creation of usable, quality, popular products. A Forbes profile published in December estimated that ConsenSys's annual burn rate was in excess of $100 million.

1. Industry Sheds Jobs As Cryptocurrency Values Plummet

The 2017 market boom resulted in a hiring spree at hundreds of startups developing new uses for blockchain as well as billions of dollars raised through initial coin offerings, according to The Wall Street Journal. Then the market cratered.

Bitcoin is down more than 80 percent from its December 2017 high, with the total market value of all cryptocurrency plummeting to just $111 billion, down 87 percent from its early January 2018 high of $827 billion, The Wall Street Journal found.

Nearly 86 percent of all initial coin offerings from 2017 are trading below their listing price, according to Ernst & Young, while 30 percent have lost almost all of their value. And the number of searches on for jobs related to blockchain or cryptocurrency fell 3 percent in the 12 months ended October 2018, The Wall Street Journal reported. A year earlier, searches had increased by 482 percent.