Bitmain

Last updated

Bitmain Technologies Ltd.
Company type Private
Industry Cryptocurrency
Founded2013
Founder Micree Zhan, Jihan Wu
Headquarters
Beijing, China
Area served
Worldwide
BrandsAntMiner, AntPool, Hashnest
Website www.bitmain.com

Bitmain Technologies Ltd., is a privately owned company headquartered in Beijing, China, that designs application-specific integrated circuit (ASIC) chips for bitcoin mining.

Contents

History

It was founded by Micree Zhan and Jihan Wu in 2013. Prior to founding Bitmain, Zhan was running DivaIP, a startup that allowed users to stream television to a computer screen via a set-top box, and Wu was a financial analyst and private equity fund manager. [1]

By 2018 it had become the world's largest designer of application-specific integrated circuit (ASIC) chips for bitcoin mining. [2] The company also operates BTC.com and Antpool, historically two of the largest mining pools for bitcoin. [3] In an effort to boost Bitcoin Cash (BCH) prices, Antpool "burned" 12% of the BCH they mined by sending them to irrecoverable addresses. [4] Bitmain was reportedly profitable in early 2018, [5] with a net profit of $742.7 million in the first half of 2018, [6] and negative operating cash flow. [2] TechCrunch reported that unsold inventory ballooned to one billion dollars in the second quarter of 2018. [7] Bitmain's first product was the Antminer S1 which is an ASIC bitcoin miner making 180 gigahashes per second (GH/s) while using 80–200 watts of power. [8] Bitmain as of 2018 had 11 mining farms operating in China. [7] Bitmain was involved in the 2018 Bitcoin Cash split, siding with Bitcoin Cash ABC alongside Roger Ver. [9] In December 2018 the company laid off about half of its 3000 staff. [10] The company has since closed its offices in Israel and the Netherlands, while significantly downsizing its Texas mining operation. [10] In February 2019, Bitmain had lost "about $500 million" in the third quarter of 2018. [11] Bitmain issued a statement saying "the rumors are not true and we will make announcements in due course." [12]

In June 2021, suspended spot delivery of sales of machines globally aiming to support local prices following Beijing's crackdown. [13]

Bitmain's attempts at initial public offering

In June 2018, Wu told Bloomberg that Bitmain was considering an IPO, to give early investors a chance to cash out. [14] The company completed its $1 billion pre-IPO registration with the Hong Kong Stock Exchange in August, [15] [16] and filed for IPO in September. [6] [2]

Bitmain Technologies filed for IPO on 26 September 2018 with the Hong Kong regulatory agency and released their first public financial statement at a time where bitcoin prices had dropped 65% from December 2017. The price drop had hurt mining hardware sales that accounted for 96% of the company's revenue. [17] [18] Bitmain will use a dual class share structure. In Bitmain's case, this means the share held by company's founders would count as 10 votes. [18]

On 26 March 2019, Bitmain's application for a Hong Kong initial public offering lapsed, six months after it was filed, as investors were reportedly concerned about the fall in bitcoin's value. [19] The company issued a statement saying it would "restart the listing application work at an appropriate time in the future." Bitmain also announced that Haichao Wang would serve as its new CEO, while co-founders Micree Zhan and Jihan Wu will continue as directors. [20]

According to a Tencent News Report, after Bitmain's failed IPO attempt in Hong Kong, Bitmain filed an application in the United States seeking to go public again. [21]

Controversies

In 2015, Bitmain was involved in Hong Kong's first cryptocurrency-related litigation in the High Court (High Court Action No. HCA 1980 of 2015) when Bitmain sued one of the world's leading bitcoin trading platforms at the time. Bitmain accused the trading platform of "negligence and/or security issues". [22] At the commencement of proceedings, Bitmain's claim amount was around RMB 700,000. Bitmain's claim was later contested after it was revealed during the course of the litigation that serious issues of cyber-security neglect may have occurred on Bitmain's side when the transaction had been undertaken by Bitmain's staff (e.g. leaving on the auto-fill function while inputting wallet addresses, use of unsecured private networks, use of PRC banned software while conducting the transaction in PRC). The mining giant's claim ultimately failed and was discontinued after Bitmain suffered a series of interlocutory defeats (where its earlier default judgment was overturned and was even ordered to pay security for costs). As part of the terms of discontinuance, Bitmain was ordered to pay the trading platform's legal fees. The total legal fees that Bitmain had to pay the trading platform totaled over HK$1.3 Million, nearly double that of the initial claim amount.[ citation needed ]

In 2017, Bitmain sued Zuoxing Yang, a former Bitmain chip design director who left Bitmain to launch Bitewei over patent rights infringements. In 2018, Yang's legal team successfully appealed to a court in China to have the patent revoked, after which Bitmain's case was dismissed.[ citation needed ]

In 2018, a class action lawsuit of US$5 million was commenced by Los Angeles County resident Gor Gevorkyan against Bitmain where it was alleged that Bitmain mined cryptocurrency for its own benefit on its customers’ devices. [23] It was alleged by the Plaintiffs in this case that Bitmain is benefiting—without authorization—from the lengthy "initialization" period that its ASIC [Application-Specific Integrated Circuit] devices need for set up: "Until the complicated and time-consuming initialization procedures are completed, Bitmain's ASIC [Application-Specific Integrated Circuit] devices are preconfigured to use its customers’ electricity to generate cryptocurrency for the benefit of Bitmain rather than its customers."[ citation needed ]

In 2018, Bitmain was involved in another legal dispute against a Labrador mining farm. [24] Bitmain Technologies sued Great North Data alleging problems from the start of the agreement between the two companies. Bitmain develops and produces miners where it operates some of its hardware out of third-party "mining farms". Great North Data provides space to companies like Bitmain to install and run their bitcoin mining equipment. [25]

In or about November 2019, the ousted co-founder of Bitmain, Micree Zhan, filed multiple lawsuits in the Cayman Islands and China against various entities of Bitmain in a bid to regain control of Bitmain. The lawsuit in China was accompanied by an asset-protection petition during which the PRC Court sided with Zhan to freeze 36 percent of Fujian Zhanhua's 10 million yuan incorporated shares owned by Bitmain, worth 3.6 million yuan, or $500,000. [26] This case highlighted what appears to be an ongoing power struggle between the two founders for control of Bitmain. [27]

Related Research Articles

Proof of work (PoW) is a form of cryptographic proof in which one party proves to others that a certain amount of a specific computational effort has been expended. Verifiers can subsequently confirm this expenditure with minimal effort on their part. The concept was first implemented in Hashcash by Moni Naor and Cynthia Dwork in 1993 as a way to deter denial-of-service attacks and other service abuses such as spam on a network by requiring some work from a service requester, usually meaning processing time by a computer. The term "proof of work" was first coined and formalized in a 1999 paper by Markus Jakobsson and Ari Juels. The concept was adapted to digital tokens by Hal Finney in 2004 through the idea of "reusable proof of work" using the 160-bit secure hash algorithm 1 (SHA-1).

<span class="mw-page-title-main">Bitcoin</span> Decentralized digital currency

Bitcoin is the first decentralized cryptocurrency. Nodes in the peer-to-peer bitcoin network verify transactions through cryptography and record them in a public distributed ledger, called a blockchain, without central oversight. Consensus between nodes is achieved using a computationally intensive process based on proof of work, called mining, that secures the bitcoin blockchain. Mining consumes large quantities of electricity and has been criticized for its environmental impact.

<span class="mw-page-title-main">Cryptocurrency</span> Digital currency not reliant on a central authority

A cryptocurrency, crypto-currency, or crypto is a digital currency designed to work as a medium of exchange through a computer network that is not reliant on any central authority, such as a government or bank, to uphold or maintain it. It has, from a financial point of view, grown to be its own asset class. However, on the contrary to other asset classes like equities or commodities, sectors have not been officially defined as of yet, though abstract versions of them exist.

Litecoin is a decentralized peer-to-peer cryptocurrency and open-source software project released under the MIT/X11 license. Inspired by Bitcoin, Litecoin was among the earliest altcoins, starting in October 2011. In technical details, the Litecoin main chain shares a slightly modified Bitcoin codebase. The practical effects of those codebase differences are lower transaction fees, faster transaction confirmations, and faster mining difficulty retargeting. Due to its underlying similarities to Bitcoin, Litecoin has historically been referred to as the "silver to Bitcoin's gold." In 2022, Litecoin added optional privacy features via soft fork through the MWEB upgrade.

Coinbase Global, Inc., branded Coinbase, is an American publicly traded company that operates a cryptocurrency exchange platform. Coinbase is a distributed company; all employees operate via remote work. It is the largest cryptocurrency exchange in the United States in terms of trading volume. The company was founded in 2012 by Brian Armstrong and Fred Ehrsam. In May 2020, Coinbase announced it would shut its San Francisco, California, headquarters and change operations to remote-first, part of a wave of several major tech companies closing headquarters in San Francisco in the wake of the COVID-19 pandemic.

Canaan Inc., doing business as Canaan Creative and known simply as Canaan, is a China-based computer hardware manufacturer. Established in 2013 by N.G. Zhang, Canaan specializes in Blockchain servers and ASIC microprocessors for use in bitcoin mining.

<span class="mw-page-title-main">Legality of cryptocurrency by country or territory</span>

The legal status of cryptocurrencies varies substantially from one jurisdiction to another, and is still undefined or changing in many of them. Whereas, in the majority of countries the usage of cryptocurrency isn't in itself illegal, its status and usability as a means of payment varies, with differing regulatory implications.

Circle is a peer-to-peer payments technology company that now manages stablecoin USDC, a cryptocurrency the value of which is pegged to the U.S. dollar. It was founded by Jeremy Allaire and Sean Neville in October 2013. Circle is headquartered in Boston, Massachusetts. USDC, the second largest stablecoin worldwide, is designed to hold at or near a stable price of $1. The majority of its stablecoin collateral is held in short-term U.S. government securities.

HTX is a Seychelles-based cryptocurrency exchange. Founded in China as Huobi, the company now has offices in Hong Kong, South Korea, Japan and the United States. In August 2018 it became a publicly listed Hong Kong company.

Monero is a cryptocurrency which uses a blockchain with privacy-enhancing technologies to obfuscate transactions to achieve anonymity and fungibility. Observers cannot decipher addresses trading Monero, transaction amounts, address balances, or transaction histories.

Blockchain Global Limited is a Bitcoin mining and management consulting company. Its headquarter is located at Melbourne, Australia. Founded as Bitcoin Group, after attempting to become the first digital currency company to launch an IPO without 'backdoor listing', the company expanded its focus into consulting and corporate fraud and extortion prevention.

<span class="mw-page-title-main">Digital Currency Group</span> American venture capital company

Digital Currency Group (DCG) is a venture capital company focusing on the digital currency market. It is located in Stamford, Connecticut. The company has the subsidiaries Foundry, Genesis, Grayscale Investments, and Luno. It also formerly owned CoinDesk.

<span class="mw-page-title-main">Bitcoin Cash</span> Cryptocurrency that is a fork of bitcoin

Bitcoin Cash is a cryptocurrency that is a fork of bitcoin. Launched in 2017, Bitcoin Cash is considered an altcoin or spin-off of bitcoin. In November 2018, Bitcoin Cash further split into two separate cryptocurrencies: Bitcoin Cash (BCH) and Bitcoin Satoshi Vision (BSV).

Jihan Wu is a Chinese billionaire cryptocurrency entrepreneur. Together with Micree Zhan, he co-founded Bitmain in 2013, which has become the world's largest computer chip company for bitcoin mining, with US$2.5 billion in revenue in 2017. He is a leading supporter of Bitcoin Cash, a hard fork of bitcoin created in 2017 with increased transaction capacity. He topped Forbes' 2020 World’s Billionaires List as one of the five youngest billionaires in Asia.

Tether is a cryptocurrency stablecoin launched by Tether Limited Inc. in 2014.

OKX is a global cryptocurrency spot and derivatives exchange and the second biggest crypto exchange by trading volume, serving over 50 million people globally. It was founded by Star Xu in 2017, who is also the CEO as of 2023. The President is Hong Fang and the CMO is Haider Rafique. OKX is owned by OK Group, which also owns the crypto exchange Okcoin. As of August 2024, OKX is Top 3 Spot Cryptocurrency exchange in the world according to Coinmarketcap with a Spot Exchange Score of 7.8.

Micree Zhan or Zhan Ketuan is a Chinese electronics engineer and businessman. He is the co-founder and CEO of Bitmain, the world's largest computer chip company for cryptocurrency mining. In 2018, Hurun Report named him the richest cryptocurrency billionaire in the world. In 2019, Bloomberg ranked Zhan as the world's 9th richest self-made billionaire aged 40 or younger, with a net worth of US$5.2 billion.

<span class="mw-page-title-main">Chia (cryptocurrency)</span> Cryptocurrency

Chia is a cryptocurrency where mining is based on the amount of hard disk storage space devoted to it rather than processing power as with proof of work cryptocurrencies such as Bitcoin. The platform was created by a California based company called Chia Network Inc. The Chia Network was founded in 2017 by American computer programmer Bram Cohen, the author of the BitTorrent protocol. In May 2021, Chia Network raised a $61 million investment, valuing the company at about $500 million. The same month, the company announced plans to conduct an IPO before the end of 2021. As of 2023, Chia had filed a draft registration with the Securities and Exchange Commission towards an IPO.

References

  1. ↑ Wong, Joon Ian. "China's Bitmain dominates bitcoin mining. Now it wants to cash in on artificial intelligence". Quartz. Archived from the original on 5 December 2017. Retrieved 4 December 2017.
  2. 1 2 3 Lucas, Louise (27 September 2018). "China's crypto mining rig-maker Bitmain plans Hong Kong listing". Financial Times. Archived from the original on 27 September 2018. Retrieved 27 September 2018.
  3. ↑ "Chinese bitcoin mining giant Bitmain had revenues of $2.8 billion in the first half of the year". Business Insider. Archived from the original on 7 November 2018. Retrieved 7 November 2018.
  4. ↑ "Why a Cryptocurrency Mining Giant Is Burning Money in a 'Black Hole'". Motherboard. 20 April 2018. Archived from the original on 7 November 2018. Retrieved 7 November 2018.
  5. ↑ Cheng, Evelyn (23 February 2018). "Secretive Chinese bitcoin mining company may have made as much money as Nvidia last year". CNBC. Archived from the original on 29 April 2018. Retrieved 30 April 2018.
  6. 1 2 Hu, Bailey (27 September 2018). "Bitmain files for IPO in Hong Kong". TechNode. Archived from the original on 27 September 2018. Retrieved 27 September 2018.
  7. 1 2 Yang, Joyce (October 2018). "Bitmain IPO concerns: the crypto giant recorded a big loss in Q2 2018". Techcrunch. Archived from the original on 8 November 2018. Retrieved 8 November 2018.
  8. ↑ "MANIC MINERS: Ten Bitcoin generating machines". Archived from the original on 14 June 2017. Retrieved 6 November 2018.
  9. ↑ Kharif, Olga (17 November 2018). "Bitcoin Cash Clash Is Costing Billions With No End in Sight". Bloomberg. Archived from the original on 17 November 2018. Retrieved 18 November 2018.
  10. 1 2 Roberts, John Jeff (15 October 2019). "Texas Bitcoin Mining Startup Gets $50 Million From Peter Thiel to Steal China's Crypto Crown". Fortune. Archived from the original on 15 October 2019. Retrieved 16 October 2019.
  11. ↑ "Bitmain E9 - Bitmain Antminer E9". bitmaine9.com. 29 August 2021. Retrieved 2 September 2021.
  12. ↑ Ji, Qian. "比特大陆回应2018年Q3财报亏损约5亿美元:传闻不实_财经网 - CAIJING.COM.CN". m.caijing.com.cn. Archived from the original on 25 February 2019. Retrieved 25 February 2019.
  13. ↑ "World's top Bitcoin mining-rig maker halts sales as clients flee". The Seattle Times. 23 June 2021. Retrieved 2 September 2021.
  14. ↑ Schmidt, Blake (7 June 2018). "Crypto's 32-Year-Old Billionaire Mining King Considers an IPO". Bloomberg. Archived from the original on 28 September 2018. Retrieved 28 September 2018.
  15. ↑ Ambler, Pamela. "All You Need To Know About Crypto Mining Phenom Bitmain". Forbes. Retrieved 2 September 2021.
  16. ↑ Zhao, Runhua (13 August 2018). "World's largest bitcoin mining company Bitmain plans an IPO greater than Facebook's". TechNode. Archived from the original on 13 August 2018. Retrieved 13 August 2018.
  17. ↑ Patterson, Michael (26 September 2018). "The World's Biggest Crypto Company Just Opened the Books for Its IPO". www.bloomberg.com. Archived from the original on 29 October 2018. Retrieved 21 October 2018.
  18. 1 2 John, Alun. "Cryptocurrency giant Bitmain chooses Hong Kong for IPO". U.S. Archived from the original on 21 October 2018. Retrieved 21 October 2018.
  19. ↑ Lucas, Louise (26 March 2019). "Plans for world's largest cryptocurrency IPO shelved". Financial Times. Archived from the original on 27 March 2019. Retrieved 27 March 2019.
  20. ↑ Fioretti, Julia (26 March 2019). "Cryptocurrency miner Bitmain lets Hong Kong IPO application lapse". Reuters. Archived from the original on 27 March 2019. Retrieved 27 March 2019.
  21. ↑ "潜望｜比特大陆"政变"始末：吴忌寒获股东力挺 詹克团已激起民愤_腾讯新闻". new.qq.com. Archived from the original on 18 May 2020. Retrieved 17 March 2020.
  22. ↑ WK To & Co, WK To & Co (16 March 2018). "Matt Tsang - Solicitor - Professional Highlight" (PDF). WK To - Our People. Archived (PDF) from the original on 25 February 2021. Retrieved 16 March 2020.
  23. ↑ "Bitmain Class Action | Bitcoin | Class Action". Scribd. Archived from the original on 11 November 2020. Retrieved 17 March 2020.
  24. ↑ Antle, Rob. "Legal dispute pits Labrador data center against Chinese bitcoin mining equipment supplier". CBC News.
  25. ↑ Antle, Rob (27 April 2017). "Legal dispute pits Labrador data centre against Chinese bitcoin mining equipment supplier". cbc.ca. Retrieved 1 May 2022.
  26. ↑ "Chinese courts freeze Bitmain assets worth over $1 million · TechNode". TechNode. 17 December 2019. Archived from the original on 5 March 2020. Retrieved 18 March 2020.
  27. ↑ Zhao, Wolfie (11 June 2020). "Bitmain's Power Struggle Takes Toll on Customers as Co-Founder Halts Shipments". Nasdaq.com. Retrieved 1 May 2022.
This page is based on this Wikipedia article
Text is available under the CC BY-SA 4.0 license; additional terms may apply.
Images, videos and audio are available under their respective licenses.