Photo: Bitmain Blog
The Chinese-based mining giant and ASIC hardware manufacturer, Bitmain, unveiled a new 7-nanometer Bitcoin mining processor. The new ASIC (application-specific integrated circuit), will offer new levels of energy efficiency according to the company. This new mining hardware, BM1397, features an excellent design for mining cryptos that use the SHA256 algorithm for their proof-of-work (PoW).
Some of the major digital tokens that use the SHA256 algorithm include Bitcoin Cash (BCH) and Bitcoin (BTC). Bitmain announced the updates in a blog post published on February 18, 2019. The new BM1397 chip provides faster and cheaper cryptocurrency mining according to that announcement. It is manufactured using a 7nm FinFET process from Taiwan Semiconductor Manufacturing Company (TSMC), Bitmain’s primary chip supplying contractor.
The new chip amalgamates new chip design methodology together with an outstanding 7nm semiconductor manufacturing process. It requires lower power to operate offering energy consumption to computing ratio of as low as 30J/TH. Bitmain added that:
“This is a 28.6% improvement in power efficiency in comparison with Bitmain’s previous 7nm chip, the BM1391. To achieve this, Bitmain’s engineering team has carefully customized the chip design to optimize its architecture, circuit and economics.”
Antminers
The latest ASIC will feature in the new S17 and T17 Antminer mining devices that Bitmain plans to launch later. This announcement comes a few months after the company unveiled its most recent S15 and T15 Antminers in November 2018. Both of these devices are powered entirely by the BM1391 ASIC.
The company also launched ASIC miners for ethereum and zcash cryptocurrencies last year. That move made ethereum’s open-source development community developers to agree to implement an ASIC-blocking algorithm in January 2019.
The algorithm, programmatic proof of work (ProgPoW), restricts the mining hardware on the network. However, ProgPoW faced delays earlier this February to give way for audits to gauge the effectiveness of the method.
The Bears of 2018
The company will hope that this launch of a new mining processor will, in turn, improve its fortunes. 2018 was a hard year in the entire crypto market arena. An uninformed bet on BCH saw Bitmain lose over $740 million in Q3 2018 alone. In the fourth quarter of 2018, the company slashed its staff strength considerably in some cases laying of whole departments.
Initially, the company dismissed its Israeli-based R&D department before firing its Bitcoin Cash development team. The co-founders Ketuan Zhan and Jihan Wu also left with reports emerging that the company was in search of a new CEO. The IPO plans suffered due to the dismal 2018 cryptocurrency markets. At the begging of this year, we announced that Bitmain’s proposed mega mining facility in Texas was put on hold.
The mining business, in which Bitmain Technologies was leading, is becoming unsustainable; the persistent bearish market is partially to blame.
A Blemished IPO
The company may have lost approximately $500 million in Q3 2018 amid a generally bearish cryptocurrency market. Bitmain recently published an update on its financial results to the Hong Kong Stock Exchange (HKEx). The exchange is reviewing Bitmain’s application for an IPO (initial public offering). As confirmed in our earlier post, the IPO application was originally filed in September 2018.
This update revealed that Bitmain earned almost $500 million in the first nine months of 2018. The earnings originated from slightly over $3 billion of revenues according to a genuine source familiar with the situation. However, the private filing does not break down the results on a quarterly basis.
Previously, Bitmain announced that it had grossed profits of around $1 billion in the first half of last year. Subtracting that amount from a $500 million profit reported for the first nine months leaves a net loss of about $500 million for Q3. The company had also published $2.8 billion of revenues for the first half of 2018. Thus, the $3 billion figure for the first 9 months works out to Q3 revenues of a mere $200 million.
When contacted, the company declined to comment due to its pending IPO application. However, an unnamed representative for Bitmain denied the report saying:
“The rumors are not true, and we will make announcements in due course in accordance with the requirements of relevant laws and regulations”
Although Bitmain denies the allegations, the massive layoffs last year prove that the company was going through a severely bleak patch.
