Mining Boom: Bitmain’s Profit Over $3 Billion According to Researchers

Beijing-based start-up Bitmain now dominates the Bitcoin mining industry. Last year it is estimated the company made as much money as chipmaker Nvidia did, according to estimates from researchers at Wall Street analyst Bernstein.

Based on conservative estimates, the analysts calculate that Bitmain made $3 to $4 billion in operating profit last year. Bernstein’s U.S. semiconductor team estimates Nvidia’s profit was $3 billion during the same period. What’s particularly striking is that Bitmain achieved this in a mere four years, while it took Nvidia 24 years, the Bernstein analysts said in a report published Wednesday, February 21st.


Crypto mining as an industry has gained significant traction as of late thanks to the frenzy seen in crypto markets. The technology behind these chips is also undergoing changes, with a focus on reducing the electrical energy consumption for every coin that is mined. On the sidelines, huge tracts of land are also being bought by different businesses across the globe to host data centers that support the crypto mining activity.

Just a few years ago, Bitcoin-enthusiasts could use normal graphic processing units (GPUs) to process the computations needed to mine the cryptocurrency. But Bitmain helped turn Bitcoin mining into a specialized process: In 2013 it began selling application-specific integrated circuits, or ASIC — GPUs that can mine Bitcoin up to 50 times faster than traditional cards.

Today, the company sells Antminer Bitcoin mining rigs that can cost several hundred to a few thousand dollars each. The company also operates mining pools, where participants collaborate on mining in attempts to cut costs. As a result, Bernstein estimates Bitmain has 70 to 80% of market share in Bitcoin miners and ASICs.


Bitmain has taken strategic steps to stay ahead of the game. The company launched a mining pool subsidiary last April in Israel and is opening mining farms in Canada and Switzerland, and regional headquarters in Singapore, according to the Bernstein report. Bitmain is also expanding its business to other cryptocurrencies like Ethereum and Monero.

The analysts estimate that most of Bitmain’s revenue was generated by selling miners powered by the company’s chips: “The rest was largely generated by mining itself and, to a much lesser extent, by collecting management fees from the mining pools it operates and renting out the mining power of its mining farms through cloud services.” Bernstein also indicated that Bitmain shrewdly adjusts the prices of its miners according to current Bitcoin prices.

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Multiple major entities around the globe show an interest in Bitcoin mining. That in itself is pretty interesting to keep an eye on. When players like Atlas Cloud Enterprises decide to get involved, things can change very quickly. The company has acquired a total of 1,000 Bitcoin miners. All of these devices are based on ASIC technology. The machines are manufactured by Bitmain and come in the form of the Antminer S9. It is evident Atlas Cloud has big plans for cryptocurrency mining moving forward.

Atlas Cloud is one of the latest big players to get on board with Bitcoin mining. The company will set up this venture at the Grant County Data Center. This particular venue will be converted into a full-fledged Bitcoin mining operations center. Until this change is complete, the company is working on a private co-located hosting arrangement. This confirms the company wants to get started with Bitcoin mining as soon as possible. Purchasing 1,000 Antminer S9 machines from Bitmain will be sufficient to get the ball rolling in this regard.

Atlas Cloud Embraces Bitcoin Mining

As of right now, the 1,000 units have arrived at the co-hosting location. It is expected the first batch of hardware will begin mining Bitcoin on or around February 1st. It will take some time to set up all machines properly, but the process should be completed two weeks later. With this mining capacity, Atlas Cloud will add 13.5 petahash to the Bitcoin network. This is not the biggest number, but it will help decentralize Bitcoin mining as a whole. More companies getting on board can only be considered to be a positive and welcome change.

Atlas Cloud expects to mine around 1.52 Bitcoin per day. At the current value, that would equate to over $15,500. Moreover, it seems the company will focus on mining through Slush Pool. That is a big feather in the cap of Bitcoin’s oldest mining pool to date. Depending on how much returns the company gets, they will swap between BTC and BCH mining. It is evident mining cryptocurrencies is about so much more than just Bitcoin these days. Bitcoin Cash tends to become more profitable on a regular basis.

Once the data center is ready, the miners will be moved to the new location as soon as possible. With an electricity cost of $0.03/kWh, it is a far more favorable location. It is expected 80% of the 3 MW of available power will be utilized from day one. This would mean Atlas Cloud cna add another 500-700 units until the maximum capacity is reached. An additional 2.0 MW will be added in 2019. The company has long-term plans for cryptocurrency mining, which is a positive sign. Electric City, Washington appears to be an interesting hub for cryptocurrency mining operations.

In a break from tradition, one of the planet’s leading tech-manufacturers are attempting to show that there’s life remaining in their products, even after most users have deemed them obsolete. At their recent developer’s conference, Samsung debuted a range of ways consumers could re-purpose their older devices. Known as the C-Lab, the team of visionaries showed off a facial recognition unit created using an old mobile phone, and a Galaxy S3 which had been “upcycled” into a fishtank control unit/photography suite.

Most interestingly of all perhaps was the cryptocurrency mining rig created from 40 Samsung Galaxy S5s. According to an information sheet provided at the conference, the creative division of the electronics giant estimate that it takes just eight S5s to mine at a greater efficiency than a desktop computer. Based on the specifications on display, the rig that the team showed off sounds like it would struggle to compete with the vast ASIC farms used to mine Bitcoin. However, it seems it would perform just fine mining any other proof-of-work coin and there are no shortage of options for users to choose from.

According to Kyle Wiens of iFixit, the problem with old electronics is often not with the hardware itself but with the software. This makes it incredibly wasteful to just let them gather dust in a drawer waiting for three days use when you accidentally leave your main-piece down the side of your mate’s couch at the weekend. The components comprising modern devices are still powerful. However, various insecurities within the operating systems don’t allow support for the most up to date applications. Wiens posited the question to Motherboard:

If you have this perfectly functional piece of hardware that doesn’t have good software anymore and you want to keep it running for ten years, how do you do that?

The answer is exactly what C-Lab is working towards. They plan on releasing designs for various upcycling projects as well as all the necessary software to wipe the old Android operating system off units, and replace it with programming that allows for its re-purposing. Wiens explained that the company had setup a placeholder github page with videos showing the potential uses for products which have been rendered obsolete. He continued to state that the project was completely open and would allow users to make and upload their projects and share their ideas with the community. This would allow all those “redundant” 2 to 3-year-old handsets and tablets to retain some value. Something that Wiens deems important given the pace of innovation in the technology industry and the cost of new devices:

The best thing for the planet is for your old devices to be worth as much as possible. There’s a direct correlation between secondary market value and environmental longevity. [Samsung] wants to maintain the value of their devices long term. If they know they’re going to justify a new price of a thousand dollars for a new Note, it’s easier to get people to spend that thousand dollars if they can resell it for five hundred.

Image: ShutterStock



A lot of people are familiar with the [email protected] project. Consumers can dedicate their computing power to finding new breakthroughs in scientific research. All it takes is installing the dedicated client to get up and running within a few minutes. Interestingly enough, the project sent out a positive message regarding Bitcoin about a week ago.

Bitcoin is quickly becoming a favorite tool to support charitable goals. [email protected] is one of the projects that received a five Bitcoin donation some time ago. At that time, Bitcoin was worth a lot less than it is today. Holding on to the donation amount allowed the team members to buy the replacement hard drives. After all, [email protected] is chewing through these disks at a quick pace.

Bitcoin ASIC Miner Support Comes To [email protected]

With the help of Bitcoin, the initiative’s team replaced their old hard drives without using their cash reserves. It is unclear if this means they sold the Bitcoin or used it to purchase the hardware directly. Several stores accept BTC payments in exchange for computer hardware. Finding a willing partner should not be an issue for [email protected] by any means.

More importantly, [email protected] allows users to use their Bitcoin mining hardware as well. The Bitcoin Utopia Project allows anyone in the world to contribute ASIC mining power to the folding project. A dedicated guide to setting up this project with Bitcoin Utopia can be found on the official website. Adding support for ASIC mining hardware is a smart move by the folding project, that much is certain.

A lot of Bitcoin enthusiasts have obsolete mining hardware at home. In most cases, they no longer run these ASICS as the electricity costs far outweigh the amount of Bitcoin generated. However, now that [email protected] supports ASIC support, some of these miners may be switched on again over the next few weeks. There is no reason to let the machines collect dust when they can be used to cure cancer and other illnesses.

Using Bitcoin ASIC hardware for the folding project may not persuade a lot of people to switch the miners back on, though. There is little to no money to be made from using the hardware for [email protected] right now. Considering how these machines draw over 1-kilowatt hour from the wall in most cases, it is doubtful someone will let it run unmonitored on a 24/7 basis. Then again, even running the ASIC miners for an hour a day will greatly benefit the project.

Header image courtesy of Shutterstock

An interesting statement was posted on Twitter by Olivier Janssens, as he explained an upcoming change in the Bitcoin Core client software. A patented optimization for ASIC mining – called AsicBoost – will be made obsolete in the next client update. That news did not go over well with a lot of members for sure.

Bitcoin Core Developers Dislike AsicBoost

This news is part of a substantial debate on Reddit for the past few days, as the AsicBoost optimization lets Bitcoin miners save roughly 10% on electricity usage and costs. Given the right rates of electricity costs in most parts of the world, a 10% different can make mining more profitable for some users, adding to the decentralisation of this concept.

At the same time, this announcement begs the question as to why Bitcoin Core developers want to remove such a feature, as that seems to have an adverse effect. There are some questions asked on Reddit as to why is behind this decision, and the name Blockstream is coming up several times as the potential instigators of this upcoming change.

People who have been mining Bitcoin for some time now will know how the mining difficulty has gone up by a significant margin in the past few months. The apparent reason for this ramping difficulty spike is due to more people mining, or at least more hardware being deployed. Still, a 10% boost to require less electricity while mining is nothing to sneeze at.

According to the statement posted by one of the Bitcoin Core developers, this change will be made to fight the centralization of Bitcoin mining. However, AsicBoost is a patented technology available to only some users, which gives them a somewhat unfair advantage for using the “right” hardware. Given the decentralised nature of Bitcoin and mining, such an advantage should be rooted out, so it would make some sense in this regard.

Then again, some ASIC manufacturers already produce far more efficient chips which are not made available to the public yet. This gives these companies an unfair advantage as well, and this has nothing to do with patented technology. Stopping such an improvement is all but impossible, which begs the question whether or not only completely open-source ASIC hardware should be allowed to mine Bitcoin.

In the end, there are advantages to the Bitcoin Core decision, and some people will disagree with removing AsicBoost as well. Bitcoin is designed to be a fair market where no one has a competitive advantage over everyone else, but enforcing that rule is a lot harder than it seems. Bitcoin mining will never be fair for everyone as this is determined by external factors beyond the control of developers.

Source: Reddit

Header image courtesy of NewsBTC

Bitcoin was first introduced in the year 2009. Since then the digital currency’s network has been growing non-stop. Over the past few years, bitcoin network has grown over multiple times but not much changes have happened on the technical side since its inception.

The bitcoin block size has remained at 1 MB since the beginning and in order to ensure the survival of bitcoin, it is very important to increase the block size. The bitcoin community has realized the severity of the situation and there have been multiple attempts to increase the block sizes since then. However, being a distributed decentralized network any changes to the blockchain can be made only after a consensus is reached by a majority of the community.

Some of the Bitcoin Improvement Proposals for increasing block size includes BIP-100, BIP-101, BIP-102, Bitcoin Classic and more. However, all these proposals have been shot down by one segment of the bitcoin community or another. These proposals were rejected mainly due to self-serving reasons or apprehension about the validity and impact of  the proposed changes. The bitcoin mining community has been very vocal about block size increase since the beginning, at a cost of the whole bitcoin ecosystem.

Bitcoin miners are responsible for supplying the required processing power to keep the bitcoin network operational. The processing power contributed by miners is used to discover new blocks on the blockchain and process all bitcoin transactions happening over the network. For their contribution, they receive fresh bitcoins as a reward. As bitcoin network grows, the processing power required for mining bitcoin also increases. The increased processing power requirement is in direct correlation with the increasing complexity of mathematical problems that has to be solved to discover new blocks. Mining bitcoin is not possible with normal PCs or graphic processing units anymore like it was before. Most of the mining operations are now carried out by expensive and highly powerful application specific integrated circuits designed exclusively for that purpose.

Setting up a mining operation requires a lot of money and it is almost impossible to mine profitably with just one ASIC. This has led to companies with enough capital to set up data centers with hundreds of miners. This has led to massive commercialization of bitcoin mining, and a handful of such mining companies contribute almost all the mining power required to maintain the network.

Can Bitcoin Play Catch-up with Visa?

While everyone is busy debating about the proposals, no one is actually looking closely at the technical side of the equation. What needs to be done technically to increase the block size, or to increase the rate of transactions over the network. In the present state, the network is no capable of processing more than 7 transactions per second. According to an article in MIT Technology Review, the current bitcoin design is inefficient and it is capable of processing only 27 transactions per second, even with a block size of 4 MB. So, unless the developers pull up their socks and start working on redesigning bitcoin network, the digital currency will never live up to the expectations.

If bitcoin has to become a mainstream mode of payment, then it should be a lot better than what we have in our hands today. Visa processes over 2000 transactions per second and it is capable of handling as many as 50000 per second if required. Will bitcoin ever be able to compete with that? From where we are standing it doesn’t seem so. But fret not, for there is still some hope, as long as someone is working hard enough to change it.

Blockstream is one such company that is currently developing parallel networks that can process bitcoin transactions. If these parallel networks can work in tandem with blockchain, then we may be able to reduce the load on blockchain by distributing the load across the parallel networks as well. However, it still needs to be tested and for bitcoin’s sake, we hope it works.

Ref: Technical Roadblock Might Shatter Bitcoin Dreams

People always want to get the most out of their bitcoin mining rigs and rightly so. The difficulty levels of bitcoin algorithm are increasing daily and mining has become a competitive affair. Those who discover fresh blocks stand to gain the bitcoin network reward. In order to discover new blocks, the mining chips have to be able to generate enough processing power to break the encryption protocol to find the cryptographic nonce value for the new block. This processing power is supplied by custom built bitcoin mining application specific integrated circuits (ASICs).

There is always a constant struggle to optimize ASICs to generate more processing power while reducing the electricity consumption. By increasing the efficiency of hardware, bitcoin mining can be made more profitable. Most of the attempts at increasing the processing power are limited to designing better processor architecture. Now for the first time, a group of researchers from the University of Illinois has been involved in a research to improve the bitcoin mining process.

Approximate Bitcoin Mining Increases Miner Efficiency

Their research involves the implementation of  Approximate Bitcoin Mining process to increase the efficiency of mining hardware by up to 30 percent. A team of three researchers – Matthew Vilim, Henrey Duwe, and Rakesh Kumar propose the use of approximate mining circuits that trades of reliability with area and delay. They believe that by operating these circuits in ‘Better than Worst Case’ mode, they can further increase the gains.

In order to derive this solution, they exploit bitcoin mining’s intrinsic resilience to errors. Bitcoin mining hardware is designed to operate in a parallel fashion to avoid propagation of errors. This enables the circuits to process multiple solutions at the same time without one erroneous output compromising the whole process. Any erroneous solution presented to the Bitcoin network by miners are rejected.

The researchers have devised two ways of approximation – Functional Approximation and Operational Approximation. In functional approximation, the optimization is carried out by targeting the mining chips functionality. This is done by replacing the exiting circuits with an approximate version in a fashion to reduce the total area occupied by circuit components or delay. This leads to a slack which is recovered by increasing the frequency and throughput.

In operational approximation, the guard bands in the miner circuit are reduced and frequency is increased by running it with a negative timing slack. According to the paper published by the trio, this is the first time someone has attempted to optimize bitcoin mining by focusing on hardware instead of tweaking the algorithm. The researchers have attempted to reduce the delay by making changes to the adder. By optimizing the usage of mining chip’s real estate with approximation circuit design, manufacturers will be able to place more cores on the chip. This will increase the capability of bitcoin miners to process more hashes.

The simulations conducted by the researchers using Bitmain BM1385 miner after replacing the parameters has shown promising results with an increase in profitability by 15% to 30%. This research is just the beginning, a lot of such optimization studies are going to come in the future

Read the full research paper here

Ref: Approximate Bitcoin Mining - Paper

Bitcoin blockchain infrastructure provider BitFury Group has officially announced the mass production of the fastest and most effective 16nm Application Specific Integrated Circuit (ASIC) chip ever, that will bring unmatched energy efficiency to the Bitcoin network.

Bitcoin mining requires heavy doses of electricity, which has compelled people to raise questions about the environmental impacts of the process. Bloomberg once called Bitcoin Mining a Real-World Environmental Disaster.

Valery Vavilov, CEO of BitFury, said in the press release: “We are very excited to launch mass production of our super 16nm ASIC Chip.The final results of our hard work have fully met our expectations. We understand that it will be nearly impossible for any older technology to compete with the performance of our new 16nm technology.

Key Features

There are several features which make the 16nm ASIC chip an outstanding achievement:

  • The measured power efficiency of the chip ranges from 0.055 joules per gigahash to 0.07 joules per gigahash, for a computational target of 40 gigahash per second.
  • The chip can work with voltage as low as 0.35V, something which was previously unattainable with existing silicon devices.
  • The 16nm chip can deliver a minimum computing power of 100 gigahash per second, which can go to 140 gigahash per second using air cooling and up to 184 gigahash per second using immersion cooling.
  • The Bitcoin transaction processor boasts that the 16nm chip will succeed even in the upcoming “Exahash Era,” the period when the Bitcoin network computing power exceeds 1,000 pentahashes (quintillion hash operations) per second. The chip is programmed to deliver up to 4 times the amount of computing power at a given energy level than the currently-deployed 28nm ASIC.

The latest design from BitFury is definitely a significant advancement over the current 28nm ASIC and holds huge promise in reducing the environmental impacts of the energy-intensive Bitcoin mining process. Widespread adoption of similar technology can also go a long way in cutting down the operational expenses, resulting in higher profits for firms, as well.

Australia-based startup  Bitcoin Group has delayed its listing on the Australian Securities Exchange (ASX) after it found itself in trouble over doubts raised by the corporate watchdog on the involvement of the Australian Prime Minister Malcolm Turnbull and also on, what the company thinks were, the “misstatements” about the company’s profitability.

Bitcoin Group has already received the approval of Australian Securities and Investment Commission (ASIC) on 4 September 2015 for an AU$20 million public offer.

With the new developments, now the company has now set its eyes on 11 December 2015 as the listing date on the ASX, as per the supplementary prospectus.

The controversy erupted, when on 2 October 2015 the Bitcoin Group published an article titled “Is Bitcoin Mining really profitable?”on WeChat.

To set the record straight on this, the company has issued a detailed statement and has said that the “Bitcoin Group retracts all those statements made concerning profitability, auditing and costs in its publication on 2 October 2015, for which there was no reasonable basis.”

On 7 October 2015, Bitcoin Group Limited published another article on WeChat which gave the impression that the Australian Prime Minister was somehow involved in the bidding for shares in the Bitcoin IPO in Sydney.

Now, in the fresh statement, the company has clarified on this issue with the aim of answering all these questions and has stated that “Mr. Turnbull used the newly launched app of On-Market Bookbuild (an online platform which allows retail investors to make live bids for companies raising equity) for demonstration purposes, to bid for shares in the Bitcoin Group IPO on behalf of Mr. Ben Bucknell.”

Bitcoin Group statement unequivocally states that Turnbull did not personally buy or bid for shares in the Bitcoin Group IPO and stated that the company retracts any suggestions that Mr. Turnbull personally invested in the Bitcoin Group IPO.

These corrective statements were issued after the company’s engagement with the ASIC and to set the record straight once for all.


Bitcoin mining has become a costly affair. Unlike the initial days bitcoin mining now requires specialized hardware with lots of processing power, which has made individual mining highly uneconomical.

As we know, most of the bitcoin mining is carried out by big mining companies with dedicated data centres running high powered bitcoin mining application specific integrated circuits (ASICs). Few cloud mining companies like Hashnet and ZenMiner had earlier offered options of individual users to buy hashrate and gain returns, proportional to their contribution of processing power to the mining pool. However, this model has failed to catch people’s attention especially after few companies suddenly shut shop in the past.

Individual bitcoin enthusiasts don’t despair, as there is still hope for you to be involved in bitcoin mining (either directly or indirectly). BITMIN, is a bitcoin mining project initiated by Sathes Kumar, a Chennai, India based techie. The BITMIN project involves setting up a high powered bitcoin mining setup with the help of funds raised from individuals over a crowdfunding campaign.

According to press release and other available reports, the BITMIN pool mining initiative is different from other pool mining concepts in terms of investment and returns mode. Conventional bitcoin pool mining model involves miners receiving bitcoin returns depending up the amount of processing power they have contributed to the mining operation. However, with BITMIN, pool miners will be receiving returns in the form of mined bitcoin proportional to their monetary contribution for which they will receive shares.

BITMIN project is currently a two member team who have recently created a fundraising campaign over Indiegogo a well-known crowdfunding platform. BITMIN is looking to raise $50,000 in the first round of crowdfunding campaign. Money raised from this round will be used to build mining rig of 50 TH/s capacity. As it grows, they plan to increase capacity gradually.

According to the timeline available on BITMIN’s Indiegogo campaign page, initial BITMIN setup and testing phase is completed. We can expect BITMIN to hit full potential by the end of this year.