Bitmain Reflects on Its 2018 Accomplishments

Siamak Masnavi

On Monday (Jan 21st), Beijing-headquartered Chinese crypto mining giant Bitmain Technologies ("Bitmain"), which by most accounts had quite a difficult 2018 due to falling cryptocurrency prices, outlined its achievements in the previous year.

This article looks at some of the highlights from Bitmain's report.

7nm ASIC chip for SHA-256 mining

This ASIC chip (which "integrates over 1 billion transistors per unit") was used in Bitmain's two latest products, the Antminer S15 and the Antminer T15, which were launched on 28 November 2018. The Antminer S15, which costs $1,249 has a "high-performance mode can achieve a hash rate of 28 TH/s with a power efficiency as low as 57 J/TH," while the Antminer T15, which costs $840, has a "high-performance mode sees a hash rate of 23 TH/s and a power efficiency as low as 67 J/TH."

Bitmain says that this chip "provides significant improvements in terms of performance, power consumption and delivering outstanding performance."

AI Division ("Sophon")

According to Allen Tang, Bitmain's AI Product Marketing Director, who was interviewed in March 2018 by TechNode, "Bitmain’s foray into AI started in 2015, long before China’s regulators started viewing cryptocurrencies with suspicion," and its AI chip division Sophon was "named after the alien technology in Liu Cixin’s sci-fi trilogy The Three Body Problem."

Bitmain says that in Q1 2018, it released the "Tensor Computing Processor BM1682", its 2nd generation tensor processing unit (TPU) for deep learning, which has a peak performance of 3 TFLOPS FP32. This was followed by the "Edge TPU BM1880", which is " SoC ASIC chip for Deep Learning inference acceleration focusing on edge applications." 

Bitmain says that it "also launched edge computing boards and USB modules" to support the BM1880," and that Sophon-powered products "can recognize faces, objects, license plates and even fingerprints, whilst providing AI level security."

Expanding Operations in the U.S.

On 6 August 2018, Bitmain announced "the launch of its new blockchain data center in the city of Rockdale, Milam County, Texas". At the time, Bitmain said that it was expecting this new facility to "initiate operations in early 2019 and be fully operational in about 2 years, bringing 400 new jobs."

However, on January 10th, Texas Public Radio reported that Bitmain had "suspended its operations in Rockdale, east of Austin." According to this report, Milam County Judge Steve Young had this to say:

“I’m really disappointed because we had advertised this. We had waited for this. We had wanted this. We had welcomed this. This was huge, we need some positive news here. We need some jobs here. We need tax base here and this was a step in the right direction.”

Bitmain says that it also opened another Bitcoin mining facility in November in the state of Washington. A report by Bitsonline says that this facility has "8,100 Antminers and 12 megawatts of power capacity."

Featured Image Credit: Photo via Pexels.com

 

How Bakkt Can Bring the Crypto Space an Institutional Investor Influx

Cryptocurrency enthusiasts have for years been waiting for institutional investors to enter the space. While the introduction of bitcoin futures contracts on regulated exchanges in late 2017 didn’t gain a lot of traction, but Bakkt may.

Bakkt is a long-awaited bitcoin futures exchange and on-boarding platform from the Intercontinental Exchange (ICE) - the parent company of the New York Stock Exchange – and it’s set to launch this year. Bakkt itself has remained tight-lipped over the precise launch date after delaying its launch last year, with ICE CEO Jeff Sprecher in February simply saying “later this year.”

It’s possible that this quarter may see the launch or at least more news about when the exchange is finally coming. At the end of March, Bakkt CEO Kelly Loeffler explained:

While we’re not yet able to provide a launch date, we’re making solid progress in bringing the first physical delivery price discovery contracts for bitcoin to the U.S.

Bakkt’s launch could be a major milestone for the cryptoasset industry. A venture backed by Microsoft and Starbucks, its institutional pedigree alone will switch many cautious investors on. Specifically, the firm is set to help consumers pay for goods and services with cryptocurrencies, with Starbucks being the flagship retailer in its arsenal.

Bakkt’s Bitcoin futures contracts will be the first physically-settled derivatives on a regulated trading platform. This means investors will receive the contract’s underlying asset, bitcoin, when it expires.

Currently the Chicago Mercantile Exchange (CME) offers cash-settled bitcoin futures contracts, meaning investors get the equivalent of BTC’s value in fiat when the contracts expire. This is seen by some as a major development in the cryptocurrency space, as it shows traditional finance is willing to interact with the nascent cryptoasset industry.

It’s worth noting that earlier this year the ICE’s CEO called Bakkt a “bit of a moonshot bet,”  as it was organized in a way “very different than the way ICE typically does business.” The firm has its own offices and management team, and could undergo more rounds of financing in the future.

Bakkt And a Potential Bitcoin ETF

What’s significant about Bakkt’s launch beyond this, is that it may bolster the chances of a Bitcoin Exchange-Traded fund (ETF) being approved. Such a product would make it easier for institutional investors to gain exposure to cryptocurrencies.

In August, the US Securities and Exchange Commission (SEC) rejected nine other ETF applications, in particular highlighting how those applying hadn’t provided evidence that “bitcoin futures markets are of significant size’” for an ETF to be launched.

Once Bakkt is launched its trading volumes may very well help quell the SEC’s concerns over the bitcoin futures markets’ small size as institutions and other investors may feel comfortable entering it. Larger futures contracts trading volume, increased liquidity and a well-established company involved may prove enough to convince the SEC that the time is right for a Bitcoin ETF.

Bakkt therefore represents a very significant milestone for a maturing cryptoasset industry and may well herald the “institutional influx” that many have been anticipating since 2017. Despite the markets remaining relatively flat throughout 2019 these looming decisions in the U.S. have the power to move the entire industry forward, for better or worse.