FOUNDER: Jihan Wu
WHAT THEY DO: Bitmain Technologies (Bitmain) produces high quality and efficient computing chips, high density server equipment, and large scale parallel computing software. Their product line includes Bitcoin and Litecoin miners (machines) that include their own ASIC chip technology.
WHY IT MATTERS: Bitmain is a company that exists because of blockchain technology. Its sole purpose is to design and sell high-powered equipment and software that mine for Bitcoin and Litecoin. Thus, they are an important player in the blockchain ecosystem. The process of Bitcoin mining has become more difficult (by design) over time; however, Bitmain has adapted its service line and successfully responded to the anticipated complexities.
Bitmain supports increasing the Bitcoin block size, which is a solution to help solve Bitcoin’s scalability problems. Wu has been urging the adoption of Bitcoin Unlimited into the core Bitcoin protocol, which advocates increasing the size of Bitcoin blocks. Core Bitcoin developers have been resistant to this scaling solution. The possible result, which may occur as early next week, could be that the Bitcoin blockchain will be “forked” into several currencies if the Bitcoin community cannot address the above-mentioned issues as a united front. This crisis led directly to the recent drop in Bitcoin’s value over the past month.
Over the past week, an initial solution to the scaling debate has been committed to by users and miners alike, known as Segregated Witness, or SegWit. The technology allows for portions of each transaction to be separated from the transaction itself in order to make transactions smaller, quicker, and cheaper. This path is supported by the core Bitcoin development team and is designed to ensure Bitcoin continues as a store of value akin to gold. However, many believe SegWit technology does not go far enough to address the scalability issue.
Bitmain may opt to formally support an alternative solution to this debate. Over the past couple of days, advocates of a hard fork solution have gone public with plans for a new cryptocurrency called Bitcoin Cash (BCC) as soon as August 1, 2017, a separate fork of the Bitcoin protocol focused on developing a faster, more performant cash-like system. As of this writing, Bitmain has not yet committed to supporting BCC.
Bitmain’s decision on whether or not to pursue BCC and/or remain with the core Bitcoin protocol matters because Bitmain is roughly 20 percent more efficient than other similar companies when it comes to mining Bitcoin. Many believe SegWit technology lessens Bitmain’s competitive advantage, diminishing their incentive to remain supportive of the core Bitcoin protocol.
HOW IT IS USED: Bitmain sells the following products:
- Antminer S9
- Antminer T9
- Antminer R4
- Antminer L3+
The computer interface has been designed to be simple to use, requiring only a virtual wallet address and mining pool settings to start mining. New firmware releases from Bitmain can also be downloaded after purchase. Bitmain’s miners (hardware) range from several hundred to several thousands of U.S. dollars and can be purchased directly from Bitmain or via online marketplaces like Amazon.
WHO USES IT: It’s been estimated that over 70% of mining pools use Bitmain technology. Bitmain has been described as the world’s most valuable Bitcoin company and the world’s most power-efficient Bitcoin miner with the best ROI for any Bitcoin miner operation. Each system employs multiple chips to deliver more hashrate and efficiency than any other similar product commercially available. Thus, anyone interested in mining Bitcoin uses it or knows about it.
NO. OF TWITTER FOLLOWERS: @JihanWu: 12,000+; @BITMAINtech: 15,000+
CURRENCY OF CHOICE: Bitcoin, though they are threatening to take the lead on a new version of Bitcoin some are nicknaming “chinacoin”.
BACKSTORY: Bitmain was established to develop and sell the world’s leading Bitcoin miners using their ASIC chip technology. They followed Moore’s Law in this emerging field of ASIC chip design, remaining at the forefront time and again. In May of 2016, they released the Antminer S9, the world’s first consumer-grade Bitcoin miner based on a 16nm process ASIC chip. In addition to Bitcoin, their products also mine Litecoin. They also run their own Bitcoin mining pool, known as Antpool.
In May 2017, approximately 80% of the entire hashing power and transactions’ source software or services within the Bitcoin industry announced the New York Agreement which detailed concrete steps to scale Bitcoin in the near future. Bitmain has been supportive of the New York Agreement due to “the hard work of those who sincerely believe in Bitcoin and those entrepreneurs or investors who have strong financial interest in scaling Bitcoin quickly and unitedly.”
THE NUMBERS: Bitman technologies currently has 50+ employees. They are headquartered in Beijing, with offices in Amsterdam, Hong Kong, Tel Aviv, Qingdao, Chengdu and Shenzhen.
SWOONWORTHY: Bitmain is now among the most recognizable companies in the cryptocurrency space and the proud parent of several brands, among them Antminer, Antpool, and Hashnest, all of which are ranked number one in their respective fields. Their machines (and customers) are located throughout the world, giving credence to the notion that blockchain is a global phenomenon.
QUOTEWORTHY: “UASF (User Activated Soft Fork) will split the blockchain and create 2 or 3 kinds of Bitcoin if majority miners vote ‘no’. Exchanges should be careful.” – Jihan Wu, 3 March 2017 via Twitter.
BLOCKINTEL’S TAKE: Without doubt, Bitmain is a major player in the blockchain and Bitcoin ecosystems. If you are a Bitcoin miner, there is some debate as to whether or not Bitmain products are worth the price, as they can exceed several thousand U.S. dollars for the hobbyist miner who, according to some and at the present rate, must mine for up to a year just to pay for the device.
The more important story will be what Bitmain decides to do in the debate between Bitcoin Cash and the core Bitcoin protocol as BCC goes into production on August 1, 2017. They are just one of many players within the broader community, but their efficiency advantage relative to the rest of the community ensures their decisions as BCC develops will have an outsized impact on the value of both BCC and the core Bitcoin protocol.
For more on the BCC / core Bitcoin debate, see today’s story in The New York Times.