Bitcoin Regulation Pushes Sale of BTC Guild

BTC Guild is one of the oldest mining pools in Bitcoin. The pool endeavours to provide their miners with a clean interface and performance statistics in order facilitate profitability. They first opened in May 2011.

Hours after the announcement that BTC Guild would be closing its doors, Michael Marsee updated his statement advising that he may sell the company. Multiple parties have expressed their interest in purchasing the mining pool. As a result the mining operation will continue as normal until a final decision is made at the end of this month.

“While I absolutely recommend users prepare to switch pools, it *may* not be needed.  If the pool is sold prior to November 30th, or is in the final stages of negotiation, then the pool will continue to operate, hopefully without any downtime in the transition to new management.” – Marsee

Many miners are happy the pool will continue to operate, but some have concerns over losing the professionalism Marsee brought to the table. Posts such as, “one of the greatest pools, hopefully it will be sold into the hands of someone as passionate about BTC Guild as you once were,” are not uncommon in the Bitcointalk forum.

Some have also questioned what the process will be in selecting the next owner. Marsee responded to this in saying:

“There will be vetting of interested buyers.  The last thing I want to do is sell the pool, only to have it turn into a Goxxing 2 years down the road and take my name down with it tangentially.  Obviously there is no way I can guarantee this, but I will do my best to make sure the team that takes it over appear to be capable.”

In the event that BTC Guild does sell, Marsee advises the community that negotiations will in part revolve around how long he will remain involved in the pool. Depending on the buyer and the final terms it is possible that Marsee will be around for as long as the company continues.

"Miners may wish to leave now, but it is possible that BTC Guild continues to operate under new management and the full closure does not happen"

BTC Guild is financially profitable, Marsee explains there were two main reasons for closing the the business.

“I have seen a rise in attack attempts, and things like Heartbleed/Shellshock which show that efforts are being put into compromising common Linux services if possible. Neither of those attacks had any affect on BTC Guild, but they were both reminders that under BTC Guild’s own code, there are many services which could be a doorway into the pool’s servers if a vulnerability was discovered.”

Marsee concludes the financial risks outweighs potential future profits:

“As pooled mining in general is shrinking due to large manufacturers creating private farms, the potential revenue for the pool has gone down as expected.” He continues, “One successful attack could cost close to a year of pool revenue, maybe more depending on what happens in the mining landscape over that period of time.  If something else happened in that time (subsequent attack or regulation forcing closure), it would mean continuing to operate the pool beyond this point has cost me more money than it might potentially make in the rest of its lifetime.”

The second reason given for closing the business was US regulation:

“Regulators are already taking stances against specific business types in Bitcoin, applying requirements which would be impossible for BTC Guild to operate under if they attempt to extend regulation into pooled mining, either directly or indirectly due to unclear definitions.”

As Marsee has no intentions to leave the US, and is uncomfortable with the idea of remaining there whilst moving BTC Guild overseas. This combination has directly affected his decision.

“New York is the first [state] to publicly put anything forward, but there are 49 other states which can put their own spin on things. […] it is a scary landscape to continue operating in."
—  – Marsee

B.Holmes, author of The Range of Illusion and The Private Key installments, is currently located in Thailand, researching and writing about crypto. You can follow B.Holmes on twitter @BanteringB, or contact via email: [email protected]