Bitmain’s Antminer Says Bitcoin Rig Sales Will Go on Despite CEO Jihan Wu’s Departure

Bitmain’s Antminer says that Bitcoin rig sales will go ahead following former CEO Jihan Wu’s sudden departure. It is also to be noted that last year due to corporate infighting, chip shipments were temporarily halted.

A news post on cointelegraph stated that Bitmain, a Bitcoin mining rig manufacturer, has said that business operations will continue despite CEO Jihan Wu’s untimely departure from the organization. 

It can be recollected that Bitmain’s ASIC mining rigs operations were stopped briefly last year in 2020. That was because of infighting and politics among the top leaders in the company. The Beijing-based hardware company saw their main founders Micree Zhan and Jihan Wu, trying to oust each other of the company.

Zhan had temporarily stopped one of their subsidiaries in Shenzen from shipping products. Crypto Coin Growth is a portal on cryptocurrency had this to tweet on the departure of Jihan Wu. 

Jihan Wu left the company abruptly on Wednesday after buying shares from Zhan and other shareholders worth $600 million. The team released a statement saying that business will go on as usual. 

Bitmain’s Antminer wants to inform you that sales and services will go on as usual despite the internal changes that have happened in the company. Micree Zhan and Jihan Wu founded Bitmain in the year 2013. 

They both managed to take it to new heights because, in 2018, it was the largest manufacturer of ASIC machines that were used in Bitcoin mining. Bitmain also runs two mining pools, Antpool and

Antpool and collectively account for 20% of Bitcoin mining and 30% of Bitcoin Cash (BCH) mining. Bitmain influence has seen its share of drama internally. In 2017, hard fork saw Bitcoin Cash broke away Bitcoin. 

The company then sided with Bitcoin Cash during the hard fork. It was a problem because there were disagreements on the size of the blocks used in Bitcoin’s design. Additionally, they also managed to get a massive contract of $35 million from Riot Blockchain.

Riot Blockchain placed an order for 15,000 of its Antminer S19 series machines. Riot Blockchain is a Nasdaq-listed cryptocurrency mining firm. According to BitInfoCharts, investors were concerned about the unsold merchandise from the New Year period. 

However, those fears have been evaporated, with Bitcoin mining’s profitability rising by more than 300%.

U-Turn For Chinese Bitcoin (BTC) Miners

China may be tough on Cryptocurrency trading; however, Bitcoin mining is seen to be a significant operation amongst Chinese cryptocurrency enthusiasts. In the last few months, BTC miners have been slowly fading off in China due to the bear markets, even going to the extreme of selling off their mining equipment by the kilos.

According to 8btc, a Chinese blockchain and crypto news source,  miners in China have been stocking up on Application-Specific Integrated Circuit (ASIC) chips. The main reason cited is the anticipation of the Bitcoin halving which is expected in May 2020.

Current Bitcoin Mining Profitability

As of now, Bitcoin mining may have almost zero profits. However, as the halving gets closer, it is expected to rise dramatically.

Bitcoin’s halving is expected to reduce inflation by 50%, and according to past statistics, Bitcoin will rise in price. Currently, miners receive 12.5 Bitcoins per block mined, and this will further drop to 6.25 Bitcoins in the next halving.

Companies such as Bitmain has faced a severe turn of events due to the bear markets in Cryptocurrency, with significant downsizing and delays in their IPO. However, with things picking up, Bitmain may start to walk.

Chinese Bitcoin Miners Getting Creative

The Chinese Bitcoin miners are doing all they can to reduce the costs of mining. From negotiating the best rates of buying used mining equipment to making deals with hydroelectric plants and mining farms.

Hydroelectric plants are bound to gain excess electricity generated thanks to a heavy rainy season this year.

It’s pretty clear bull season is around the corner, and both Cryptocurrency investors and miners are getting ready.  Mining equipment makers, on the other hand, will not profit as much as second-hand mining equipment are rising in demand.

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Crash and Burn: The Ruthless Bitcoin Mining Industry

Put it this way – the Bitcoin mining is not for the faint of heart.

Mining was once a hobbyist activity for crypto enthusiasts running Bitcoin nodes for fun and a sense of community more than to make money. Sure, there were always believers, but many people were just excited at the prospect of making their own, as Bitcoin godfather Andreas Antonopoulos calls it, “nerd money” without ever really considering the possibility that one day a Bitcoin would be worth even a single cent, let alone thousands of dollars.

How things have changed!

Mining is now a multi-billion dollar industry, with extreme risks and cut-throat competition. pressure of the bear market causing operations to mine at a loss, hoping for the best and in a bizarre but understandeable turn of events, even leading some miners to short the Bitcoin market to hedge against losses.

One of the criticisms of Bitcoin mining is that it favors the wealthy miners more and more as time goes on, with smaller operations being squeezed out in favor of huge, sprawling mining farms worth hundreds of millions of dollars.

The competitive and unforgiving nature of the industry was quite dramatically illustrated by the rise and fall of heavyweight mining hopeful GMO Internet, which proudly announced the production of an ASIC miner with higher performance capabilities than the Bitmain S9.

GMO Internet Takes On The World

GMO Internet probably thought they had it made. They had just released a miner more powerful than that of the most powerful mining company on the planet – what could go wrong?

The company’s downfall is beautifully described in a blow-for-blow tweetstorm written by Yasmine Elmandrja of ARKInvest:

Here’s what happened:

GMO didn’t just announce the launch of their new 7 nm miner, but boldy declared war on Bitmain while they were at it. While stating that they had respect for their top competitor, GMO said they would “top Bitmain” which is worth $12 billion USD at last count and become the number one leader in Bitcoin mining hardware manufacturing.

And Fails

Unfortunately for GMO, Bitmain’s S9 wasn’t the only competition – just the most visible one. Bitmain is large enough to lose and still win, absorbing failed experiments into the gigantic budget they’ve generated through years of success and market dominance. While GMO Internet is actually a larger company, their foray into Bitcoin mining was short lived.

GMO failed to do their homework – they beat the S9 alright, but so did several other mining companies whose products are portrayed in the chart above.

More accurately, the net present value (NPV) or profitability over time of those products is shown in the chart. You’ll find those competitors on the profitable side of the chart – unlike GMO.


Crash And Burn

The least profitable of six different products, GMOs miner launch was a massive failure which gained no traction, took gargantuan losses, and the internet giant ended up having to crash out of the mining industry altogether, selling off its machines wholesale and announcing a staggering loss of $218 million USD.

The whole mess goes to highlight the incredibly high stakes of the industry and the ever-shifting and improving standard of hardware quality. GMO Internet will live, but taking such a huge loss after announcing world domination is bound to have wounded the company’s pride and coffers a little, yet another casualty of the brutal “crypto winter” that continues to impact companies throughout the industry.

Lack of Bitmain Innovation May Lead to Decentralization

For years, centralization of Bitcoin mining has been a fear among network participants. Die-hard bitcoin evangelists and capitalist day traders alike agree that one entity controlling the hash rate could spell catastrophe for Bitcoin and for the cryptocurrency space as a whole, completely undermining the underlying principles described in the Bitcoin whitepaper and completely destabilizing the market and price action as well.

Bitmain, the world’s largest manufacturer of specialized ASIC Bitcoin mining equipment, is often accused and suspected of having a disproportionately high level of influence over the hash rate due to the giant mining pools like and Antpool which are under its control.

A report in July indicated that Bitmain actually already controlled 42% percent of the hash rate, a stunningly high figure with controlling 2.5% and Antpool controlling 16.5%.

An entity in control of 51% of the hash rate or higher would essentially have free reign over the network, being able to reject or accept transactions at will and carry out 51% attacks, whipping money out of thin air to become rich at the expense of the integrity of the network.

A successful 51% attack on Bitcoin would make the attackers incredibly wealthy while also catastrophically impacting the price of Bitcoin, perhaps permanently, due to the loss of trust in the network. While Bitmain are getting incredibly wealthy simply by manufacturing effective mining equipment, there is arguably an incentive for the company to attack Bitcoin simply to strengthen the Bitcoin Cash project, although CEO Jihan Wu has never given an indication that he would be interested in doing that.

For many, 42% is far too high for one company to control, and there are theories that Bitmain secretly controls other pools as well.

However, the 42% seen in July has actually dropped significantly instead of increasing as expected. 

As you can see from today’s report from Coin Dance, now controls 15.2% and Antpool controls 13.9%, a total of 29.1%.

Why the sudden drop? The answer may lie in the recent lack of innovation seen in Bitmain products coupled with the increasingly more effective hardware released by other companies finally starting to break Bitmain’s ominous monopoly on the largest cryptocurrency network in the world.

We covered the various mining companies and hardware options in our recent article “Mining Wars,” which showed that Halong and other companies are doing great work catching up and surpassing Bitmain’s performance. but what has Bitmain been up to?

Adamant Capital founder Tuur Demeester describes the breaking of the monopoly as the “Commoditization of Bitcoin,” and agrees that the threat to the network is significantly lower with Bitmain operating on a more level playing field.

Demeester cites a recent twitter thread posted by Blockstream’s Samson Mow, someone in indirect competition with Bitmain due to the company’s support for Bitcoin Cash over Bitcoin. Mow frequently posts critiques of Bitmain’s progress and activities, but this time there may be some substance to what he’s saying.

Bitmain’s New Release a Letdown?

Mow used to work as COO for BTCC crypto exchange before heading up Blockstream, and while he is enormously biased when it comes to discussing Bitmain, it’s safe to say that he knows his Bitcoin mining.

“Let’s take a closer look at Bitmain’s announcement at WDMS Mining Conference for their “next gen” 7nm ASIC chips. To most people this may seem like a big deal and good news, but actually the announcement shows things aren’t looking too good for Bitmain.”

  • Mow states that the announcement is vague and fails to mention when exactly the new next-gen chip miners will be released for public sale, which is true.
  • The announcement also states that the 7nm chip will include over a billion trannsisters. Mow says that the statement is deliberately misleading, stating that chip with a billion transistors “sounds impressive to people outside the industry, but it’s not.” It’s like saying “the car will have 4 wheels,” according to Mow, and 8nm or 10nm chips could eqally have a billion transistors.
  • The next bone Mow has to pick with Bitmain is the “lab testing” statement. Bitmain reports results of 32J/TH energy efficiency in lab testing – however, as Mow points out, lab testing always demonstrates the peak performance in ideal lab conditions which are nearly impossible to replicate outside of the manufacturer’s laboratory, making this an inflated figure which does not reflect the energy efficiency which will be experienced by Bitmain customers, as the average efficiency rating is still unknown.
  • It’s also worth pointing out that these are the results for the chip itself, not an entire bitcoin miner – it is unclear how relevant the results be if at all once the chip is tested inside an actual ASIC miner.
  • Mow also mentions that the S9’s chip was initially marketed as having an energy efficiency rating of 75J/TH. In real world situations, the S9 runs at around 98J/TH, or about 30% higher power consumption than reported in the lab. “So it’s likely the new Bitmain miner with 7nm chips runs at 55J/TH at best.”
  • Mow compares the Bitmain announcement, which explained that a new chip had been made for release “soon” along with lab test results outside of a miner, to the launch of the WhatsMiner M10 which had a live miner demo with real stats not measured in lab conditions.
  • Finally, Mow points out that the WhatsMiner uses a 16nm ASIC chip which can be manufactured at half the cost of a 7nmchip, and speculates that even if the 7nm launch results in a good quality miner, the cost may be too high for it to be a feasiboe solution for many miners.

This is all rather incredible sounding given the huge monopoly Bitmain has historically had on Bitcoin mining. Could it be that the tables are beginning to turn and other competitors will begin to snap up larger tracts of the has rate?

Apart from the usual concerns associated with capitalist monopolies, the healthy competition from other miners should indeed prove to bring Bitcoin mining back from the brink of total vulnerability and into a more manageable zone of free market competition and decentralization.

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Bitmain’s IPO — Is This The Holy Grail Its Founders Are Praying For?

As Bitmain’s disastrous Q2 financials have yet to be released, investors aren’t thrilled with the company. Some have even gone so far as to start asking for their money back.

It’s now been more than 60 days since the end of Bitmain’s second quarter, and the company has yet to release their numbers. This has left many investors skeptical about Q2’s numbers, and also at the fact that there were no big names that invested in the company’s IPO.

IPO Investors Unhappy

With the recent events that have taken place, Wu Jihan, Bitmain’s co-founder, is now rushing to put together a $1 billion pre-IPO round before Q2’s numbers are released.

So far, the pre-IPO is not looking very promising. For the most part, investors have not been happy with Bitmain’s actions, and some have even begun asking for money back or demanding considerable discounts for being part of the IPO.

Fear Of Missing Out

In the past, Bitmain has made mentions of several big names that were interested in investing in the company’s IPO. However, as more information comes to light, the big names that Bitmain mentioned, such as Softbank, Tencent, and Temasek, are nowhere to be found.

Many investors have now been lead to believe that Bitmain only mentioned such names in hopes of creating FOMO and drawing more people to invest in the IPO. Investors are unhappy with Bitmain, not just about the lack of interest from big name companies, but also at the deteriorating numbers concerning the IPO.

As it stands, Jihan is still on call with investors. However, it would seem that his, as well as his company’s name, has been significantly tarnished by the recent events.

According to recent Tweets, Bitmain’s contracts are crafted in adherence to Hong Kong Law, which strictly prohibits any omission of information. Due to this, there have been rumors of investors looking to file lawsuits against the company.

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