Bitmain: The world's leading manufacturer of crypto mining hardware
How Bitmain became one of the most important players in the cryptocurrency industry
What kind of company is Bitmain?
Bitmain is a Chinese company that specializes in manufacturing crypto mining hardware and software and is the world's leading provider there. Bitmain produces ASIC miners that are specifically designed to mine Bitcoin and other cryptocurrencies and also offers mining software. The company is also active in other areas of the cryptocurrency industry, including operating mining pools and investing in cryptocurrency companies.
The story of Bitmain
Bitmain is a technology company that has been mining hardware for almost a decade (2013) offers to mine cryptocurrencies. The appropriate equipment for crypto mining is not only sold by Bitmain, but also manufactured. The company is now active worldwide with branches in the USA, Singapore, Israel, the Netherlands and Switzerland and is the largest player in the mining segment.
The founders of Bitmain: Micree Zhan and Jihan Wu
Bitmain co-founder Micree Zhan was part of the crypto community early on, worked on TV-to-PC streaming hardware and developed microchips in the past. Co-Founder Jihan Wu studied economics and psychology. The pooling of their skills was important for the subsequent founding of Bitmain. In 2010, Micree Zhan and Jihan Wu met by chance on the streets of Beijing. Zhan asked Wu for tips on how to generate more funding for his projects. However, the initial partnership between the two Bitmain founders ended again after just a few weeks. Cryptocurrencies were not very well regarded or attractive at the time and the number of Bitcoin followers was still low. However, business economist Jihan Wu became aware of Bitcoin a little later and quickly began buying bitcoins in larger quantities as he was fascinated by the possibilities of the associated blockchain technology.
Development of the first ASIC miner
In 2013, the value of Bitcoin skyrocketed. Instead of $20, a Bitcoin was now worth 900 dollars. Wu realized that it would be more efficient and profitable to create bitcoins rather than buy them. That's how he started investing in mining. But the first mining rigs did not bring him high returns. In his disillusionment, he decided that there must be a more efficient way to mine bitcoins. He contacted tech-savvy Zhan and gave him the task of building an ASIC. This ASIC miner should be able to execute SHA 256 equations to generate bitcoins. The partnership between the two began anew, with the knowledge that they could have a huge advantage in the market with ASIC miners.
Bitmain's first ASIC miner was launched in November 2013. It was the Antminer S1, a Bitcoin miner, with a hash rate of 180 GH/s. Bitmain's growth was gigantic in the early days. The market for crypto mining hardware was still quite young at that time. But Bitmain already had serious competition. The companies ASICMiner and Butterfly Labs had ahead of Bitmain as they had been manufacturing ASIC chips since 2012.
The Mt. Gox scandal - Bitmain's big opportunity
The company Mt. Gox, founded in Japan, was the world's largest trading center when it came to Bitcoin transactions back then. At their peak in 2013, they processed 70 percent of all Bitcoin transactions. However, the Bitcoin exchange was affected by security issues. A security flaw arose in 2011 when a hacker used the login details of an Mt.Gox employee to transfer bitcoins to himself. There was also a massive collapse in the price of Bitcoin on the platform. For a short time, a Bitcoin was only worth one US cent. In February 2014, there was a major hack that resulted in the theft of 850,000 bitcoins. Mt.Gox later filed for bankruptcy. This event destroyed trust and interest in the cryptocurrency and mining sector. As a result, Bitmain's former competitors focused on new business areas.
Perhaps the hack of the platform was Mt. Gox, combined with its consequences for Bitmain, is an important factor in being able to gain a larger market share later on.
ASIC mining is becoming popular
The release of the Antminer S5 in 2015 paid off for Bitmain. The popularity of the new Antminer gave Bitmain 50 percent of its profit back then, as well as control over 70 percent of the entire network hash power. This development allowed the company to significantly advance its product developments.
Zhan and Wu have established themselves as leaders in the cryptocurrency industry over the years and have contributed significantly to Bitmain's rise. However, there have been reports in recent years that there have been tensions and differences between the two founders. In October 2019, for example, there were reports that Wu had left the company and Zhan had taken over the reins.
The most popular Bitcoin miners: What are Antminers?
In 2009, the only thing you needed for Bitcoin mining was a simple computer. Nowadays, normal computers can no longer be used for such calculations. Over the last few years, the devices used to secure the Bitcoin network have undergone significant technical progress.
Bitmain's main product is Antminers. Antminers are ASIC miners, so-called stand alone miners. Antminer and its included ASIC technology are made specifically for Bitcoin mining and other cryptocurrencies. The power of these data processing systems to solve complex equations is required to ensure the validation of Bitcoin transactions and their inclusion in the blockchain. ASIC miners can do that faster than any other computer. They have specialized circuits that produce a lot of computing power. With a LAN cable, they can simply be connected to a router and configured via a web browser.
Bitmain has released a number of different models of antminers over the years, with each new generation offering improved performance and efficiency.
Bitmain's best and most successful ASIC miners are the following models:
- Bitmain Antminer S19 Pro (110 TH/s Bitcoin Miner)
- Bitmain Antminer S19 J Pro (100 TH/s Bitcoin Miner)
- Bitmain Antminer S19 (95 TH/s Bitcoin Miner)
- Bitmain Antminer S17+ (73 TH/s Bitcoin Miner)
- Bitmain Antminer KA3 (166 TH/s Cadena Miner)
- Bitmain Antminer K7 (63.5 TH/s Nervos Miner)
- Bitmain Antminer L7 (9.05/9.3/9.5 GH/s Litecoin/Dogecoin Miner)
- Bitmain Antminer E9 (2.4GH/s Ethereum Classic Miner)
Bitcoin mining should be more energy efficient
Nowadays, the Bitcoin network consumes a lot of electricity. Probably twice as many as Switzerland per year. The share of mining equipment on the Bitmain market alone is estimated at around 60%-70%. With an awareness of climate protection and energy efficiency, Bitmain, as a manufacturer, is also focusing on improved efficiency. Mining farms are increasingly trying to rely on energy from renewable forms. A mining farm near Washington, which was also opened by Bitmain, uses 24MW of energy from hydroelectric power. And the energy consumption of Bitcoin mining technology is also to be further reduced.
New Antminer S19 XP — 140 TH/s Bitcoin Miner
Bitmain presented its new Hydro Cooling Rigs (S19 XP), which will be available in 2023 for around 20,000 dollars. The new Hydro Cooling Rigs include more powerful technology and a liquid cooling system, which allows coolant to flow through the system via pipes during operation. The new model combines better performance with a reduction in energy consumption and a reduction in wear caused by the otherwise heavily heated miner components. This is probably an advantage for a longer lifetime of the devices. In addition to the new cooling rigs, another system is also coming onto the market. Bitmain is releasing the ANTSPACE HK3 mining container, which should have space for up to 210 mining systems.
Bitcoin mining pools and Bitcoin mining farms
In addition to its mining hardware business, Bitmain has also invested in other areas of the cryptocurrency industry. The company operates the Antpool Bitcoin mining pool, which allows miners to pool their computing power and increase the chances of finding a block. This helps to reduce fluctuations in rewards and enables small miners to compete with larger operations. Bitmain has also invested in Bitcoin mining farms and data centers around the world and recently ventured into the field of artificial intelligence.
Bitmain's future prospects
Despite its success, Bitmain has faced a number of challenges in the past. Increasing competition from other mining hardware manufacturers makes the company fight for market share. In addition, falling profits and increased criticism of business practices and Bitmain's role in centralizing Bitcoin mining caused difficulties for the company. Despite these challenges, Bitmain remains a major player in the cryptocurrency industry and its mining hardware remains very popular with miners due to its reliable and efficient features. Bitmain's announced plans are to expand into new areas such as renewable energy and cloud computing and to bring Antminer to market, which should be more energy efficient and environmentally friendly. As the manufacturer of Antminers, Bitmain is convinced that cryptocurrencies will play a major role in the financial system and that ASIC miners will continue to be an important part of securing cryptocurrencies.
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