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Popular Bitcoin mining company Cointerra Inc. seeks bankruptcy

The online currency Bitcoin may not be exactly mainstream yet, but its popularity has apparently been growing among some populations of online users in Washington and across the world. With the rise in use of Bitcoin, so-called mining companies began forming to manufacture and distribute application-specific integrated circuits -- ASIC -- to Bitcoin users. However, the popular mining company Cointerra Inc. recently filed for bankruptcy amid customer complaints about its product.

Before Cointerra revealed that it would file for bankruptcy, it appeared to be thriving on the market. In 2013, it snared $1.5 million for investments in a new ASIC that could be used to mine Bitcoin. Running at about two terahash every second, the ASIC was supposed to arrive at customers' doorsteps in Dec. 2013 and was priced at nearly $14,000.

Upset consumers have raised complaints that Cointerra was never able to make good on its ASIC, meaning paying customers never actually received the circuits for which they paid. One man in a state neighboring Washington even took Cointerra to court for this issue in June 2014. Following this failure, the value of a Bitcoin plummeted a shocking 70 percent, which makes the cost of developing and manufacturing necessary mining products more expensive for less return.

Cointerra has filed for Chapter 7 bankruptcy, which will liquidate all of its assets, which have been estimated at $50 million. Its debt was placed at a similar value. Although Cointerra chose not to disclose the exact reason it is seeking bankruptcy, the company's recent challenges coupled with the downward trend of Bitcoin's value may have played a role in the decision. Although it appears that this is the end of the road for Cointerra, filing for bankruptcy can help deal with its remaining debt before closing up its doors for good.

Source: forexminute.com, "Cointerra Inc. Goes Bankrupt, Files for Chapter 7 Bankruptcy", Deepak Tiwari, Jan. 28, 2015

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