Crypto News & Analysis
Bitmain’s co-founder Jihan Wu has been removed from the director’s chair at Bitmain. It has been reported that Mr. Wu has been demoted to the position of supervisor and no longer has the authority to manage the day to day affairs of Bitmain. An unnamed source from Bitmain disclosed the functions and details of Mr Wu’s new role within the company. The source describes Mr. Wu’s demotion as follows,
“After changing to a supervisor, there are no voting rights, so (Mr. Wu’s) power is smaller and [he] cannot participate in the business decision-making of the enterprise.” – CoinTelegraph
The 21st Money Team has been monitoring the events surrounding Bitmain closely. It appears as though many bad decisions were made at the executive level. Mistakes that could result in Bitmain’s shareholders missing out on substantial gains from an initial public offering of the company. Unfortunately for the company’s stockholders, Bitmain may no longer be able to boast that they control more than 50% of Bitcoin’s hash-rate.
One of the key issues that hindered the IPO sale was the creation of a competitor, Bitewei. Bitewei has the capacity to manufacture an Application Specific Integrated Circuit (ASIC) mining rig cheaper and more efficient than Bitmain, the Whatsminer M10. This new state of the art miner is able to utilize 7nm technology within their (ASIC) machines. Bitewei was founded by Yang Zuoxing, the former director of design at Bitmain. Bitmain, under the leadership of Mr. Wu, was unable to keep Mr. Zuoxing as a satisfied employee at Bitmain. So the computer design genius took his skills and formed his own company Bitewei, days before the proposed IPO sale.
- Bitmain has announced they can produce a miner that utilizes 7nm technology, but it is not yet available for sale, and the Whatsminer M10 is.
- The Bitcoin mining reward will be cut in half in May of 2020, making hashrate computing power a key point in selling ASIC miners.
- One of Bitmain’s chip suppliers from Taiwan lowered their earnings estimate for 2018.
- When the quarterly reports, generated during the 3rd quarter of the financial calendar, are dissected by potential investors, they may not provide or support the revenue growth indications Bitmain needed to pull of a US $2 billion IPO.
The mismanagement at the top of the company may be considered a cause of the uncertainty surrounding Bitmain’s future. The perfect storm that was brewing within Bitmain can almost be compared to the Titanic going full speed ahead towards that fateful unseen iceberg. Only this time the fellow officers may have been wise enough to relieve the captain of his duty, and slow the ship down, before they hit the iceberg. Can Bitmain’s new crew bring the company back to its former glory? Can the IPO be salvaged? Will the current stockholders still make the fortune that was on the table for them only a few weeks ago? It’s a waiting game now as the players involved, Canaan, Ebang, Bitewei, and Bitmain, jockey for the position of premier ASIC Miner manufacturer. The 21st Money Team will keep you informed as Bitmain attempts to salvage their IPO.