Bitmain Antminer S7 and S9 Developer Dr. Yang Zuoxing’s Pangolin Miner Patent Dispute

Dr. Yang Zuoxing: The Real Developer Of Antminer S7 & S9 Who Was Betrayed By Bitmain in Pangolin Miner Patent Dispute: The Story That Keeps On Giving.

Bitmain’s Antminer S7 and Antminer S9 are not only their flagship product, they have had a major influence on crypto mining energy. But these massively successful products might have deep dark secrets associated with them.

According to Dr. Yang Zuoxing of Tsinghua University, the core developer who designed the ideas of these two chips was him and not from Bitmain’s development team.

Yang’s tenure with Bitmain

After graduating from Tsinghua University with a doctorate in engineering physics, Yang started to work on hardware design and later chip design. He designed the country’s first fiscal cash register and later Cortex A8-based SOC (System on a chip); the RFID chip he designed consumes 70x less power than those at average. For the past decade, Yang has been committed to low-wattage chip designs.

In 2014, Yang ventured into the crypto space. He worked with Friedcat, which was the earliest crypto mining hardware maker in China and designed the 28nm BE300 chip which outperformed Bitmain’s Antminer S5 in power consumption back then. After the mysterious missing of Friedcat in 2015, he told Bitmain’s co-founder Micree Zhan that the full-custom design methodology is perfect for mining chip design, and turned to help Bitmain to design Antminer S7 (chip 1385) and S9 (chip 1387) using his proposed methodology.

Yang is the first one to come up with adopting a full-custom design in crypto mining chip when others still used APR (auto place and routing) and could finish the chip design in 3-6 months. While when rivals began to use full-custom design, he could improve the chip performance by twice using the same methodology.

With his help, the power consumption and chip cost for S7 were reduced by almost 50%, and much better performance for S9 later. By virtue of obvious advantages in power consumption and cost of S7 and S9, Bitmain rose rapidly and soon dominated the market with over 70% share despite the mining sector was suffering from a bear in 2015 and 2016.

Bitmain’s betrayal

Even while working for S7 and S9, Yang found that Bitmain wasn’t compensating him enough for his contribution to the project. After five rounds of negotiations, Yang failed to receive funds from Bitmain. On June 8, 2016, Yang’s negotiations with Bitmain was officially ended. He felt he didn’t get the return as he helped a lot during Bitmain’s hard time. So he decided to set up his own company, design own chips, and no longer provide development support for Bitmain.

Yang established Shenzhen BitWei Technology Co., Ltd., whose main product is Pangolin Miner used for Bitcoin mining.

After the departure of Yang, Bitmain has not introduced any new chips and new miners with subversive advantages like S7 and S9. In addition, Bitmain’s Litecoin L3, Ethereum D3, Zcash Z9 and other technical indicators have also been overtaken by competitors such as “Innosilicon”.

Bitmain sues Shenzhen BitWei Technology

To prevent manufacturers from working with Bitewei (Shenma), in 2017, Bitmain sued Bitewei over a patent on series power supply circuit. It is first applied to mining chips by a technician at Bitfury, and later became a basic technology used by most mining chip manufacturers. Later, Yang’s Pangolin Miner used this technology and was sued by Bitmain.

Yang hired two legal’ teams and demanded the State Intellectual Property Office to revoke Bitmain’s patent and taking out the existing patent evidence in China and abroad. Ultimately, the Patent Reexamination Board of the State Intellectual Property Office decided to review the invalidation request.

A ruling was given in an instrument that Bitmain did not comply with the creative rights shown in Article 32 of Article 23 of the Patent Law of the People’s Republic of China. Thus Bitmain’s “series power supply ideas, virtual currency mining machines, and computer servers”  patent was invalidated.

Bitmain going through a rough patch

Earlier, Bitmain’s second-quarter financial statement was leaked, with losses ranging from $600m to $700m. At the same time, Bitmain’s Pre-IPO investors have changed mind again, both Softbank and Tencent have denied investing in Bitmain.

The divergence of Yang from the company marked the technical bottleneck in Bitmain in recent years. The key to the success of Bitmain is to capture the dividend of the chip process, dare to invest in the most advanced manufacturing process, and once again lead the chip design innovation. Over time, all competitors are aware of the significance of advancing the manufacturing process. Meanwhile, Bitmain’s core chip design capability has stopped or even regressed to become the Achilles heel of Bitmain.

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