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.

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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.

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