The Halving Case: Block Mining v. Hosting Source

What Happened

Block Mining had its machines hosted under a colocation deal where the host, Hosting Source, was paid with a share of the mining rewards. Bitcoin has a built in event called the halving. Roughly every four years, the reward for mining a block drops by half. In April 2024 it fell from 6.25 to 3.125 bitcoin per block. For a host paid in rewards, the halving means its share of each block reward falls by 50 percent on a date known well in advance.

According to the court record, as the halving approached the host cut power to the rigs, disabled the customer’s remote monitoring, locked the facility, and directed the mined bitcoin to itself. Block Mining sued in federal court in Washington state. In December 2025 the judge granted summary judgment for Block Mining. According to the ruling, the rigs were the exclusive property of Block Mining, the host was liable for conversion, and Block Mining was entitled to the market value of the diverted bitcoin. Block Mining’s counsel described it as the first major court decision that turned on the halving. The public summary of the ruling cited below does not describe Hosting Source’s arguments in detail.

Why This Case Draws Attention

I follow this case because it connects a contract structure to a fixed event on the bitcoin calendar. Revenue share hosting deals have features that appeal to both sides. The customer pays little or nothing up front, and the host’s income rises and falls with the output of the machines. Because the halving date is known years ahead, both parties to a revenue share deal know in advance that the reward per block will drop by half.

The case also involved remote monitoring. According to the record, the customer’s monitoring access was disabled at the same time as the power cut and the facility lockout. Questions about monitoring access, payout addresses, and site access appear in other hosting disputes too, including Compass Mining v. Dynamics.

Issues This Case Raises

The ruling settled the claims in this case. It also points to broader questions on which hosts and customers could take different positions.

• How does a revenue share deal account for the halving? A host may see the halving as a change in economics that the deal did not fully price in. A customer may see it as a known event that both sides accepted when they signed. Agreements differ on whether and how rates adjust after a halving.
• Who controls the payout address? In some hosting setups the customer sets the payout address and holds the pool account. In others the host manages those settings. The ruling here concerned bitcoin that, according to the court, was directed to the host.
• What monitoring access does each side have? Hosts and customers divide remote monitoring in different ways. Some customers keep independent read access, and some rely on the host’s systems. This case shows that monitoring access can itself become part of a dispute.
• How is diverted bitcoin valued? The court awarded the market value of the diverted bitcoin. Valuation can depend on which dates and prices apply.

For background on mining disputes generally, see the bitcoin mining practice page; hosting agreement disputes have their own page. For a walk through of common hosting contract clauses, see Mining Hosting Agreements: Terms That Recur.