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Bitcoin Mining Behemoth, Bitmain, Reaches Stratospheric Valuation After Latest Funding Round

Bitmain, the largest cryptocurrency mining company in the world continues to attain even greater heights. The number one manufacturer of application specific integrated circuit (ASIC) bitcoin miners is now valued at $12 billion. This new valuation follows the recently concluded series B funding round which realized $400 million for the company. There are also reports that Bitmain plans to buy a majority stake in the upcoming Opera Ltd. IPO.

Worth $12 Billion

Local Chinese media outlet, Caixin, reported that a conglomerate of investors was able to raise $400 million in a new funding round for the mining giant. China-based Sequoia Capital, U.S.-based Coatue hedge fund, and Singapore government-owned EDBI were the primary investors in the funding drive. Sequoia Capital was also involved in Bitmain’s series A funding back in July 2017 which raised $50 million.

According to reports from the company, Bitmain might be conducting an IPO soon. Inside sources reveal that Hong Kong would likely be the location for the offering. If the company does go through with such a plan, it will join fellow mining company Canaan Creative which announced its IPO earlier in the year.

Bitmain is also gearing up to invest in the upcoming Opera Ltd. IPO. Opera is the company behind the eponymous web browser – Opera internet browser for desktop and smartphones. According to reports, Bitmain wishes to invest $50 million in buying the company’s shares during its $115 million IPO.

In a matter of four years, Bitmain has made itself become one of the most successful companies in the blockchain industry. The company reportedly made profits of about $3 billion to $4 billion in 2017. Bitmain controls the market for Bitcoin mining as the largest manufacturer of mining rig hardware.

Approaching 51 Percent Control of the Bitcoin Hashrate

Bitmain’s monopoly of the Bitcoin mining scene isn’t restricted to the manufacture of ASICs alone. The company also owns AntPool and, the two largest BTC mining pools as well as a controlling stake in ViaBTC, the third largest mining pool. Together all three allow Bitmain to approach nearly 51 percent control of the Bitcoin mining hashrate. With such a level of control, the company could theoretically manipulate the BTC network. Bitmain has, however, maintained that it has no incentive to carry out such an attack, considering the sweeping financial ramifications.

The company also recently became a member of the 21 EOS block producers (BPs). EOS had faced a multitude of issues since its mainnet launch last month. There are widespread concerns about a lack of decentralization in the project. Reports emerged recently that stakeholders were trying to create a new constitution for the project.

Will Bitmain be able to control 51 percent of the Bitcoin network hashrate? Do you think Bitmain will be able to dominate the EOS mainnet? Keep the conversation going in the comment section below

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Bitmain is Now One of The 21 EOS Block Producers

Bitmain, the controversial company specialized in crypto mining created by Jihan Wu has added a new achievement to its successful history: The team is now one of the 21 block producers of the EOS blockchain.

The Chinese company is known for virtually dominating the ASICS market. With very little competition, Antminers are undoubtedly the kings of the business.

In addition to dominating the mining hardware market, Bitmain also rules mining activity itself. Many of its equipments are put to work on a profit-making basis which directly goes to them.

At this moment, Bitmain runs AntPool, one of the world’s leading BTC and BCH mining pools with 15% of the total BTC hashing power. Also,, another subsidiary of Bitmain, controls nearly 23% of the total mining power. If to this we add that Bitmain also holds stakes in ViaBTC (which controls around 10% of BTC hashing power) having invested over 3 million dollars on that pool, there is a general opinion among analysts that Bitmain controls almost half of the mining power of BTC hash rate, having the capacity to carry out a 51% attack on the network if they considered it convenient.

Jihan Wu and other advocates reject such accusations. They argue that it would be illogical to carry out such a task because of the economic losses this would represent.

Bitmain Enters the EOS Universe

However, the world of cryptocurrency is an extremely lucrative business, and Bitmain does not seem to settle with BTC and BCH. A few hours ago they tweeted they got enough votes to be one of the 21 EOS Block Producers.

This would allow EOSAntPool to participate in the processes of block forging and elections in the network with considerable -yet not as widespread- power as that which they possess over the BCH and BTC network.

According to the information provided by EOSAntPool, they have now received more than 51,000 votes, which would generate a daily reward of 840 EOS. This translates into an average profit of 7,467 USD, based on the value of the EOS token at the time of writing ($8.89).

Having now a stake in EOS, Bitmain would put an amount of $2.7 million a year into their pockets, which would represent approximately 1% of their total annual earnings by comparing the results to last year’s profits and counting on consistent EOS token prices.

Similarly, another of the controversial block producers is Bitfinex. The Exchange, which has recently been the target of several scandals accusing it of using USDT (a stablecoin created by the same team) to manipulate the cryptomarket, is currently the largest block producer in the network with a total reward of 1020 EOS per day.


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BPs Freezing Seven Accounts is a Violation of the EOS Constitution

EOS BPs Violating its Own Constitution

EOS is back in the news again, this time for apparently violating its constitution. According to reports, the 21 EOS BPs have frozen seven accounts allegedly involved in a phising scam. The decision to freeze the accounts has brought up a lot of controversies. Many critics say it is yet another example of the lack of decentralization in the EOS project.

Details of the Freeze

The 21 EOS block producers (BPs) unanimously voted to freeze seven EOS accounts. There are allegatins that these seven accounts held stolen funds from a suspected phishing attack. The BPs decided as part of the EOS911 protocol which was initiated by EOS42 – one of the 21 BPs. This initiative enables the recovery of stolen funds. However, the main bone of contention is that the decision by the BPs contravenes the provisions of the EOS constitution. Article IX of the EOS constitution states:

Dispute Resolution – All disputes arising out of or in connection with this Constitution shall be finally settled under the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators appointed in accordance with the said Rules.

Based on Article IX of EOS’ controversial constitution, BPs don’t have the authority to make such decisions. The power to resolves disputes is solely in the hands of an “arbitration body.” The role of the BPs is to carryout out the resolutions reached during arbitration.

BPs Circumvent ECAF

The EOS Core Arbitration Forum (ECAF) was the arbitration body for this dispute. ECAF declined to take any action, citing limited authority to actthe in the matter. This decision was based on the fact that the main EOS constitution is yet to be ratified – only an interim constitution is in place at the moment.

With ECAF unwilling to act, the appears the BPs took it upon themselves to come to a decision. In a blog post by EOS New York, the BPs said:

We plead with the accompanying Block Producers/Candidates that the ECAF must step forward to issue the emergency freeze action on the affected accounts. Without this, we proceeded as a group to review the evidence ourselves and came to a difficult decision of executing based upon the evidence brought forth.

Reactions to the Actions of the EOS BPs

The decision by the BPs to freeze the seven accounts has generated a lot of debate within the cryptocurrency community. The major focus point on both sides of the argument is on the philosophy of blockchain immutability and decentralization. Critics like Jackson Palmer of Dogecoin, cryptographer, Nick Szabo, and Bitcoin Foundation co-founder, Charlie Shrem disagree with the decision of the BPs.

Most critics are against the monopoly of the 21 BPs. According to them, such a situation hardly qualifies as a decentralized blockchain. For the supporters of the BPs, they blockchains need protocols in place to punish bad actors.

The freezing of the seven accounts is the latest in a list of controversies surrounding the EOS project. A few days ago, activities on the mainnet shut down after a bug was discovered. The mainnet launch itself was plagued by bug issues as well as concerns over the voting process.

What are your views on the EOS decentralization debate? Do you think the 21 EOS BPs are monopolizing the control of the blockchain? Keep the conversation going in the comment section below.

Image courtesy of Twitter (@ummjackson, @NickSzabo4, and @CharlieShrem).