2018 was not a good year to hold crypto.
It was also a really bad year to mine it.
Speaking to the Chinese Financial Channel, Korea Finance Center’s head, Yong Yongtai, said he believes 70 to 80 percent of Korean miners have not only ceased operation, but maybe also gone bankrupt.
Though the global bear market for crypto is in large part responsible for miners’ woes, their problems have been compounded by the collapse of the premium on crypto prices in Korea, aka the “Kimchi Premium.” Government action killed the premium, which had reached as high as 50 percent in January of last year.
Coingeek noted that Korean miners have had to contend with a lot, including government crackdowns, high prices for mining rigs, official hostility to ICOs and state pressure on crypto exchanges. The news site also notes, however, that things could have been worse – at least nobody shut down their electricity supply, as happened to miners in Abkhazia.
If you read Korean, take a look at this article in the Korean daily Hankyung. Part of a series marking crypto’s 10th birthday, the piece examines the troubles faced by Korean miners. Consider this, for a moment: at the end of 2017, a Radeon RX 580 graphics card with 8GB cost KRW 500,000-600,000 ($440-$530 USD at the time of writing). Sell it used after your mine has gone belly up, and you’ll get just KRW 40,000 ($35 USD).
Though this may sound apocalyptic, there is a silver lining to it all. Market corrections often have a cleansing effect, allowing a particular sector to get rid of dead wood and strengthening the serious players who remain. The problems faced by Korean miners were made worse by the overcrowded, overheated field that resulted from the herd of players who jumped into mining when crypto prices were sky high. Wiser investors – those who are in for the long haul – may benefit from a little constructive destruction, especially if recent developments lead to something approximating mass adoption of blockchain technology. As Derek Tonin at Coingeek writes:
“The crypto winter […] was sure to shake out some of the weaker hands. Smarter investors, and those who are patient enough to wait for broader adoption and business functionality for cryptocurrency, like the developers behind Bitcoin SV (BSV), will reap the rewards long term.”
Other Korean Crypto News
(Korea Herald)
(By Kim Eun-jin, BusinessKorea)
(By Swati Kishore, BTC Wires)
(By Jamie Redman, Bitcoin.com)
(Korea Times)
(Ledger Insights)
