Wall Street Analyst Claims Bitmain Developed An ASIC To Mine Ethereum

  • A Wall Street analyst recently claimed Bitmain developed an ASIC to mine Ethereum. He added that three other firms are developing ASICs for the cryptocurrency
  • This type of competition saw him alter his AMd and Nvidia stock price predictions

Wall Street firm Susquehanna recently reduced its price targets for leading GPU makers AMD and Nvidia, claiming they’ll now have to compete with mining hardware giant Bitmain when it comes to cryptocurrency mining, as the company developed Ethereum ASIC miners.

In a note sent to Susquehanna’s clients, analyst Christopher Rolland revealed the China-based hardware manufacturer, a market leader when it comes to Application Specific Integrated Circuit (ASIC) chips, is going to start shipping out Ethereum ASIC miners in the second quarter of this year.

According to CNBC, he said:

"During our travels through Asia last week, we confirmed that Bitmain has already developed an ASIC [application-specific integrated circuit] for mining Ethereum, and is readying the supply chain for shipments in 2Q18.”

Christopher Rolland

He further revealed that while Bitmain is the largest ASIC vendor, currently selling 70 to 80 percent of Bitcoin mining ASICs, and the first to market these chips, three other companies are working on Ethereum ASICs.

So far, Ethereum’s hashing algorithm Ethash has been ASIC-resistant, allowing miners to make a profit using general purpose GPU chips commonly used for gaming and looking for aliens. ASIC chips are extremely efficient at mining cryptocurrencies, but are useful for little else.

Rolland lowered his stock price targets for GPU makers Nvidia and AMD as he believes ASICs will hurt demand for these chips, which will in turn hurt their business. He estimates Ethereum mining-related sales account for 20 percent of AMD’s sales, and 10 percent of Nvidia’s revenue.

Even if miners stop buying GPUs to mine Ethereum, it’ll still be profitable to buy them to mine other cryptocurrencies. One example would be Monero (XMR), which recently went to “war” against ASICs through an emergency software update that “lightly changes the proof-of-work algorithm to prevent DoS attacks by ASICs.”

Nevertheless, Susquehanna reduced his price target for AMD’s shares from $13 to $7.5, and reduce his forecast for Nvidia from $215 to $200. Per the analyst, Nvidia has a “stronger and more durable gaming franchise which would could help it work through this potential Ethereum-related unwind.”

Last year, Bitmain reportedly made as much revenue as Nvidia. The company’s revenue, analysts estimate, is generated by selling ASICs. The company may be expanding by developing operations in the US

Coinbase Commerce Now Lets Merchants Accept USD Coin (USDC)

On Monday (May 20), Coinbase announced that "Coinbase Commerce", which provides non-custodial cryptocurrency payment solutions, now allows businesses to accept fully dollar-collateralized stablecoin USDC.

History of USDC

As CryptoGlobe reported on 26 September 2018, "USDC Coin" (USDC for short) was launched on that day by Goldman-funded FinTech startup Circle Internet Financial (better known as "Circle"). This is a regulated fully-collateralized dollar-backed stablecoin that was originally announced on 16 May 2018. USDC is based on an open source fiat stablecoin framework developed and governed by the CENTRE project.

Circle said at the time that the problems with existing fiat-backed solutions (such as Tether's USDT) were that they "have lacked financial and operational transparency, have operated in unregulated jurisdictions with unknown banking and audit partners, and have been built as closed-loop ecosystems and closed proprietary technologies."

In contrast, Circle's USDC stablecoin deals with these issues by "providing detailed financial and operational transparency" and "operating within the regulated framework of US money transmission laws, reinforced by established banking partners and auditors." USDC tokens are ERC-20 compatible (meaning that they run on the Ethereum blockchain); they are minted, issued, and burnt/redeemed based on network rules defined by CENTRE. 

Coinbase's Previous Involvement With USDC

On 23 October 2018, Circle announced that Coinbase (another member of the CENTRE consortium) was making USDC available to its customers on Coinbase Consumer and Coinbase Pro, and that customers could "tokenize dollars into USDC and redeem USDC into dollars through both Circle and Coinbase."

Then, on May 14, Coinbase said via a blog post titled "Expanding USDC crypto trading globally" that:

  • It was making USDC trading available on Coinbase Consumer and Coinbase Pro in 85 countries.

  • It was doing this to help "accelerate the global adoption of crypto trading" and to provide wider access to "a stable store of value."

  • There are more than 300 million USDC tokens currently in circulation today, and that USDC is supported by 100+ ecosystem partners.

  • Stablecoins "have the potential to materially improve the lives of people in countries where inflation is eroding wealth." 

  • Coinbase serves customers in 103 jurisdictions.

Coinbase Commerce and USDC

Coinbase Commerce was launched on 14 February 2018. Coinbase described Coinbase Commerce as a new service that "enables merchants to accept multiple cryptocurrencies directly into a user-controlled wallet," and that in contrast to its previous merchant products, it was "not a hosted service, so merchants have full control of their own digital currency." Four cryptocurrencies were supported back then: Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Litecoin (LTC).

Coinbase Commerce can be "directly integrated into a merchant’s checkout flow or added as a payment option on an e-commerce platform." Initially, the only e-commerce platform supported was Shopify, but on 6 August 2018, support for WooCommerce was added.

Yesterday's blog post said that now Coinbase Commerce has added support for stablecoin USDC, thereby allowing "businesses to accept payments online in the same way they’re able to accept cash in-store." 

Here are a few things to note about Coinbase Commerce:

  • "Coinbase Commerce doesn’t charge any fees to process payments."
  • "Coinbase Commerce accounts are completely separate from Coinbase accounts."
  • "You can use the withdraw functionality to send cryptocurrency to an address associated with your Coinbase account."

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