Bitmain Hardest Hit ASIC Producer In China-U.S. Trade War

The U.S.-China trade war could begin taking casualties in the cryptoasset industry, as a change in the U.S. classification of application specific integrated circuit (ASIC) miners could increase tariffs significantly for Chinese producers.

The South China Morning Post (SCMP) has reported that a change on August 28 of the classification of ASICs could hike import duties on ASIC miners from 2% to 27%. Hopes have recently been doused that cooler heads would prevail in the largely Trump-initiated conflict, which has flouted previous conventions of addressing trade grievances through the World Trade Organization (WTO).

Bitmain could be the worst hit of Chinese producers, as it has the highest proportion of foreign exports. Bitmain’s IPO filing, released last month, revealed that 62.8% of the Beijing-based company’s total revenue during the first half of 2018 came from overseas sales - although this data did not specify how much came from U.S. sales specifically. The vast majority of Bitmain’s revenue comes from ASIC production, about 94%.

The SCMP reports that Bitmain competitors Canaan and Ebang have drastically lower overseas sales proportions, suggesting they will be less vulnerable to tariffs.

Bitmain is well aware of the risks to its business model entailed by overseas sales, citing specifically in its IPO filing “governmental policies favoring domestic companies in certain foreign markets or trade barriers including export requirements, tariffs, taxes and other restrictions and charges”, in particular “the worldwide populism trend that call [sic] for protectionism trade policy and potential international trade disputes”.

This new threat to Bitmain’s business model comes at a bad time for the compnay. Details revealed in the IPO filing showed that the company’s profits fell precipitously in Q2, along with the general tumble in cryptoasset prices since January. Depite an impressive $1.1 billion profit in Q1, Q2 turned a loss of around $400 million.

Many have speculated that the IPO is an emergency measure to plug hemorrhaging profits, amid falling cryptoasset prices and increasing competition.

Jihan Wu, one of Bitmain’s founders, has been a well known supporter of the Bitcoin fork, Bitcoin Cash. The fact that the company holds a significant quantity of the altcoin has been seen by some as a liability.

Zcash 'Company' Changes Name to 'Zerocoin Electric Coin Company' for More 'Clarity'

The Zcash company, which supports the ongoing development of the Zcash (ZEC) platform, a leading privacy-oriented cryptocurrency, has rebranded to the Electric Coin Company.

According to an official company blog post, the name change from “Zcash company” to “Electric Coin Company” was made in order to have more clarity. Explaining that the “legal name” for the firm was always “the Zerocoin Electric Coin Company, LLC”, the organization clarified that it had been referring to itself as “the Zcash company.”

However, the company’s blog noted that the development of “Zcash” is a community-based project and that some of the privacy coin’s business-related initiatives may involve the Zerocoin Electric Coin commercial entity. Moreover, Zerocoin’s operations are not directly associated with the Zcash Foundation - which in itself is a “separate and independent” organization, according to the blog post. Notably, the Zcash Foundation has “its own mission, team, and board of directors.”

Rebranding Process: New Domain, Change Office Sign

Acknowledging that it will take the company “a little while to get the new branding right, launch a new domain, and change out the sign at the office”, the company blog mentioned that “the name change is public.” Except for the name change, the entity associated with Zcash explained: 

We are the same team, with the same mission: to empower everyone with economic freedom and opportunity. We developed and help steward Zcash.

Zerocoin's Research & Engineering Projects May Not Be Integrated Into Zcash 

Notably, the Electric Coin Company is currently working on “research and engineering [projects] that may, or may not” be integrated into the Zcash codebase, the blog noted. At present, the Electric Coin team consists of around 30 professionals from across the globe that are involved in the following initiatives:

  • “Product Development and Support”,
  • “Builds Zcash software”,
  • “Participates in cryptographic research”,
  • “Works with third parties to perform regular security audits of Zcash”,
  • “Improves the safety and security of the Zcash network”,
  • “Works on the Zcash user experience, such as the reference wallet” 

Company Website, Social Media Accounts To Be Changed/Updated Soon

In addition to working collaboratively on the initiatives listed above, the Electric Coin company helps in “translating content into different languages”, creates "educational content”, and supports the overall development of the Zcash platform.

As mentioned in the company’s announcement, the Electric Coin company “information will be moved from to a new domain with its own website.” Social media accounts associated with the company will also be updated.