Cryptocurrency trading is a global activity, but Chinese chip makers have led the way in developing the most efficient mining machines to mine cryptocurrencies. Crypto mining unicorns – Bitmain (founded in 2013), Canaan (founded in 2013) and Ebang (in 2010) have risen rapidly in the digital gold rush within the past few years and were all seeking to go public this year.
This lucrative business has been drawing more and more players. Traditional chip giants Nvidia and AMD have made a foray into the crypto mining sector. Latecomers like Innosilicon, Panda Miner and Whatsminer (known as “Shenma” in China) are springing up.
In January 2017, a crypto mining manufacturer named Pangolin Miner released a SHA256 miner called Whatsminer M3, delivering a maximum of 12 trillion hashes per second (TH/s) with power consumption at 2000W, which became a hit that could compete with Antminer S9 in the mining market.
Last week the company announced the launch of a new miner called Whatsminer M10. According to its specifications, with a hashrate of around 30-33.5 TH/s and 2150W at the wall, M10, and 16nm chips, it will be a competent rival of GMO B3 miner and Avalonminer A9, both equipped with the newest 7nm chips.
With its mining rigs being eagerly sought, the founder of the company, Yang Zuoxing, has kept a low profile.
Jihan Wu, CEO of Bitmain (left) and Yang Zuoxing, founder of Whatsminer/Shenma (right)
After graduating from Tsinghua University with a doctorate in engineering physics, he started his career doing 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 (radio frequency identification device) chip he designed consumes 70x less power than other RFID chips on average. For the past decade, Yang has been committed to low-wattage chip designs.
In 2014, Yang made his foray into the crypto space. He worked with Friedcat (the earliest crypto mining hardware maker in China) and designed the 28nm BE300 chip which back then outperformed Bitmain’s Antminer S5 in power consumption. 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 full-custom design in crypto mining chip design when others still used APR (auto place and routing) and could finish the chip design in 3-6 months. While rivals began to use full-custom design, he could twice improve the chip performance by using the same methodology.
With his help, the power consumption and chip cost for S7 was reduced by almost 50%, and later created a much better performance for S9. 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 suffering from a decline in 2015 and 2016.
Yang left Bitmain and founded Bitewei Co. for Whatsminer or Shenma production in July 2016, as he failed to get financing from Bitmain after 5 rounds of negotiations.
After Yang left, Bitmain was unable to produce any innovative chips successfully. Bitmain’s 16nm BM1X89, 12nm BM1X90 and 10nm BM1X93, all failed. Bitmain is working 7nm chips now but gains are minimal.” As Blockstream CSO Samson commented on Yang’s great contribution to Bitmain.
To prevent manufacturers from working with Bitewei (Shenma), in 2017 Bitmain sued Bitewei over a patent on serial 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).
The patent has actually been filed by foreign technicians years ago, and the guy brought it to China when he visited the earliest miner manufacturer Friedcat based in Shenzhen.
In April 2018, China’s State Intellectual Property Office invalidated Bitmain’s patent, for Bitmain tried to patent common knowledge/prior art, which is obviously not an innovation anymore.
Advanced technology and talents are always the core competitive advantages of a company. With the rise of latecomers like Shenma, the competition of the crypto mining market in the second half of 2018 may be even more intense.
*Edited based on an article from 8btc