Bitmain has been going through a lot lately, giving them a less-than-pleasing reputation. CoinDesk recently reported that Bitmain was preparing for their initial public offering (IPO), which was meant to be launched in September. However, this seemingly good news has not been well received.
On the social media front, investors have done everything from claiming that they do not have money to predicting a positive financial future. Unfortunately, this array of reports has resulted in many investors withdrawing their funding.
In a new development, Bitmain is experiencing some competition – Bitewei. Bitewei is based in Shenzhen, and they manufacture mining chips. The effort was established by Yang Zuoxing, which many people remember as the former director of Bitmain, and he has already raised about 140 million yuan, which is approximately $20 million. The first goal is to bring in market mining chips that will help to compete against other cryptocurrencies.
The COO of Bixin, Tyler Xiong, who was part of the initial investment with Bitewei, called the Whatsminer line of mining chips from this company “a game changer.” Bitewei has been around since July 2016, and many people consider it to be one of the most efficient types of hardware that is presently being sold in the industry and even the market. Based on the results of testing, their work in progress, Whatsminer M10, is planned to be about 30% more effective than the flagship product of the company – AntMiner S9 Hydro.
At this point, due to the promising reports about the new mining rigs, there are presently over 1,000 units on pre-order. Though the product will not be launched until September 19th, but the pre-sale already began in August. Each mining chip costs about $1,600, but there are variations based on the shipping batch, which means that the chips could easily bring in a revenue of above $1.6 million.
Still Bitewei is far from finished with their progress. Based on the IPO content, Bitmain presently is in control of over 85% of the market that sells it, so they have major dominance over it. They also have a business that turns out compatible software, ensuring that the BTC.com and AntPool mining pools can support about 30% of the miners on the network.
With such a large portion of the market, there are many cryptocurrency developers that believe that there is a direct conflict between open access to related protocols and the rewards they offer. Even with the Whatsminer products being available for pre-sale, there’s excitement about the providers that could revolutionize the industry.
The CEO of Obelisk, David Borick, believes that the fact that Bitewei is succeeding and thriving is proof enough to demonstrate the availability for competition.
“There should be a lot more players in the bitcoin mining space and a lot more manufacturers, especially if we can figure out everything that Whatsminer is doing to get the efficiency gains that they've been getting.”
There are many others in the industry that disagree, saying that the only true way to test out Bitewei is to see it in action, and prove that it will not go bankrupt like predecessors.
“It takes a lot, luck included, for a company to grow to that size and influence. It is hard for a new hardware company to get that influence now. Besides, there are only 4 million bitcoins left to mine.”
However, it is hard to ignore the initial success they have had, which is beyond what others have done.
To promote the pre-sale of Whatsminer M10, Bitewei published some of their testing results, which claim that their device can use under 68 watts per 1 trillion hashes. In comparison with their AntMiner S9 Hydro, the original product was only able to achieve about 96 watts per 1 trillion, which means more energy expenditure. Next, Yang wants to release a 7nm-chip bitcoin miner in 2019.
Vorick remained bullish in his belief in the competitive edge that Bitewei has, especially in comparison with other startups in the industry.
“It seems like the majority of the design talent at Bitmain is now at Whatsminer [Bitewei].”
That is probably why Yang seems fairly comfortable with the competition, since Bitcoin is inching below the $7,000 line.
According to CoinDesk, Yang said,
“The market always has ups and downs and 2018 is somewhat like 2014, during which the bitcoin price kept declining for a year.”
He also added,
“Nothing can stop the enthusiasm for people inside the industry. Outsiders may hesitate, like Intel or NVIDIA, but not us.”
Yang has been involved with the mining community for quite while before now. He went to Tsinghua University, where he got a Ph.D. in engineering physics. He was a chip designer with ASICMiner in 2014, and he was responsible for introducing what would be Bitmain’s AntMiner S7 in 2015. Upon realizing that he “didn’t feel respected” at Bitmain, he kept working on the AntMiner S7, while working on a new side project.
When Bitmain released it, Yang kept the ownership of his designs. As his contract ended in June 2016, he started Bitewei within a month. The investors in this project included some major players in the industry, including F2POOL’s Wang Chun and Mao Shixing, and Wu Ying, chairman of China Capital Group.
These transitions made for a clear rivalry between Bitewei and Bitmain, which has only gained more traction over the last two years. In fact, Bitmain went as far as to file a lawsuit for patent infringement, based on the use of the technology that Bitewei used for Whatsminer, which Bitmain received a patent for in 2016. However, the patent was invalidated by China's State Intellectual Property Office (SIPO) within a month.
According to the statement, SIPO said,
“If a technological solution sought by a patent has different characteristics than existing technologies, but such difference is public knowledge, then it is obvious the solution would incorporate this public knowledge.”
Yang hopes to make Bitewei the new innovator in the mining chip maker business. He said, “Full-custom methodology can be applied to literally every type of chip.”
He then added,
“Our miners' market share may go above 50 percent. But our own hashing power will never go above 50 percent, in fact, 10 percent will be already good enough.”