Yang Zuoxing, a former chip designer for Bitmain, is taking the leading manufacturer of ASIC chips head-on with his company’s own line of mining chips.
Watch out for MicroBT
An ex-employee of the mining equipment giant Bitmain, Yang Zuoxing, is toiling hard to give his ex-employer a tough fight. Yang claims to have developed the much in demand ASIC chip for Bitmain.
After spending 15 months at Bitmain, Yang quit in June 2016 to establish his start-up MicroBT. The firm manufactures microchips for cryptocurrency mining. Yang had completed his Ph.D. in mechatronics from Tsinghua in 2001. He worked with various firms on hardware and low-wattage chip designs before he started working on crypto mining chips.
Claiming that his mining gear is just as good as Bitmain’s, Yang says, “We compete in every area.”
Fallout over Demand for a Stake
What led to 45-year old Yang’s exit was his demand for a stake in the company. According to him, Jihan Wu and Micree Zhan, the co-founders of Bitmain, turned down his request. A month later he started MicroBT.
Yang managed to raise $22 Million in funding from individual investors and is in negotiations with venture capital firms in China to raise additional funds. He is also considering filing for an IPO (Initial Public Offering) next year.
The MicroBT team is putting in a lot of effort to compete in a market which is expected to grow fivefold to $17 billion by 2022, according to estimates by Frost & Sullivan, a growth consulting firm.
In 2017, Bitmain controlled 75% market share, but with new competitors like MicroBT jumping into the market with their own products, the company will find it hard to maintain dominance.
Yang argues that unlike Bitmain, which is a vocal proponent of Bitcoin Cash and reportedly a major holder, his company has no involvement with the cryptocurrency, whose price has tumbled by 88% from its all-time high. Bitmain filed a preliminary listing application for its IPO in Hong Kong earlier last month, disclosing a $103 million impairment of its digital assets in the first half of 2018. The firm did not provide a break up of its crypto holdings.
According to Mark Li, an analyst with Sanford C. Bernstein, a sign that Bitmain’s lead may not last long and that competitors are catching up is the fact that Bitmain took a $253 million write-down on unsold inventory during the same time period.
“MicroBT’s flagship Whatsminer M10 can deliver better power efficiency than Bitmain’s S9i,” Yang said, adding that “MicroBT is working on upgrades to stay competitive as Bitmain rolls out new products.”
“Their technology is great,’’ Yang concluded, “But ours is too.”
As the cryptocurrency mining industry grows over the next few years, new start-ups are emerging with better technologies. Bitmain will find it hard to maintain its monopoly and the dominant position unless it keeps innovating consistently.
Do you think firms like MicroBT will be able to challenge Bitmain in the next few years? Let us know in the comments below.
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