What in the World is Going on With Bitmain’s Crypto Mining Business? 2019 Update Review

There has been a lot of conversation in the crypto community in the past with regards to Bitmain and their operations.

In specific, there is even more speculation about the solvency and efficacy of the ownership of Bitmain after the crypto media publication, CoinDesk, released a report that alleges Bitmain lost $500 million during Q3 2018 in which we covered below:

Bitmain Q3 of 2018 Bitcoin Mining Reports Show $500 Million in Losses During Bear Market

According to the report, this was information t hat was leaked by an ‘inside source’.

However, Bitmain has put out a press release in lieu of the CoinDesk media report from an ‘inside source’ denying all of the claims that were made about the company’s solvency as well as their P/L:


Still, this has not stopped rampant speculation about Bitmain’s solvency.

This, of course, comes just weeks after Bitmain was forced to deny accusations and rumors of Jihan Wu’s alleged ‘dismissal’ from the company as its head and CEO:

Bitmain Continues to Adjust Staff as CEOs Jihan Wu and Micree Zhan Allegedly Steps Down as Well

What’s Going On With Bitmain?

With the slew of rumors circulating around the company — it is reasonable to speculate, ‘What in the world is going on?’

It is hard to believe that it is merely a coincidence that Bitmain has been the target of so many rumors in such a short space of time.

However, part of the reason for these rumors could be due to Bitmain’s general reputation in the crypto community, which is that of a ‘dirty’ company that does not “play by the rules”.

Passages from David Vorick’s article titled, ‘The State of Cryptocurrency Mining’, yield some insight into how Bitmain is perceived into the cryptocurrency space and the types of ‘underhanded’ / ‘dirty’ actions that they take against their competitors.

Below is an example:

David Vorick also mentions warnings that he and the Siacoin received about Bitmain when they were attempting to build their ASIC miner.

In specific, he notes how many warned him that if Bitmain figured out that the Siacoin team were using a Chinese manufacturer (Bitmain is based in China) to source the manufacturing and production for their ASIC chip, then Bitmain would undermine those efforts somehow.

David notes that the Siacoin team proceeded to use a Chinese manufacturer anyway. However, he notes that:

“ We did everything we could to keep the entity disconnected from Obelisk, and we hid the name of the manufacturer from our website or any public data, and we were very careful with who we gave the name of our manufacturer privately. We had a separate entity put in parts orders where we could.”

Despite the purposeful attempts to source manufacturing in China without being noticed, David states that the following happened:

“ After any reasonable timeframe to reach out to another manufacturer, after-hours on a Friday night, our manufacturer reached out to us and said with little warning or reasonable explanation that they would be unable to manufacture for us. Just as we had been warned, our attempt to manufacture in China had fallen flat on its face. This setback is estimated to have cost us somewhere north of $2 million.”

To be clear, David is clear to state that, “ We have absolutely no evidence that Bitmain was involved in any way. We’ve had other companies reach out to us and confirm that they’ve experienced similar things, but they too had no concrete evidence that Bitmain was involved in any way.”

But the clear implication from this passage of the article was that there is a high likelihood that Bitmain was behind these efforts.

Cost Effectiveness for Bitmain

Another passage in the David Vorick article that was interesting was the regaling of details about Bitmain’s efficiency in terms of chip production and payment rates for electricity.

In specific, David states:

“It’s really hard to know where Bitmain is at, but based on everything we’ve been seeing we estimate that Bitmain is somewhere around the $30 per kilowatt per month mark. That is, they are doing better than the median mining operation, but by no means are they in the elite tier.”

This is insightful because one would expect a large mining company like Bitmain that has allegedly accrued so much money in revenue to be getting the best rates on electricity in the industry.

However, according to David, this is far from the case.

David also states that:

More Inside Information On Bitmain’s Current Reserve Cash

Twitter user, ‘@btcking555’, an individual who is known for tracking information pertaining to Bitmain, its subsidiaries and information related to its mining operations in specific posted this tweet today (February 19th, 2019):

Preliminary research appears to corroborate this statement as the author was able to find a wallet belonging to Bitmain that contains 3k Bitcoins in it currently ( 1KwA4fS4uVuCNjCtMivE7m5ATbv93UZg8V ).


Bitmain is a giant question mark at this point in time. The rumors, ‘leaks’, and unverified reports coming from numerous different sources appear to yield great evidence of financial troubles and inner-turmoil within the mining company — but until there is more verified evidence/information, this must be considered speculation for the time being.

It is worth noting, however, that the significant decline in the crypto space throughout the majority of 2018 to this point has led to the bankruptcy and dissolution of countless crypto firms and projects in the space. So, the concept that Bitmain is currently facing financial troubles or that Bitmain suffered a major loss at some point in 2018 is extremely plausible.

There are hardly any companies or projects that were able to successfully make it out of 2018 unscathed and just about every sector of the crypto markets apart from VC investment saw a significant decline in funding, interest, and volume throughout the year.

However, without verified reports on some of the data and information that is being shared throughout the space, the impact of the 2018 bear market is currently unknown.

Picture Credit: Verdict

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