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American Tech Giant Intel Files New Patent for Energy-Efficient Bitcoin Mining

Technology company Intel has filed a new patent aimed at reducing energy costs for Bitcoin mining by up to 15 percent.

U.S. technology giant Intel has filed a new patent for “energy-efficient high-performance Bitcoin mining,” according to a U.S. Patent and Trademark Office (USPTO) filing published Nov. 27.

The Intel patent is dedicated to a “hardware accelerator implementing SHA-256 hash using optimized data paths” and aims to reduce energy for Bitcoin (BTC) mining up to 15 percent, according to the publication. The documents states that “clusters of SHA engines may consume a lot of powers (e.g., at a rate of greater than 200 W),” adding:

“Embodiments of the present disclosure include energy-efficient ASIC-based SHA engines that consume less power for Bitcoin mining operations.”

Back this spring, Intel had already filed a patent aiming to reduce the amount of electricity consumed by crypto mining, “minimizing energy consumption per hash and maximizing performance per watt,” as Cointelegraph reported Mar. 30.

Previously this year, Intel partnered with Enigma, a decentralized application (DApp) platform, to launch its blockchain testnet to provide the first environment for scalable end-to-end DApps.

Another partnership with Intel was signed this fall, aiming to address “gaps in the market” for solutions that power enterprise blockchain systems, with software multinational company SAP. Later in October, Intel partnered with hardware startup firm Ledger to provide innovative solutions for digital currency and blockchain applications, Cointelegraph wrote Oct. 27.

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Major Mining Pool F2Pool Publishes List of Minimum Prices for Profitable Crypto Mining

Co-founder of the world’s sixth largest crypto mining pool has published a list of break-even price points for various crypto miner models.

The CEO of China-based crypto mining pool F2Pool posted a company-branded infographic September 6 that indicates at what minimum price points the mining of various cryptocurrencies becomes unprofitable.

Shixing Mao, co-founder and CEO and of the world’s sixth largest mining pool F2Pool, published a list of price levels for major cryptocurrencies, such as Bitcoin (BTC), Ethereum (ETH), Litecoin (LTC), and Zcash (ZEC) below which mining said currency with various different miners allegedly becomes unprofitable.

According to Mao’s graphic, if Bitcoin’s price hits lower than 36,792 yuan (about $5,376) point, this would mean that mining the cryptocurrency on an Antminer T9 would be unprofitable. In the case of using an S7 model miner, the break-even point amounts to a significantly higher 79,258 yuan (about $11,581) Bitcoin price point.

Break-even price points for different cryptocurrencies and miners

Break-even price points for different cryptocurrencies and miners Source: F2Pool’s CEO Weibo

In contrast to S7, mining Bitcoin on Antminer T9 model that was released in January 2017, is still profit-making at Bitcoin’s currently prices, while the newer Innosilicon T2 has the lowest threshold, amounting to 26,636 yuan or about $3,891.

At press time, Bitcoin is trading at $6,452, according to Cointelegraph’s Bitcoin Price Index

In mid-August, U.S. graphics processing unit (GPU) manufacturer Nvidia revealed that crypto mining hardware sales were much lower than expected in Q2 2018, claiming that the company does not expect to make significant blockchain-related sales for the rest of the year.

In July, major Taiwanese microchips producer TSMC once again decreased its annual revenue and capital expenditure estimates, following growth rate reduction in the crypto mining field, among other areas.

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Bitmain Subsidiary BTC.Com To Launch Ethereum (ETH) Mining Pool

While prices may be down in the gutter, the mining industry is still growing at a rapid pace, with firms like Bitmain, Canaan, EBang, and others doing their best to excel in the face of an overall market downtrend.

Bitmain, the world’s most valuable cryptocurrency firm, has forged ahead, recently revealing that its BTC.com subsidiary will open an Ethereum (and Ethereum Classic) mining pool in the coming days.

You may know BTC.com for its relative dominance over the Bitcoin network, hosting a hefty 16% of the hashrate outputted by BTC miners. The Bitmain-backed pool also holds a similar level of dominance over Bitcoin Cash, which the ASIC manufacturer is a proponent of, with a relatively substantial 14%. But now, BTC.com has unexpectedly set its eyes on the Ethereum blockchain, down just one rung from Bitcoin in terms of market capitalization.

As per statements gathered by The Next Web, Zhuang Zhong, the director of BTC.com’s mining pool operations, expects his firm’s operations to “grow to 12 percent of ETH total hashrate in the next 12 months.” Although this goal sounds rather ambitious, some believe that the Bitmain subsidiary can reach and surpass their ambitions, as BTC.com has become an integral part and a trusted name of the crypto ecosystem.

For now, this new pool will support Ethereum and Ethereum Classic, with users being given the opportunity to automatically switch between the two assets to maximize mining profitability. Zhong then elaborated on how exactly the pool is going to work, writing:

Because contracts are charged per line of executed code and miners are rewarded for dedicated hashes using GHOST, Ethereum provides multiple different reward incentives to contribute hash power to the network. We hope to expand Ethereum’s network by relaying those rewards through our FPPS system.

Oddly enough, the BTC.com executive noted that the new pool will likely be able to support Ethereum’s long-awaited Casper protocol integration, which will see the consensus of the Ethereum network switch from solely Proof-of-Work to a Proof-of-Stake (POS) focused model. Zhong added that a pooled POS design “is still possible,” but will likely “increase the complexity to design such a pool since miners need to deposit Ether to the mining pool, but we have a lot of hands-on experience with wallets and Ethereum smart contracts to make a PoS mining pool possible.”

For those who are unaware, Ethereum’s Casper protocol will allow users to ‘stake’ their Ether, with a reported ~500-1000 ETH being a minimum for a solo ‘staker’. So if BTC.com successfully transitions to a PoS model, it is likely that its service will garner lots of support and staked Ether.

Earlier this year, Bitmain, who has plans to go public in the near future, released the first-ever Ethereum ASIC mining machine, which threw many for a loop. The ASIC, named E3, was capable of outhashing a graphics card by many magnitudes, leaving some to believe that Ethereum’s time as a GPU-mineable coin was up.

Following the announcement of even more EthHash ASICs, some claimed that it was time for Ethereum to fork away from ASIC support. But as it stands, no moves towards ASIC resistance have been made as of yet.

Title Image Courtesy of David Mcbee/Pexels
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Ethereum Core Devs Debate Constantinople Hard Fork and “Difficulty Bomb” During Meeting

Ethereum (ETH) core developers have held their regular meeting on YouTube August 24 on the progress of client implementation and tests of the Enterprise Integration Patterns (EIPs) for the upcoming Constantinople hard fork.

The meeting started with a discussion of the latest updates on the processes of no-proof blockchain tests and the progress achieved on major ETH clients, with one of the devs explaining that there is a need to revamp some of the testing to avoid potential consensus issues.

This week saw the release of a number of new features; however, the devs noticed one instability with a “huge” major miner rewrite, which is supposed to be solved by the next update. By Monday, the devs are planning to push out another release “to have the whole thing completed” and finalize the mining release issue.

In terms of the Constantinople hard fork, hardly anything has changed for the last two weeks, according to the meeting. The devs reported on several bug fixes and new tweaks for the testnet, also noting that EIP-1211 will not be included in the upcoming hard fork.

The devs also came to a decision that it is far better for the network to stay on schedule and release new hard forks in time, as opposed to rushing with involving new EIPs or delaying those ready for implementation at the expense of the ones still under development.

Speaking about the possibility to have a second hard fork if it is “really hard to get the changes bundled for all EIPs for Constantinople,” one of the devs said:

“If we delay the time, we would want more features to this particular [Constantinople] hard fork and we should discuss if it’s good to have many changes in one fork, or it’s better to have less changes in many hard forks.”

The devs also decided to release new hard forks every eight months after the Constantinople hard fork. The proposal of a release every six months was rejected as it would create too much pressure for the devs team.

Further discussion was devoted to the issue of adding a “difficulty bomb” and its impact on the reduction and maintenance of block rewards. According to the devs, EIP-858 would reduce block rewards to 1 ETH per block, EIP-1234 would reduce block rewards to 2 ETH, while EIP-1295 would keep rewards to 3 ETH but will affect other factors such as the proof-of-work (PoW) incentive structure.

In order to determine which of the three possible scenarios is preferable, the devs called on the community members. Some of the participants pointed out the environmental impact of ETH mining, while others insisted on decreasing profitability or even excluding ASIC miners from the ETH network. In the end, the participants in the discussion could not reach common ground, so the devs decided to hold another meeting next week on August 31.

As of press time, Ethereum is currently trading at around $281, down almost 10 percent on the week and 41 percent on the month.

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Uber's Largest Shareholder Softbank Denies Deal With Bitmain, Other Investments Uncertain

An official from Softbank has denied their involvement in the investment deal with Bitcoin (BTC) mining behemoth Bitmain that was reported last week by both crypto and mainstream media sources.

As previously reported, Bitmain had allegedly sealed a pre-Initial Public Offering (IPO) financing deal which had brought its valuation to $15 billion. Both Chinese tech conglomerate Tencent and Japan’s SoftBank — another tech giant whose 15 percent stake in Uber makes it the drive-hailing app’s largest shareholder — were purportedly involved.

After receiving an anonymous tip that Tencent and Softbank were not actually involved in any deal with Bitmain, Cointelegraph reached out to SoftBank and Tencent for confirmation.

As a response to Cointelegraph’s request for information, Kenichi Yuasa of the Corporate Communication Office of SoftBank Group Corp. stated:

“Neither the SoftBank Group Corp. nor the SoftBank Vision Fund were in any way involved in the deal.”

Despite numerous requests for clarification, no one at Tencent has denied or confirmed the deal to Cointelegraph.

In response to a media request from Cointelegraph, Bitmain refused to comment on the matter.

The original story on SoftBank and Tencent’s participation in a deal with Bitmain was reported by Chinese publication QQ on August 4. In a Google Translated version of the article, QQ stated:

“The mainland officially completed the Pre-IPO round signing. This round of investors includes Tencent, Softbank [sic], and China Gold. The current round of financing is 1 billion US dollars, and the pre-investment valuation is 14 billion.”

After the story originally broke, there were no official confirmations or denials by either SoftBank or Tencent of their participation in an investment deal with Bitmain.

QQ’s report was picked up by mainstream media sources like Business Insider, which reported on August 14 that Bitmain had closed a “$1 billion funding round led by Chinese tech giant Tencent and Japan’s SoftBank,” linking their source as crypto media site CCN. Yahoo! Finance also reposted the story on Bitmain’s valuation from CCN, also linking to coverage of the matter from crypto news source CoinDesk.

As the media began reporting SoftBank and Tencent allegedly participated in a deal with Bitmain, bringing the company’s reported valuation to $15 billion, Blockstream CSO Samson Mow tweeted August 11 an image — reportedly from the Bitmain pre-IPO investor deck — showing the company allegedly had a large amount of Bitcoin Cash (BCH).

On August 12, Samson Mow also tweeted two images of Bitmain’s Q1 results, one in Chinese and one from Morgan Stanley, commenting:

“Why is Bitmain raising capital so fast & only showing Q1 results to pre-IPO investors? We’re well into Q3 now. The reason is Q2 was a disaster. Bitmain is sitting on a massive $1.24 billion USD in inventory & S9 prices dropped by ~85%! Q2 losses range in the $600-700 millions.”

In response to Mow’s tweets, Crypto Herpes Cat published a follow up on Medium, explaining several theories as to how Bitmain ended up with so much BCH — other than by selling BTC for BCH, as Mow purported — and what they are doing with their ASIC miners in a bear market, writing:

“How do you realize the value of this monolith crypto business and your holdings? You IPO and pass the bag on in one huge lumped stock offering and hope investors don’t realize all of your current assets are very, very illiquid.”

As early as June, Bitmain CEO Jihan Wu had hinted at the firm’s plans to launch its IPO on the Hong Kong Stock Exchange. Chinese publication QQ — the same source that alleged both Tencent and Softbank’s involvement in the recent financing deal — has recently suggested that the firm will be valued at $30 billion.

The seemingly refuted investments come after a year of reports that appeared to indicate Bitmain’s astonishing profitability.

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Rising Hashrates Amidst Shaky Crypto Market — “They’re Happy To Accumulate”

Since the start of 2018, Bitcoin has fallen by over 65%, leading some to guess that mining activity fell in correlation with declining prices. However, it has become apparent that this hasn’t been the case, with hashrates across multiple networks consistently seeing higher lows (and higher highs) amidst an overall market downtrend. Where’s the proof? You may ask.

Well, as seen by the following chart from Blockchain’s information and statistics service, the seven-day hashrate average has nearly quadrupled since the start of the year, even as Bitcoin underwent serious ‘dives’ downwards. This was also seen across other networks, albeit not as bad, with Ethereum seeing a doubling in hashrate, and Litecoin’s hashrate nearly tripling.

Taking hashrate statistics into account, one would assume that mining is still profitable for all parties involved. But according to a recent Bloomberg article, it may not be that simple. Over the past months, the likes of Fundstrat’s Tom Lee and Brian Kelly have claimed that the break-even cost of mining has been well above today’s prices. But hashrates continue to rise, up and up, with miners seemingly giving zero regards to the total fees of mining (electricity, maintenance, hardware etc.) postulated by market analysts.

According to Marco Streng, the CEO of Genesis Mining, larger corporate miners are edging out the in-home, consumer miners, with firms like his still making “major expansions.” He elaborated, stating:

“There are still major expansions happening, especially from more efficient miners. The expansion is so big that it compensated for the drop-out of not-so-efficient miners.”

The previous statement alludes to the fact that operations like his — data centers that span tens of thousands of square feet and consume many megawatts of electricity — have grown so much that they have forced retail users out of the market, while also driving up hashrates near-exponentially.

In theory, as continually noted by Tom Lee, an increasing hashrate (and a subsequent increase in mining cost), should lead to higher cryptocurrency prices, as the break-even level has been seen as an unofficial bottom by some analysts. Therefore, many believe that the opposite is true, but as computational power and operational costs move downwards, it becomes evident that there are other factors behind networks undertaking a growing miner population.

David Sapper, the chief operating officer (COO) at the Blockbid crypto exchange, noted:

“The increased hash rate means people are here for the long-term because they’re happy to just accumulate what they have, potentially even run at a loss. At the same time, At the same time, they do sometimes have to clear house and dump (though).”

This brings up a very interesting point, where miners, who are operating at equilibrium or a slight/medium-loss are only keeping their machines on to accumulate crypto for the long-haul. This move suggests that while some firms may need to sell some crypto to cover costs, that this longer-term ‘HODL’ approach may indicate a sentiment of the success of the market for years to come.

While some data centers may be operating at a loss, as the aforementioned Genesis Mining CEO points out, it varies from firm to firm as specific farms are subject to an array of factors that drive costs up or down. Genesis Mining, while recently making a move to shut down unprofitable mining contracts, has still expanded its centers, buying new hardware that can keep up with the rising hashrates. Additionally, there are firms like Bitmain, which manufacture ASICs and uses these machines to mine itself, making the Chinese firm relatively profitable in the process.

Although ASICs may continue to ramp up in power, power efficiency, and manufacturability, it still remains to be seen whether hashrates will rise exponentially into the future.

Image Courtesy of Marco Verch

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Chipping In: Bitmain’s Journey to a Multi-Billion Dollar Valuation

After the closure of an IPO funding round in August, the Bitcoin mining giant Bitmain is now worth $15 billion. Bitmain’s aim to raise $18 billion at a market capitalization of up to $50 billion could potentially result in one of the largest IPO in history. Founded only five years ago by Jihan Wu and Micree Zhan, Bitmain has presided over the transformation of Bitcoin mining from a quirky hobby into a multi billion-dollar industry. In a cut-throat environment where new technological advances are the lifeline of companies trying to stay ahead of the game, Bitmain has proven itself a fearsome competitor.

From bit parts to Bitmain

In spite of the stability of its position at the top of the industry, Bitmain was born of chance. Jihan Wu — then working in private equity, having graduated with an economics degree from the prestigious Peking University — came across Micree Zhan, an ambitious software developer with big ideas. Zhan tried to get Wu to help him source funding for his 2010 startup, DivaIP, but the project never came to fruition and the two men parted ways after a few months.

The beginning of their fateful partnership began a few years later in 2013, after Wu read a blog post about how Bitcoin had the potential to be “the most dangerous open-source project ever.” Wu had spent his entire life savings on the nascent cryptocurrency. Fortunately, things were beginning to pick up for both Bitcoin and the young investor. The price of Bitcoin had leapt from $20 to $900 and, at this point, Wu realized he could make 25 coins every 10 minutes. However, having gone all in with his savings, this return was not good enough. Wu realized he would need a more efficient way to mine. And then he remembered Zhan. After being given a crash course on Bitcoin, Zhan was tasked with creating a piece of equipment with the sole purpose of mining efficiently and quickly. On November 2013, the Antminer S1 was unveiled and the company has been skyrocketing every since.

Five years on and tens of billions of dollars later, Bitmain has secured investment from major companies across the globe. The deal included an investment from Japanese tech giant, Softbank, which currently holds a 15 percent stake in the successful ride-hailing app, Uber. Tencent, the developer of China’s most popular social media network, WeChat, which has over 1 billion monthly users and recently outstripped Facebook’s market cap by $72 billion in March 2018, also invested. Reports suggest that Bitmain is planning to launch its IPO on the Hong Kong Stock Exchange (HKEX) in September 2018, at an estimated valuation of $30 billion. In the first quarter of 2018 alone, Bitmain earned around $1 billion in net profit, closing a Series B funding round that saw its valuation rise to $12 billion at the time.

Bitmain also secured between $300 and $400 million from a Sequoia Capital subsidiary (Sequoia China), U.S hedge fund Coatue and EDBI — a governmental investment fund based in Singapore — in a Series B funding round in June.

Block party: How Bitmain maintains its vice grip

Bitmain’s transformation of the market with the Antminer S1 not only meant that the graphics cards and CPUs used by home computers could no longer keep up, but also that people who mined as a hobby were presented with a steep financial barrier if they wanted to shake it with the pros. Bitmain’s latest rig, the Antminer S9, is currently the most powerful miner available on the market. The rig has a hash rate of 13.5TH/s ±5 percent and can produce north of $300 in revenue per month. Bitcoin mining consumes vast quantities of energy, with one estimate stating that it is due to use a half percent of the world’s energy by the end of 2018. Small time players often find that the exorbitant energy consumption, combined with the cost of purchasing the number of needed units, makes it impossible to turn a meaningful profit. Bitmain’s ASICs are nonrefundable, bringing a consistent and irrefutable source of income, although the Antminer S9 does come with a (limited) warranty.

A prime example of vertical integration, Bitmain has designed every piece of equipment that goes into its rigs, builds them itself and then sells them to a client base that spans the globe. As well as renting out the machines on contract, Bitmain has also developed several sites with enormous concentrations of processing equipment, meaning they are able to improve their chances of mining new blocks. Miners are rewarded with a certain number of Bitcoin per block added to the blockchain. Blocks are found roughly every 10 minutes, meaning that the biggest players are able to make up to $7 million a day. Currently, Bitmain Technologies controls 45 percent of all existing computing power in the network.

Bitmain Control

Decentralization

Described as the ‘business brains’ behind Bitmain, Wu’s company has brought him both wealth and controversy. Bitmain’s processing power and domination of the market means that they have a lot of clout within the network. Most notably, Wu has consistently advocated for the increase of Bitcoin’s transaction capacity by eliminating the current 1 MB limit. Wu’s vocal support for this move led to the suspicion that he was behind the recent Bitcoin-Bitcoin Cash hard fork, aided by the fact that the split was supported by ViaBTC, a company that Bitmain happens to have invested in.

In spite of Wu’s claims of innocence, others still believe he has ulterior motives. In the words of Jack Liao, operator of the Shenzhen-based mining company, Lightning ASIC:

“He wants to control the code, he wants to control the environment[…]Then he can design the entire Bitcoin ecosystem.”

If true, the allegations suggest that Bitcoin is vulnerable to manipulation by both traders, who have large quantities of Bitcoin, and miners like Bitmain.

The CSO of the cyrptocurrency consulting firm Blockstream, Samson Mow, wrote in Fortune:

‘Jihan does have a lot of control for now, and much of that is simply due to mining centralization. As Bitmain is so vertically integrated, from selling ASICs, to operating mining farms, to running mining pools, he can prevent network upgrades and attempt to hijack the Bitcoin brand with things like [Bitcoin Cash].’

Despite this, Mow still believes the democratic and decentralized values that underpin Bitcoin remain uncompromised. Mow maintains that the real power lies with the users and that any power held by Wu will be short-lived.

Dark clouds on the horizon: Bitmain and a changing industry

Though Bitmain’s prominence over Bitcoin mining is undeniable, other players are starting to encroach upon its turf.

The mining giant’s fiercest competitor is Canaan, which recently announced its intention to launch an IPO. If successful, Canaan could beat Bitmain in becoming the first blockchain-based company to ever be listed on the HKEX. An unnamed source recently told the South China Morning Post that the company hopes to raise $1 billion. Prior to the HKEX, the company had been considering listing in the United States. Canaan’s previous attempts in China fell through after regulators disagreed with the proposed valuation of the deal.

Though Canaan operates 15 percent of the mining market, it is dwarfed by Bitmain’s 75 percent. And Bitmain doesn’t intend to give up any ground without a fight. Bitmain has a 66.6 percent share of global shipments compared to Canaan’s 20.9 percent. Canaan has been hard at work to remedy this, greatly increasing its prepayments to both Taiwan Semiconductor Manufacturing Corp. and Global Unichip Corp in an effort to get the upper hand over future production. However, Bitmain is in a stronger position to defend its sought-after position at the pinnacle of the industry.

Bitmain and Canaan

Since the introduction of the Antminer S5 several years ago, their power consumption has been slashed by about a third. This had the dual effect of allowing Bitmain to harvest Bitcoin at a great rate than ever before, while also attracting other miners who sought to buy the rigs for their own use. This left Bitmain with a 50 percent profit margin on the product. Now onto its ninth incarnation, Bitmain’s Antminer devices continue to hold on to their prestigious position at the top of the market. In a bid to ensure this is the state of affairs for the foreseeable future, the company slashed the prices of their product by more than 80 percent, in turn, forcing Canaan to lower the price of its A841 by 30 percent. It’s likely the products’ profitability will suffer, but Bitmain has its position of power and profit margin on its side.

Intelligent Design: Bitmain looks to AI to keep ahead of the curve

For the last two years, the brains behind Bitmain’s software innovation, Micree Zhan, has been working on a deep learning chip. Inspired by Liu Cixin’s wildly popular science-fiction novel, The Three-Body Problem, Zhan’s eureka moment came to him during his decades-long habit of meditation. Zhan was inspired by something called Sophon, a fictional proton-sized computer sent by an alien civilization to bring scientific discovery on Earth to a grinding halt. The long and short of this fictional example is that the aliens use the technology to take over the planet. It doesn’t take a wild stretch of the imagination to see how this translates to Bitmain’s dominance of the industry, along with its desire to keep things that way.

These souped-up ASICs could be a shot in the arm for the mining industry. Michael Bedford Taylor, a professor at the University of Washington, spoke about the kind of technology Zhan is trying to develop, albeit from a more communitarian perspective:

“This will invigorate the hardware field[…] We are about to see the emergence of all kinds of ASICs clouds, and the Bitcoin hardware community has demonstrated that under the right conditions, this can happen rapidly as a grassroots effort.”

Zhan’s idea is to incorporate some of the most common deep learning algorithms into Bitmain’s devices. With this generation of ASICs, users will be able to apply their own datasets and build their own models. The AI incorporated into the new devices will learn from the results and improve at a vastly accelerated pace. Google’s Deep Mind unit uses the same technology to train its AlphaGo artificial intelligence by using Tensor Processing Unit chips.

Their first publicly available version of this intelligent design vision is called the Sophon BM1680, which was released in October 2017. The chip can greatly speed up machine learning. Wu estimates that AI chips could bring in up to 40 percent of Bitmain’s revenue in the next five years.

President for life: Bitmain moves abroad to avoid clampdown

Thanks in part to low electricity rates, China was reported to have filed the most patents for blockchain in the world. However, moves to both regulate the crypto sphere and restrict the power consumption of miners threatens to drastically change the business environment in China.

In an effort to resist the clampdown, Bitmain has already begun to shift its operations abroad. In December 2017, Bitmain Switzerland was registered in the small Swiss canton of Zug. The company was registered under the name of Bitmain co-founder Jihan Wu, as well as that of Chinese national Ti Liu and Swiss national Christian Johannes Meisser. A spokesman told the Swiss paper Handelszeitung about the move:

“Bitmain Switzerland will play a central role during our global expansion.”

In a press release on Aug. 6, Bitmain revealed that it will also build a $500 million blockchain data center and mining facility in Texas. Situated in Rockdale, Texas, the project is due to finish in late 2018 and to begin operations by early 2019.

As philosophical debates rage about the future of blockchain and how it should be developed, Bitmain is sure to remain a powerful player at the international table. Whether its innovations contribute to the decentralization and democratic values that are so important to the community at large, however, remains to be seen.

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Bitmain Discloses Shipping and Mining Policies for a ‘Fair and Transparent Ecosystem’

Chinese mining hardware giant Bitmain, one of the leading Bitcoin (BTC) mining firms worldwide, announced its policies for mining practices, according to an official blogpost July 25.

The recent list of policies intend to show Bitmain’s commitment to providing a “fair and transparent cryptocurrency ecosystem” in terms of policies for mining hardware shipping as well as those of mining practices.

Regarding shipping, Bitmain proposed four major measures including order quantity restriction, establishment of a “first-paid-first-ship” order of fulfillment, combatting “hoarding” practices, as well as publishing monthly reports on shipping updates.

Every 30 days, the company will disclose data advising the community on which algorithms Bitmain is mining for itself as well as the total hashrate of Bitmain hardware on those algorithms. The ASIC manufacturer will also provide regular shipping and volume information of new miners on the official Antminer Twitter account.

Bitmain reiterated its zero tolerance policy on “secret mining” practices. Secret mining is a process wherein ASIC manufacturers mine with new hardware before making that equipment available to the public. The company claimed that it has been always taken a negative stance towards the practice, emphasizing its “long-held zero-tolerance policy” on the matter. The company also clarified that it will not try to mine empty blocks:

“While often described as the result of sinister intent, empty blocks often occur because of issues in block propagation at the protocol level rather than active decision-making by mining pool operators.  We are actively working towards mitigating these issues.”

In August 2017, Antpool mining operator, managed by Bitmain, allegedly caused transaction delays and a surge of transaction fees by mining empty blocks.

Earlier this month, Chinese sources reported that Bitmain is now valued at $12 billion after a Series B funding round. Bitmain ostensibly raised between $300 million to $400 million from Sequoia Capital subsidiary Sequoia China, U.S. hedge fund Coatue, and Singapore-based governmental investment fund EDBI.

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Bitmain’s New Transparency Policy Met With Community Skepticism

Bitmain, one of the world’s most valuable cryptocurrency-related companies, has just introduced new policies and practices that hope to show that the firm is committing to full transparency and higher levels of communication with the cryptocurrency community.

A statement released by the firm highlighted the importance of transparency, stating:

As many of you have no doubt noticed, Bitmain has started to explore policies and behaviors that aim to increase transparency and foster greater dialogue between us and the cryptocurrency communities at large. To put it plainly, we believe that communities served by Bitmain and its products should be supported and served as transparently as possible.

While some thought that this statement was “all talk, no action,” Bitmain went on to highlight a few measures that it has been taking to increase the levels of transparency it has with the public.

The New Shipping Practices Enlisted By Bitmain 

To ensure that all users have a fair chance at receiving a Bitmain-manufactured ASIC machine, the firm will be introducing new policies, which include “restricting order quantities, ensuring a first-paid-first-ship order of fulfillment, blocking IPs that we suspect to be hoarding, and publishing detailed shipping updates openly.”

Additionally, when Bitmain releases a new ASIC machine, tweets will be issued through the official Antminer Twitter account regarding the volume and shipping information for the first batch of a new model.  The firm reasoned that due to the fact that ASICs often change the mining situation of a blockchain, that it would be good to let the community know ahead of time of what impact could occur.

All these measures that the firm will be enacting will help create a cleaner and fair ecosystem for the mining community, along with lower levels of mining centralization as we move into the future.

Bitmain Releases Internal Hashrate Stats, Users Skeptical

As a part of the measures taken to show transparency, Bitmain also released a disclosure report of the hashrate contributed to assorted blockchains by company-owned hardware (ASICs).

The statistics, current as of July 22nd, show that Bitmain is currently running machines on three algorithms, SHA-256, Ethash, and Scrypt. The exact numbers are as follows:

  • SHA256: 1692.05 PH/s
  • ETHASH: 339.69 GH/s
  • SCRYPT: 44.19 GH/s

It is currently unclear what exact blockchains the mining machines are operating on, as the three algorithms span a wide range of cryptocurrencies, but at least the exact hashrate figures were brought to light.

Moving forward, Bitmain will update these figures once every 30 days to ensure up-to-date information is posted about the internal operations of the mining giant.

However, many users think that these hashrates don’t tell the whole story. Many skeptics took to Twitter to express their distrust in the aforementioned figures. CobraBitcoin, a long-time Bitcoin community member and co-owner of Bitcoin.org and BitcoinTalk, issued a tweet regarding the figures which he sees as false.

Other users speculated that Bitmain was still engaging in the so-called “secret mining” practice, which is when a firm anonymously mines using pre-released ASICs to rake in cryptocurrencies. These suspicions were brought to light after a series of developments that were not directed linked to Bitmain occurred, leading some to extrapolate that Bitmain was engaging in this form of malpractice.

However, with these new policies, Bitmain has stated that it has a “zero tolerance policy against secret mining,” noting that it has been unfairly accused of this practice.

It is unclear whether the statements released by the hardware manufacturer have had any effect on public sentiment, but nonetheless, Bitmain has remained steady in its goal to portray itself as a transparent firm, writing:

We present these efforts as our contribution to assuring both new and veteran participants of our commitment to a fair and transparent cryptocurrency ecosystem. Our intent is to both reflect and reinforce the philosophies that brought all of us here in the first place. We look forward to continuing the dialogue.

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Bitcoin Mining Firm Opens Massive Farm In Canada Despite Declining Prices

On July 16th, Hut 8, one of Canada‘s foremost Bitcoin mining firms, announced that the construction of its newest mining facility was complete.

The press release issued by the company states that its new Bitcoin mining facility, located in the small Canadian city of Medicine Hat, has been recently completed, including the recent electrification of 24 “BlockBox” datacenters. Hut 8 revealed that this operation was completed two months ahead of its September 2018 deadline, as a result of their “employees hard work” and help from third-party entities.

With these new installations, Hut 8 now operates 40 BlockBox datacenters in Medicine Hat and 17 in the nearby city of Drumheller, with each of these datacenters requiring 1.2 MW of electricity at full power.

According to the firm, 66.7 MW of energy of “fully-funded operating power” can output a staggering 487.5 petahashes per second. Andrew Kiguel, President, and CEO of Hut 8 gave a statement regarding the new facility and state of his company, noting:

With 66.7 MW of aggregate operating capacity, we believe we are the largest cryptocurrency miner in Canada and the largest publicly-traded cryptocurrency miner by operating capacity in the world.

Hut 8 Still Sees Successful Start to 2018 Despite Declining Prices 

Despite seeing Bitcoin prices fall by nearly 70% since the start of the year, and mining profits fall even further, Hut 8 still has managed to procure nearly 1,900 Bitcoin since the launch of the firm in December. At current market values, Hut 8’s Bitcoin stash totals to a value of over $14.1 million U.S. dollars.

It has become apparent that BitFury, one of Bitmain’s main competitors, was integral to the success of the company, who provided Hut 8 with powerful mining hardware and essential services. The so-called ‘BlockBoxes’ are reported to output a total of 9 petahashes/second, easily outperforming a majority of other ASIC facilities.

Hut 8’s Publicly Traded Shares Jump 15% 

Hut 8 raised $108 million Canadian dollars from two separate financings at an earlier date last year. But now, the collective value of all of Hut 8’s publicly traded shares, with the ticker HUT.V, is at $252 million, with this price level indicating the market sees this firm as a good investment.

As a result of the aforementioned announcement, coupled with Bitcoin’s most recent price surge, HUT has risen by over 15% in the past three days.

According to CoinTelegraph, unnamed insider sources still expect for the shares of the firm to still reach a target of $7.85 within the near future, despite currently sitting at just ~40% of that price target.

It is currently unclear whether the predictions of these sources will be accurate, but Hut’s influence over the Bitcoin mining industry should not be underestimated.

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