KnCMiner Could Return To Enthusiast Hardware, If The Price Increases

Enthusiast hardware occupies a middle ground between consumer equipment priced from $500 to $2,000 and enterprise-grade systems. Cole does not see consumer miners returning to profitability in the near term. The enterprise threshold exists for a reason: miners pursuing profit today need either a full-scale mining operation or access to cheap electricity, often free. Most hobbyists cannot clear that bar.

Cole's comments carry weight as a potential signal, though he made no formal announcement. KnCMiner abandoned the consumer market years ago after early products won acclaim but later shipments stumbled with shipping delays and quality control issues. The company shifted its focus to enterprise ASIC miners, its own mining operations, and cloud mining ventures. Those moves appeared to pay off, but Swedish media reported the firm laid off 25 percent of its workforce due to mounting competition from Chinese miners and new energy taxes in Sweden. A $12 million investment round that included Accel Partners provided some relief.

Bitcoin's price sets the parameters for Cole's decision. The currency peaked above $1,200 before collapsing below $200. Cole indicated that $400 marked the threshold where selling enthusiast hardware stopped making financial sense. Bitcoin trades near that level today. For enthusiast hardware to return to viability, the price would need to break upward and hold those higher levels.

Two obstacles stand in the way. Mining difficulty adjusts over time as more computing power enters the network, eroding any advantage new miners might capture. The Bitcoin halving—expected in 2016—cuts the block reward in half, reducing the revenue available to miners. Cole and others in the space will need to weigh these structural forces before dedicating resources to lower-margin hardware again.