Bitmain Adds 5 New Billionaires to China’s Wealthiest List

China’s latest rich list for 2018 sees five billionaires joining China’s wealthiest for the first time thanks to Bitmain’s market lead on cryptocurrency mining. The Hurun Research Institute 2018 Hurun Rich List now includes Bitmain’s founders, CEO and Vice President. The five have a combined wealth equalling nearly $9 billion USD. Bitmain Billionaires Though Jihan Wu is the name most associated with Bitcoin, co-founder Ketuan Zhan is the largest shareholder of Bitmain. Wu owns 20.25

The post Bitmain Adds 5 New Billionaires to China’s Wealthiest List appeared first on Bitcoinist.com.

Continue Reading

Annual List of China’s Richest Includes Crypto Entrepreneurs

China’s Hurun Research Institute has released a catalogue of the richest individuals in the country, listing cryptocurrency entrepreneurs among others.

The annual Hurun China Rich List, a catalogue of individuals in the country with a net worth over 2 billion yuan ($209 million), has listed several crypto entrepreneurs among China’s financial elite, according to a release published Oct. 10.

The Hurun Research Institute released the 2018 Hurun China Rich List of the richest individuals in the country, with at least 13 entrepreneurs whose business is related to cryptocurrency mining and trading.

The ranking includes such industry players as Micree Zhan Ketuan, co-founder of computer chip manufacturer of and software firm Bitmain Technologies, in the top 100 richest people in China, with an estimated wealth of 29.5 billion yuan ($2.4 billion). The next richest crypto entrepreneur is Bitmain co-founder Wu Jihan, taking the 204th place, with a personal worth of 16.5 billion yuan ($2.3 billion).

Zhao Changpeng, the founder of the largest cryptocurrency exchange Binance, was ranked 230th, with an estimated wealth of 15 billion yuan ($2.1 billion). Zhao is followed by OKCoin crypto exchange founder Star Xu and founder of Huobi Li Lin.

Zhang Nangeng, founder of computer hardware manufacturer Canaan Creative, and Hu Dong, founder of Bitcoin (BTC) mining machine producer Ebang International Holdings are listed in the Hurun report as well.

The list also includes BTC whale and serial investor Li Xiaolai, with an estimated wealth of 7 billion yuan ($1 billion). Recently, Li said that he will no longer invest in future blockchain projects. “So, if you see ‘Li Xiaolai’ associated with any project (I have been associated with countless projects without my knowledge, 99% is not an exaggeration), just ignore it,” Li warned.

In recent months, Bitmain has been making headlines, claiming to have the participation of high-profile investors like Chinese tech conglomerate Tencent, investment firm DST Global, and Japan’s SoftBank, in the firm’s pre-IPO in August. The companies have subsequently denied their involvement. A Softbank official told Cointelegraph that “neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal.”

Singapore-based investment company Temasek also officially denied its participation in Bitmain’s IPO, stating that “Temasek is not an investor in Bitmain, and has never had discussions with, or an investment in Bitmain. News reports about our involvement in their IPO are false.” DST Global also confirmed that it had “never invested” in Bitmain’s pre-IPO.

Continue Reading

Crypto Mining Becomes Less Profitable, Shifts Towards ‘Bigger Players,’ Report Shows

Diar states crypto mining has seen record revenues in 2018, but the prices for electricity will soon make it profitable only for “bigger players.”

Bitcoin (BTC) miner revenues for the first six months of 2018 have already surpassed results in 2017, but the miners themselves see little profit, weekly crypto outlet Diar reports Monday, October 8.

As per the Diar report, the rewards and fees for BTC miners have already reached $4.7 billion in the first three quarters of 2018, around $1.4 billion more than the profits in all of 2017. Miners still gain 54,000 Bitcoin monthly, the outlet continues.

However, mining is gradually becoming profitable only for “big guns” as electricity prices are constantly increasing. Diar assessments show that the miners paying retail electricity prices have shifted towards unprofitability for the first time this September.

Revenue and profit ratio for miners in 2018. Source: Diar

The Diar report notes:

“Bitcoin mining has, at least for now, and most likely in the future, moved into the court of bigger players with deep pockets.”

However, even major companies might have to adjust their business, according to Diar. For instance, Chinese mining giant Bitmain, which received 95 percent of its revenue in 2018 from the sale of miners, is “acting like a swing producer” and opening pools in U.S. in order to keep the network profitable for miners.

As Diar wrote in the same weekly issue, San Francisco-based crypto exchange Coinbase’s U.S. dollar volumes have hit a 1-year low in the third quarter of 2018. However, in comparison to the same period last year, BTC trading volume is now slightly higher ($5.4 billion against $4.6 billion in 2017). In the meantime, exchange Bitstamp’s trading volume of BTC was around $4.4 billion, while it was at around $4.6 billion in the same period last year.

As Cointelegraph has previously reported, Bitmain announced a $500 million investment in August in blockchain data center and mining facility in Texas. The construction was estimated to be launched in early 2019, with plans to bring in 400 local jobs in the first two years.

Continue Reading

Bitmain IPO: Trial by Fire for the Mining Equipment Giant

While Bitmain’s IPO launch date is getting closer, recent retractions of large investor participation, increased competition, and possible losses may affect the company’s leading position on the market.

The views expressed here are the author’s own and do not necessarily represent the views of Cointelegraph.com

Bitmain, the world market leader for mining equipment, on the eve of an epic IPO — which could become the largest in the entire history of the IT market — is experiencing an equally epic publicity and information attack. Despite the fact that the upcoming IPO is getting closer, as demonstrated by a draft application for registration recently filed by the company on the Hong Kong Stock Exchange, its success may be questionable. 

The fact is that, since Aug. 21, official refutations have started to appear on the internet from companies that were previously listed in the Bitmain investor list. Beginning with SoftBank, the rumor about participation in the company’s IPO was also denied by DST Capital.

Without making unequivocal conclusions, let’s try to figure out whether there is any smoke when it comes to Bitmain’s IPO claims — to which its founder, Jihan Wu, prefers not to respond.

Reconnaissance

On June 6, media presented information that Bitmain’s IPO on the Hong Kong Stock Exchange was scheduled for September 2018 and, according to investment analysts, was expected to raise anywhere from $3 billion to $18 billion, thereby becoming the largest initial public offering in the IT market’s history, beating Facebook with its $16 billion.

However, on August 6, the company gave a more cautious outlook on the IPO date, taking the gap between the fourth quarter of 2018 and the first quarter of 2019. Nevertheless, a draft application for the listing on the Hong Kong Exchange indicates that the giant’s intention is getting stronger and the date for the launch of the initial offering is getting closer. Additionally, as part of the approval process, Bitmain has submitted a prospectus where it reported new financial data which was closed before.

According to the updated information, Bitmain earned $701 million in net profit in 2017, while various estimates show that the annual income for the same period ranged from $1 billion to $4 billion. A gross income claimed for the first half of 2018 exceeded the one received for the whole previous year and comprised $743 million, despite a significant fall in the crypto market.

However, according to the report published by BitMEX at the end of August, Bitmain could face “visible losses, which might be caused by “allegedly investing the majority of its operating cash in 2017 in acquiring Bitcoin Cash (BCH).” Experts believe the estimated potential losses could reach $328 million.  Additional calculations show that the ratio of the $2.5 billion revenue to the $701 million net profit in 2017 is more positive than that of 2018 ($2,5 billion and $743 million). Further analysis made by the BitMEX team implies “Bitmain are currently loss-making, with a negative profit margin of 11.6% for the main S9 product and a margin of over negative 100% on the L3 product.”

Given the continuing decline in Bitcoin’s price and the challenging situation in the mining hardware market, some experts suggest that the company’s IPO may become a challenging task. Although the corporation still remains the industry leader, with 60-70 percent share of the ASIC production market.

As of the beginning of October, the capitalization of Bitmain has reached $12 billion with its latest funding round in August 2018 reported to be $442.1 million. In total, Bitmain has raised $784.8 million to date and was rumored to have accumulated around 51 percent of the Bitcoin network hash — or that it was at least close.

One of the reasons the research group Sanford C Bernstein & Co. is given as an argument on why Bitmain may strongly need to start its IPO, is increased competition. Wall Street may also be occupied by the company Chinese Canaan Inc., whose value is estimated at about $500 million and Ebang International Holdings Inc., registered in the Cayman Islands. Both companies also announced an IPO with plans to begin before the year ends, which will also take place on the Hong Kong Stock Exchange. According to Reuters, Ebang is planning to raise up to $1 billion, while Canaan is targeting at least $400 million, which in total is 2 times smaller than the sum planned by Bitmain.

The challenges Bitmain is facing

In the middle of the summer, the media reported that Bitmain had held its first round of the pre-IPO and that among the investors there was a co-owner of Uber, Japanese SoftBank and Chinese IT giant Tencent, which developed the WeChat platform. WeChat itself is reported to be ahead of Facebook in terms of capitalization with the market valuation of $534,5 billion against $519,4 billion. Later, the insider information was released about DST Global participating in the pre-IPO.

Neither references to Bitmain’s publications disseminating information, nor the company’s comments on these data were provided. Information was distributed in Twitter with a reference to an investor deck screenshot.

By August, all three companies named originally as investors in Bitmain’s pre-ICO, have issued public denials. But this was only the beginning.

In late August — theoretically on the eve of September’s IPO, the analytical agency Sanford C. Bernstein & Co., which in 2000 merged with Alliance Capital, published a detailed report analyzing the challenges of Bitmain’s IPO.

The study is devoted to Bitmain and contains clear indications of the Chinese giant’s loss of technological advantage, connected with increased competition and the purchase of a large amount of Bitcoin Cash, which could pose a significant risk to the company if the digital token declines. Moreover, Bloomberg, which detailed the report of Sanford C. Bernstein & Co., pointed out that analysts directly called for Bitmain’s technological partner — Taiwan Semiconductor Manufacturing Co. — not to produce chips for ASIC-miners without a full prepayment.

Meanwhile at the Bitmain headquarters

The Chinese giant is consistently expanding its mining empire. In August, Cointelegraph reported that NVIDIA left the mining equipment market, unable to withstand the severe competition of Bitmain. Thus, it appears that 85 percent of the world’s mining equipment production market has come under the control of Bitmain, a figure with which the analysts of Sanford C. Bernstein & Co. agree.

More questions are raised by the above mentioned purchase of BCH, which according to some users, was either a risky investment, given the unstable market situation, or was made with the purpose of not disclosing Q2 income.

At the presentation for investors, Bitmain reported that, since the end of 2017, it consistently traded Bitcoin Cash for any available Bitcoin, despite the fact that the company lost about $500 million. A slide taken from an investor deck was published in Twitter, and caused a stormy reaction in the crypto community.

While information about the future IPO and the monopolized market was teeming with passion, Jihan Wu himself shared his opinion regarding the futility of ICOs and the prospects for Bitcoin Cash in an interview with Coingeek.

An imperturbable 32-year-old Chinese billionaire called ICOs “a bubble that will last for two years and then burst,” followed by the securities of crypto startups released on the blockchain. The Bitmain owner predicted a rate of $100,000 of Bitcoin’s fork — Bitcoin Cash (BCH) — and a dominant position in the market by 2023, as he believes only BCH corresponds to the real vision of Satoshi Nakamoto. Having intrigued Bitcoin evangelists in this way, Jihan Wu completed the interview without commenting on the prospects of his future IPO.

Possible scenarios

Bitmain has accumulated a lot of BCH, but there is no liquid market and there is no demand outside the market. A lot of ASIC-devices were released, but their profitability decreases as the complexity of BTC mining grows. So far the company has not developed any AI initiatives since the moment Jihan mentioned his plans to take on Nvidia.

The IPO process may be hindered by some of Bitmain’s mistakes, such as “producing too many units and buying too many speculative altcoins in a bull market,” BitMEX analysts say. Still they are not so catastrophic and “typical” of mining producers management teams.

The exchange specialists predict that in order to keep their industry dominance and achieve higher results, “the Bitmain management team may need to improve their management of company resources. Once the company goes public, capital allocation decisions in this volatile and unpredictable market will be difficult enough, letting emotions impact too many investment decisions may not be tolerated.”

Perhaps, the giant will reconsider their target sum for the IPO due to revealed losses, and increased competition.

Continue Reading

Sia Announces Hard Fork to Brick Bitmain ASICs

After close to a year of debates within its community, Sia has finally gone ahead with a hard fork to brick out Bitmain and Innosilicoin ASICs. Following the hard fork, only miners using Obelisk hardware will be able to mine on the blockchain. Pushing Back on Bitmain and Innosilicon ASICs Sia cofounder, David Vorick announced the news in a blog post on October 1st via the project’s Medium Account. According to Vorick: Sia is forking today

The post Sia Announces Hard Fork to Brick Bitmain ASICs appeared first on Bitcoinist.com.

Continue Reading

Bitcoin’s Energy Consumption in Summer: Rise or Fall?

Bitcoin’s rising energy consumption doesn’t rise quite so fast in the summer.

It’s no secret that Bitcoin (BTC) mining is an expensive business, and in more ways than one. Not only has it become less profitable since July 2016’s halving of mining rewards to 12.5 BTC, but competition among miners and an increasing hashrate have resulted in ever-higher energy consumption, with all the damage to the environment that implies.

Yet, as energy-intensive as Bitcoin mining is, a question still remains: Is there a seasonal variation in the cryptocurrency’s energy consumption? Even if consumption is rising on the whole, does something different happen during the summer months?

Well, data hasn’t been collected on Bitcoin‘s electricity consumption for long enough to provide a truly authoritative answer to this question, yet what data there is suggests that the summer brings a slight, but noticeable weakening to the rise in BTC’s energy consumption. This is most likely because, globally, energy prices increase during the summer months, putting a strain on the profitability of Bitcoin mining.

Steady growth

When it comes to the question of Bitcoin’s energy consumption, the first thing that needs to be stated is that direct data on consumption hasn’t been made available by the big mining companies. Still, a number of indirect estimations have been produced over the years — based on such metrics as profits, network difficulty and hardware efficiency — and these all show that consumption has been increasing consistently.

Key Network Statistics

Back in June 2014, the first rigorous study on BTC energy consumption was published by Karl J. O’Dwyer and David Malone of the National University of Ireland Maynooth. It estimated Bitcoin’s annual energy cost to be something between 0.1–10GW (accounting for the uncertainty as to which mining equipment was being used), although the authors settled — though without fully explaining why — on 3GW, which was equivalent to Ireland’s yearly consumption level at the time.

Since then, the most widely cited data has come from the Bitcoin Energy Consumption Index (BECI). Produced by analyst Alex de Vries, the BECI settled on a higher figure than that of O’Dwyer and Malone’s model, and it has continued to reveal steady, day-to-day increases in BTC consumption ever since it started collecting data in February 2017. In December, it put annual consumption at 32TW/h per year — equal to 3.65GW. By contrast, its latest figure — for Sept. 12 — indicates that the Bitcoin network is now eating up 73TW/h — or around 8.8GW – each year. However, in a standalone, peer-reviewed paper from May, de Vries put annual consumption at 2.55GW (22.4TW/h).

As the table below illustrates, de Vries’ data shows that there have been very few dips during this overall rise. The strong increases continued even during the first half of 2018, when the BTC price saw a considerable correction from its December high of $19,900. For instance, when the price fell by 46.2 percent over three months to the Feb. 17 price of $10,707, BTC’s energy consumption increased by 42.6 percent over the same period — from 34.96TW/h to 49.85TW/h. And when BTC’s value dropped by 9.87 percent between April and the end of June (to $6,366), its energy consumption rose by 20.9 percent (to 71.1TW/h).

Bitcoin Energy Consumption Index

This goes to show that, despite the recent ups and downs, BTC’s price was high enough to continue driving increased competition among Bitcoin miners, who added capacity to the network in a bid to claim freshly minted coins for themselves. This has had the overall effect of pushing energy consumption ever upward, undermining the sense that there’s any seasonal variation.

Marc Bevand — an entrepreneur who has produced his own calculations on BTC energy consumption — largely agrees with this impression.

“We don’t notice seasonal variations because the network has been growing quite fast, so any — presumably small — seasonal variation is lost in the large amounts of hashrate capacity — and thus energy consumption — being added every month. For example, a year ago, the hashrate was at seven exahash/sec and has grown to 45 exahash/sec today.”

However, despite the overall impression that there has been one continuous increase in consumption, some subtle variations are observable in the data that de Vries has collected as part of the Bitcoin Energy Consumption Index.

For one, if you calculate the growth in consumption between the 2017 summer months and compare it to the three previous months, you’ll see a slackening in the overall rate of increase. For Feb. 10 to May 10 (Feb. 10, 2017 being the first date for which data is available), consumption increased by 33.1 percent:

  • February 10 – 9.6TW/h
  • May 10 – 12.8TW/h

But between June 1 and August 31 (meteorological summer), consumption increased by only 21.9 percent:

  • June 1 –13.42TW/h
  • August 31 – 16.37TW/h

BTC Energy Consumption VS BTC Price 2017

What’s interesting about this is that Bitcoin’s price increased by 96 percent between June 1 and August 31, 2017:

  • June 1, 2017 – $2,405
  • August 31, 2017 – $4,714

By comparison, the price increase between the winter months of Feb. 10 and May 10 was ‘only’ 79 percent:

  • February 10 – $978
  • April 21 – $1,759

Put simply, BTC’s price grew faster over these three summer months of 2017, yet its energy cost grew more slowly.

Why? And what about the summer of 2018?

Well, in the three months between June 1 and Aug. 31, BTC energy consumption increased by only 5 percent:

  • June 1 – 69.6TW/h
  • August 31 – 73.1TW/h

Over the same period, BTC’s value sank by 6.3 percent. The thing is, its value dropped by a hefty 27 percent between March and May, during which time energy consumption actually increased by 31.6 percent. And between Dec. 1 and February 28, consumption increased by an impressive 69 percent, while the overall BTC value grew by only 7.8% between these three months (although they were big spikes over smaller time frames within this quarter).

BTC Energy Consumption VS BTC Price 2018

As with the year before, 2018’s movements underline two things: a) that the growth in energy consumption slows down to an appreciable degree in the summer months, and that b) this slowdown can’t be correlated with price movements, particularly with regard to 2017’s figures. In 2017, energy consumption slowed down while price rises accelerated; in 2018, even though the price had sunk on Aug. 31 relative to its position on June 1, it was still 49 percent higher than it had been on Aug. 31, 2017. Such an annual difference should, in theory, provide a greater incentive for miners to mine Bitcoin and to increase their mining capacities, yet we nonetheless see that they eased up on their growth during the summer months.

Summer = higher electricity prices

The fact that BTC’s price doesn’t fully account for its energy consumption raises a conundrum. However, it’s one that’s solved via reference to the other biggest factor in Bitcoin’s use of electricity, which is the price of electricity itself. On the global level, electricity is generally more expensive in the summer, when there is greater demand for it, both from people turning on their air conditioners and from businesses — including mining farms — needing more energy for cooling.

For example, the United States Energy Information Administration — a branch of the U.S. Department of Energy — found in a 2013 review that energy consumption in the U.S. peaks in the summer for residential, commercial and industrial customers, with the variation ranging from 18 billion KW/h to 67 billion KW/h (compared to non-peak times). Similarly, in France and Germany, demand for energy during hot weather in June 2017 caused consumption to rise by 2GW and 4GW respectively. Meanwhile, China — home to some of the largest mining facilities in the world — has been facing the possibility of power shortages this summer, “as the nation’s distribution networks struggle to cope with soaring temperatures and the fastest power consumption growth in seven years.”

RMIT University’s Centre for Urban Research explained in a 2017 report on electricity pricing in Australia:

“During hot weather, the electricity sector aims to reduce peak electricity demand via ‘price signals’ — higher prices for electricity used at times when many households use air conditioning to cool their homes.”

As a single example, the U.S. Energy Information Administration notes in a January bulletin that wholesale electricity prices peaked at $55/MWh in California during August 2017, when they had been only $36/MWh in January of that year — amounting to a 52.7 percent increase.

It’s therefore clear that electricity demand and pricing tends to increase in summer, particularly on a global level — and particularly in China, where mining is most prevalent. By extension, this would explain why the increase in Bitcoin’s energy consumption also tends to level off slightly during the summer, since miners are reacting to increasing costs — and decreasing profitability — by temporarily reducing their capacity, at least in areas affected by hot summers.

This finding is backed up by the select few individuals who actually devote themselves to tracking Bitcoin’s energy consumption. Speaking to Cointelegraph, Ian Wright, the founder of Power Compare, confirmed that there isn’t really any significant or pronounced seasonality in Bitcoin’s energy consumption. However, what little seasonality exists is driven by the cost of electricity.

“If there is a seasonality effect, it would come down to electricity prices. So, for example, prices may come down in some areas with a lot of installed solar capacity when the sun is shining. Or it may go up in other areas that are hot, as more people turn on AC and increase demand.”

Marc Bevand, who doesn’t really see any significant variations in energy consumption, nonetheless also acknowledges that consumption levels are affected by profits.

“The energy consumption is driven mostly by increases of the price of Bitcoin. If miners make more profits, they will invest more capital in mining farms.”

While he doesn’t explicitly mention electricity here, this assessment is still consistent with the idea that seasonal electricity prices can affect consumption levels, since these prices will inevitably have an impact on profits.

This idea is also backed up by a May paper authored by CoinShares Research, in which Christopher Bendiksen and Samuel Gibbons investigated trends in the cost of mining Bitcoin. In particular, their research confirmed that mining companies are significantly influenced by seasonality:

“We also note that miner migration and/or price hikes occur during the dry season in China.”

Even though this paper didn’t describe any mining network reducing capacity, the fact that networks have a tendency to migrate whenever they can would suggest that, when they can’t migrate to an area with cheaper electricity, they may simply scale back. As the authors conclude:

“Some miners may have felt the squeeze during the market bottom, particularly if they were latecomers in terms of the modernity of their mining gear and/or operate in areas with comparatively higher electricity costs.”

Renewables

While what is above demonstrates that BTC energy consumption is lightly seasonal — in that the increase in capacity slips a little during the summer — there are two caveats worth addressing. The first, which is the less serious, is that the figures produced by Alex de Vries aren’t unanimously accepted by all those who track Bitcoin’s energy consumption. For instance, entrepreneur Marc Bevand constructed his own model for calculating BTC’s energy cost, finding that it was anything between 2.85TWh and 6.78TWh per year. This is considerably lower than de Vries’ first estimation of 9.6TW/h (for February 2017), which then grew to 32TWh for December, and then to 73TW/h for this August. It’s also lower than the estimation put forward by SetOcean co-founder Oscar LaFarga, who put the annual consumption at around 18.25TW/h.

Other commentators have put their estimations even higher than de Vries. However, even with this variation, de Vries recently noted that he used the BECI’s methodology to write a peer-reviewed paper — although it produced a lower estimate than that of BECI for overall production. He also notes that a Morgan Stanley report criticized Bevan’s approach, which allegedly underestimates the cost of mining networks for cooling, which alone can consume up to 30 percent or 40 percent of a network’s revenue. As such, this analysis has stuck with de Vries’ figures. What’s more, even if they are well into the upper range of possibility, the consistency of the methodology used for the BECI means that this would have little impact on the attempt to specifically follow increases and decreases in BTC’s energy consumption over time.

The second caveat, which is more significant, is that BTC’s modest seasonality may be weakened even further as the industry matures. Ian Wright says:

“[…] the price of Bitcoin relative to electricity prices is increasingly the main driver of consumption and is also driving a shift away from high-cost areas to places with lower prices.”

Marc Bevan describes a similar process:

“Miners also design their mining farms to run 24/7/365, so seasonal weather patterns don’t interrupt their mining operations.”

Here, Wright and Bevan are referring in part to the establishment of new mining centers in cooler nations such as Iceland, where Bitcoin mining is on course this year to burn more energy than all of the nation’s homes combined. Big mining companies, such as Bitmain, are increasingly flocking to areas with cheaper renewable energy and colder climates, such as Canada.

In the process, they’ll dilute the vague seasonality currently visible in energy consumption charts, enabling consumption to rise consistently for as long as Bitcoin’s price remains high and it retains its onerous proof-of-work (PoW) algorithm. And by doing this, mining firms will also help to reduce the impact Bitcoin is having on the environment. That said, an energy expert at the University of Pittsburgh recently observed that such firms are already making significant use of green energy sources, and that Bitcoin’s overall consumption is still negligible compared to that of the banking industry.

But until Bitcoin moves almost completely to renewables, its energy consumption will continue to exhibit some slight seasonality, easing its foot off the gas during the summer months just as the rest of world is doing the opposite. While this subtle decline might seem like a bad thing from the Bitcoin community’s perspective, it doesn’t appear to have any negative consequences in practice — except for maybe an increase in average confirmation time for transactions in the summer of 2017, something which hasn’t been a problem in 2018 due to the rolling out of the SegWit upgrade. In other words, Bitcoin’s capacity is growing very steadily, making it easier than ever before to send a transaction to its network and have it accepted.

Continue Reading

China: WeChat Blocks Bitmain Sales Account as Well as Further Crypto ‘Hype News’ Channels

China’s social media giant WeChat has blocked the official sales channel of Bitcoin mining giant Bitmain, as well as a host of further crypto-related “hype news” accounts.

WeChat, the 1 billion-user Chinese social media platform developed by Tencent, has blocked the official sales channel of Bitcoin (BTC) mining giant Bitmain, according to an announcement posted to its channel yesterday, September 10. As of press time, Bitmain’s other Wechat accounts, including after-sales services and its official account, remain active.

The official sales channel, which operates under the WeChat ID “antminersale,” no longer shows any content but instead displays a rules violation notice, stating:

“Following users’ complaints, [WeChat] has reviewed and discovered that this account — without having acquired authorized credentials or licenses — has been publishing and distributing information of relevant businesses it is involved in.”


 

Bitmain’s official WeChat sales channel, ‘antminer.’ Accessed: September 11 [time.]

Cointelegraph’s sources in China reached out to a Bitmain customer service representative, who did not deny the sales channel ban but emphasized that Bitmain’s official WeChat account — together with its after-sales account — have not been blocked and remain accessible.

In what appears to be an aftershock of WeChat’s earlier sweep of crypto and blockchain related accounts August 22, WeChat has this week apparently targeted a host of further crypto accounts, which all display the same rules violation notice.

Cointelegraph’s sources in China have clarified that further accounts accused of promoting “hype news” — or what is considered to be fraudulent information surrounding Initial Coin Offerings (ICO) — have been banned, including accounts Kuangresearch, Dianbichengjin, Fcoin Community, and Delphy.

Company-run accounts have seemingly been more stringently targeted than those run by individuals, as suggested by the platform’s handling of the account “Crypto Mad Man,” who operates under the WeChat ID “shuzihuobiqushikuangren.” The channel’s official account — a crypto price prediction channel which is run by an individual — is still live, whereas its sub-account — run by company, with occasional promotion of new altcoins — has been banned, Cointelegraph’s sources in China report.

As reported August 21, WeChat had already permanently blocked a number of high-profile crypto and blockchain related accounts — including CoinDaily, Deepchain, and Huobi News — that were all accused of publishing crypto “hype” in violation of regulations introduced earlier this month.

Since then, as part of a country-wide clampdown on crypto both on- and offline, China’s tech giants Baidu and Alibaba have both joined Tencent in imposing new anti-crypto measures in line with Beijing’s toughened stance.

Continue Reading

Chinese ASIC Manufacturer To Turn To AI In Case Of Stricter Gov’t Regulation

Bitmain is looking to artificial intelligence as the natural option to turn to in case of an increase in China’s already stringent crypto regulations.

Due to the recent crypto crackdown in China, Chinese ASIC chip manufacturer Bitmain is turning to artificial intelligence (AI) as an alternate revenue source, Bloomberg reports today, May 17.

China’s crypto regulations have included an initial coin offering (ICO) ban in the fall of last year, this January’s ban on “exchange-like services,” and the February ban on foreign crypto exchanges.

Bitmain manufactures the processing chips and miners that mine for a variety of cryptocurrencies, including Bitcoin (BTC), Ethereum (ETH), and altcoin Monero; although the release of the Monero-mining Antminer at the end of March led Monero to upgrade in order to preserve its ASIC-resistant nature.

Jihan Wu, Bitmain’s co-chief executive, told Bloomberg in one of his infrequent interviews that because “artificial intelligence requires lots of computations,” it is the natural alternative option for the ASIC manufacturer:

“As a China company, we have to be prepared.”

Bitmain’s Sophon BM1680 chip, which they began selling in October, can more cheaply speed up machine learning as compared to those made by Nvidia and Advanced Micro Devices Inc, although it is not as powerful.

Wu — who predicts that AI chips could account for up to 40 percent of Bitmain’s revenue in five years — told Bloomberg that Bitmain is “just trying to do something that they cannot take care of well enough.”

At the end of February this year, a report showed that Bitmain, a four-year-old company, made between $3 and $4 bln in operating profits in 2017, as compared to twenty-seven-year-old competitor Nvidia, who made about $3 bln during the same period.

Continue Reading

Circle Raises $110 Mln In Investment Round, Plans To Release Fiat-Based Stable Coin

Circle and Bitmain’s cooperation has resulted in a $110 mln investment round and the planned development of a fiat-based stable coin, which will reportedly be released this summer

Boston-based Circle Internet Financial Ltd., a digital currency products developer, has closed a $110 mln fundraising round led by mining hardware manufacturer Bitmain, Bloomberg reports May 15. The two companies are now partners in a project to create a token which is backed by US dollars.

The investment lifts Circle’s valuation to nearly $3 bln, which is more than six times what it was in 2016. The partnership between Bitmain and Circle has also resulted in plans to develop a fiat-backed token or “stable coin”, which aims to address the unstable nature of some cryptocurrencies. The project is called Circle USD Coin, or USDC, and will reportedly be released by Circle in the summer.

USDC will be an ERC-20 token based on the Ethereum network. It will be backed one-to-one with the dollar and is lauded by supporters to carry many of the benefits of cryptocurrencies, without the risk of volatility. Circle CEO Jeremy Allaire said in an interview at an industry conference Monday, that the token will also provide greater transparency. He added:

“It’s a version of fiat that can move at the speed of the Internet with global reach, with much less cost, with high levels of security. It’s a huge improvement for how fiat money transmission can work around the world for consumers and for businesses who might want to collect digital payment with tokens.”

Circle, which has 7 mln users, is looking to integrate USDC in its Circle Pay payment app and in Circle Trade, a crypto OTC desk and liquidity provider. The company also plans to offer USDC on its cryptocurrency exchange Poloniex. Co-founder Sean Neville said that Circle hasn’t yet decided whether it will charge fees for traders using USDC, as the objective is to increase its circulation.

Fiat collateralized stable coins like USDC are the easiest type of stable coin to implement, as they function much like an IOU. Every token is paired with an equal amount of fiat currency, which is held by a central custodian. Holders are then able to redeem their coins for the stable value denominated in fiat.

In general, stable coins aim to carry both the relative price stability of fiat currencies, and keep the core values of cryptocurrencies such as decentralization and security. For truly decentralized stable coins to work, there must also be a system in place that can reliably obtain the exchange rate between the stable coin and the pegged asset, without leaning on third-party institutions that can be manipulated.

Continue Reading