Sequoia, IDG to Invest $50M in China’s Bitcoin Mining Company Bitmain

| Updated
by Maria Konash · 3 min read
Sequoia, IDG to Invest $50M in China’s Bitcoin Mining Company Bitmain
Photo: Bitmain/Facebook

Beijing-based Bitmain receives solid investments and now is planning to get into the deep learning arms race producing chips for artificial intelligence.

Sequoia Capital and IDG Capital are investing $50M in Bitmain Technologies Ltd., created by Wu Jihan and Micree Zhan, and considered by many to be the world’s largest bitcoin mining organization.

To understand the role of Beijing-based Bitmain in the $74 billion bitcoin economy, its necessary to keep in mind the company’s profile.

Firstly, Bitmain designs the silicon that goes into its bitcoin mining rigs. Secondly, it assembles the machines, and sells them around the world as well as operates its own mining facilities. Apart from this, Bitmain runs vast bitcoin mines, which it rents out to others. And last, but not the least, it manages several of the world’s largest mining pools, together controlling 29 percent of all the processing power on the global bitcoin network. These include:

  • Antpool, the world’s largest bitcoin mining pool operator which controls around 16.8 percent of the global bitcoin hashrate, and is considered to be the most influential bitcoin mining equipment manufacturer in the market;
  • BTC dot com, one of the leading bitcoin mining pool operators, which accounts for around 12.2 percent of the global bitcoin hashrate.

Following the currency’s and the market value’s rise, Bitmain now is planning to cash in on artificial intelligence (AI) and invest in mining facilities in the U.S.

Speaking about AI, Bitmain’s newest product – the Sophon is poised to challenge the likes of Google, Nvidia, and AMD in the deep learning techs’ competition.

If everything goes as planned, thousands of Bitmain Sophon units could be training neural networks in vast data centers around the world as early as before the year’s end.

According to Michael Bedford Taylor, a professor at the University of Washington, these types of chips, called application-specific integrated circuits, or ASICs, designed to perform a single function extremely efficiently, could create the next wave of distributed computing:

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.

Wang, a veteran of Baidu and Google, states that Bitmain has several advantages over other competitors in deep-learning race due to the fact that deep learning industry is now going through the same evolution that bitcoin miners already experienced: mining technology evolved to graphics cards, and then to custom silicon from individuals using desktop computers.

Meanwhile, QWang Chun, the owner of F2Pool, recently claimed via Twitter that Bitmain sued a company he invested in for $4 billion.

F2Pool is the fifth largest bitcoin mining pool in the market behind well-known  AntPool, BTC.TOP, ViaBTC, accounting for 9.3 percent of the global bitcoin hashrate.

For the record, Bitmain has already been criticized by many experts for pursuing legal action against companies and threatening startups with large-scale lawsuits within the bitcoin sector.

Bitmain has provided no statements on the matter yet and would scarcely do this.

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Maria Konash
Editor-in-Chief Maria Konash

Being a successful graduate of Belarusian State Economic University (BSEU), Maria has acquired competencies in economic and social studies. Given Maria’s previous research working experience, and desire to explore what's really shaping the future, the main research focus is placed on FinTech and Blockchain Technology.

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