Former Bitmain Employees May Find Refuge in a Spinoff Startup Called Matrix

The Bitmain branch Copernicus was known for creating a Golang-based Bitcoin Cash (BCH) full node implementation with the same name. Last year …

According to regional reports, members of Bitmain Technologies and other connected subsidiaries like Copernicus are starting an offshoot company called Matrix. It is not officially known yet just what Matrix will do but some sources allege that the new spinoff will offer cryptocurrency lending services, an over-the-counter (OTC) desk, and custody solutions.

Also read: Survey Shows Consumers and Investors Remain Bullish on the Future of Cryptos

Former Bitmain Employees and Copernicus Members Possibly Forming a Startup Called Matrix

There’s been a lot of changes within the cryptocurrency industry and one of the world’s largest mining manufacturers, Bitmain, has seen its share. Reports have detailed that the falling cryptocurrency economy has caused the company to lay off certain members of the team and close down offices in Israel and Amsterdam. On Jan. 10, news.Bitcoin.com reported on Bitmain’s director of product engineering, Haichao Wang, apparently taking the lead role with the mining corporation in place of Jihan Wu. Now a few different reports from local sources and people familiar with the matter suggest that Wu and a bunch of other Bitmain staffers are forming a new startup called Matrix.

Former Bitmain Employees May Find Refuge in a Spinoff Startup Called Matrix
Bitmain’s Israel office was closed earlier this year.

Chinese news outlet All Weather Tmt (AWT) details that Matrix may be led by Bitmain’s Ge Yuezhen and former members of Copernicus. The regional publication details that Jihan Wu will be working on the project as well. The Bitmain branch Copernicus was known for creating a Golang-based Bitcoin Cash (BCH) full node implementation with the same name. Last year, miners using the Copernicus software also managed to mine the first BCH block with an alternative full node protocol designed with the Golang programming language. Allegedly Bitmain’s senior investment director Ge Yuezhen will be the new company’s chief executive officer.

Former Bitmain Employees

Lending, OTC, and Custody Services

The publication additionally details that there have been internal arguments concerning two technologies Bitmain has been pursuing — artificial intelligence (AI) and blockchain technology. AWT explains that senior Bitmain executives disagree on the future of both technologies and which one will be the best choice for the firm going forward. According to the publication, Jihan Wu is responsible for BCH business, blockchain projects, and the mining pool. Meanwhile, Micree Zhan reportedly oversees the AI chip operations, mining semiconductors, and some mining facilities. Furthermore, news outlets Caijing and South China Morning Post reported that Wu was leaving Bitmain but AWT says that information is false. “Wu’s departure from Bitmain is purely a rumor,” the report emphasized but added Wu will superintend the Matrix project from the sidelines.

Another source explains on March 7 that the new business spinoff will offer over-the-counter cryptocurrency services. Furthermore, journalist Wolfie Zhao revealed that two individuals close to the startup remarked that the Bitmain offshoot will also handle crypto lending and custody services. The report also details that there were “two camps inside Bitmain,” each aligned with different cofounders, further confirming AWT’s report on the disagreements.

Former Bitmain Employees
Bitmain’s artificial intelligence (AI) chipsets called Sophon.

Over the last year, there have been lots of stories surrounding Bitmain as it made significant profits in 2017 pulling in an estimated $4 billion in revenue. Then the company filed for an initial public offering (IPO) in Hong Kong. However, 2018 was a severe downward spiral for the entire industry and, being one of the most successful cryptocurrency firms the year before, Bitmain was hit with an onslaught of bad press. The trend of Bitmain-related headlines continued through the BCH blockchain split in November and into the new year. Whether it’s positive or negative news, it could be argued that the Chinese mining giant receives a lot more press than most companies in the industry. The Matrix spinoff news has added one more unconfirmed tale from sources claiming to be close to the action.

What do you think about Bitmain possibly creating an offshoot startup called Matrix? Let us know what you think about this subject in the comments section below.


Image credits: Shutterstock, Pixabay, and Bitmain.


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Jamie Redman

Jamie Redman is a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open source code, and decentralized applications. Redman has written thousands of articles for news.Bitcoin.com about the disruptive protocols emerging today.

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Bitmain Unveils New 7nm ASIC Chip After Dismal 2018

Bitmain says its new class of 7-nm chips is designed for cryptocurrencies like Bitcoin and Bitcoin Cash that use the SHA256 Proof-of-Work (PoW) …

Bitmain Technologies has announced a new iteration of its 7-nanometer Bitcoin mining chip. The cryptocurrency mining hardware behemoth says the new and improved 7-nm chip offers greater energy efficiency for mining operations.


More Energy Efficient Bitcoin Mining

The company announced the news in a blog post published on Monday (February 18, 2019), on its official blog. According to the statement, the new BM1397 chip offers faster and cheaper cryptocurrency mining.

Taiwan Semiconductor Manufacturing Company (TSMC), Bitmain’s chip supplying contractor, manufactured the chip using the former’s 7nm FinFET process. Bitmain says its new class of 7-nm chips is designed for cryptocurrencies like Bitcoin and Bitcoin Cash that use the SHA256 Proof-of-Work (PoW) mining algorithm.

According to the company, the new mining processor provides significant improvements in power efficiency from the earlier 7-nm chips released in November 2018. An excerpt of the announcement reads:

The new BM1397 chip requires lower power and can offer an energy consumption to computing ratio as low as 30J/TH. This is a 28.6 percent improvement in power efficiency in comparison with Bitmain’s previous 7nm chip, the BM1391.

The post also revealed that new upgraded 7-nm chips would come as part of the proposed S17 and T17 Antminer models. Bitmain is yet to disclose any timetable for when these new miners will be ready for release.

Difficult 2018 for Bitmain

Bitmain will be hoping that the launch of a new mining processor will spark efforts to improve the company’s fortunes following a tumultuous 2018. A wrong bet on Bitcoin Cash saw the company reportedly incur losses more than $740 million in Q3 2018 alone.

In Q4 2018, the mining behemoth also significantly reduced its staff strength laying off entire departments. First, the company fired its Israeli-based R&D department before laying off its Bitcoin Cash development team.

Co-founders Jihan Wu and Ketuan Zhan also faced the ax, as reports emerged that the company was shopping for a new CEO.

Bitmain’s IPO plans was also another victim of the company’s difficult 2018. At the start of the year, Bitcoinistreported that Bitmain’s proposed mega mining facility in Texas was being put on hold.

Do you expect Bitmain will be able to turn the tide around in their finances in 2019? Let us know your thoughts in the comments below.


Image courtesy of Shutterstock, bitmain

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Bitmain Puts Its Mega Mining Facility Project in Texas on Ice

Since December 2018, Bitmain has fired employees in both its R&D and Bitcoin Cash development department. Reports indicate that its bet on Bitcoin …
Texas BitmainNews

Osato Avan-Nomayo · @3rdPesinSingula| Jan 11, 2019 | 15:00


Bitmain Technologies is shelving its plans to create a mega Bitcoin mining facility in Rockdale, Texas. The news comes as the Bitcoin mining behemoth continues to downsize both the scale of its operations as well as its staff numbers.


$500 Million Bitcoin Mining Project on Hold

According to Texas Public Radio (TPR), Bitmain his suspending its plans to build a $500 million crypto mining and data center in Rockdale. Commenting on the news, Steve Young, the Milam County Judge, said:

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

Back in mid-2018, the company announced plans to build one of the largest Bitcoin mining centers in North America. At the time, Bitmain said the facility situated on the Alcoa aluminum smelting site would commence operations in 2019, providing as many as 500 jobs.

For Young, the news is yet another blow to the local economy of a place struggling to attract investments. Dave Barkemeyer, a former Milam County Judge, says the county has lost about 30 percent of its tax revenue in the last ten years.

Massive Downsizing of Operations

As at press time, Bitmain is yet to issue any official word on the matter. However, a spokesperson for the company intimated that Bitmain was in the process of downsizing its operations across the United States. In an email reportedly sent to Young, the spokesperson said:

The right-sized team at Rockdale now has the expertise to re-start the project at small scale anytime. Bitmain would like to ramp up the site at a slower pace and scale based on market conditions.

According to Young, Bitmain had already made some significant progress on the facility with as many as 8,000 servers running into millions of dollars already on site.

Meanwhile, the company continues to make the rounds on the cryptocurrency news circuit with reports of retrenchments across various departments. On Thursday, Bitcoinistreported that the company will be getting a new CEO as the co-founders step down from administrative duties.

Bitmain losing dominance = more decentralisation

– Laying off 50% staff (reported)

– Mining pool dominance down 28% in last 6 months

– Poor bet on BCH at the cost of losing BTC

– Lost key chip designer

– ASICs losing competitive edge

– Growing competition (Canaan, Halong, Ebang)

— Misir Mahmudov (@misir_mahmudov) January 8, 2019

Since December 2018, Bitmain has fired employees in both its R&D and Bitcoin Cash development department. Reports indicate that its bet on Bitcoin Cash 00 which backfired coupled with the massive decline in cryptocurrency prices saw the company record losses north of $700 million in Q3 2018 alone.

Consequently, Bitmain, once the undisputed giant in Bitcoin mining arena is slowing having its monopoly eroded. Back in mid-2018, the company’s mining pools; BTC.com and AntPool were approaching nearly 51 percent control of total BTC mining hashrate. Presently, both pools account for 24 percent.

Will the current situation with Bitmain lead to a less monopolized Bitcoin mining arena? Let us know your thoughts in the comments below.


Image courtesy of Twitter (@misir_mahmudov), Shutterstock

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Bitmain Replaces CEO Jihan Wu After Bitcoin Cash Gamble Fails

Wu, in particular, has come under intense criticism for the company’s bet on Bitcoin Cash. Zhan, on the other hand, has led Bitmain’s diversification …
Bitmain WoesNews

Osato Avan-Nomayo · @3rdPesinSingula| Jan 10, 2019 | 08:00


Inside sources say that Bitmain Technologies plans to name a replacement CEO to take over from co-founders Jihan Wu and Ketuan Zhan.


New Bitmain CEO

According to the South China Morning Post (SCMP), the Bitcoin mining behemoth is looking to name a new CEO to replace the company’s co-founders. Anonymous sources say, Haichao Wang, the current Engineering Director is the front-runner for the job.

Jihan Wu

While there is no official word from Bitmain, these sources say the company entered a leadership transition period in December 2018.

Back in November 2018, Bitcoinistreported Wu’s demotion from director to a supervisor. Also, in late December 2018, reports broke out in Chinese media of the imminent resignation of both Wu and Zhan.

There is also no definite timetable for the completion of the leadership reshuffle. Sources indicate that both Wu and Zhan will become co-chairs of the company. The new CEO will handle the daily administration of the firm while the pair will still have the final say on big decisions.

According to SCMP sources, both Wu and Zhan had disagreements as co-CEO. Wu, in particular, has come under intense criticism for the company’s bet on Bitcoin Cash. Zhan, on the other hand, has led Bitmain’s diversification efforts, especially into the artificial intelligence arena.

Turning the Tide

If the reports are accurate and Bitmain does get a new CEO, a daunting task awaits the selected individual. After a stellar 2017 and a promising start to 2018, the second half of the year appeared to fizzle out for the Bitcoin mining behemoth.

Bitmain is yet to release its Q3 2018 financial report, but speculation is rife of losses north of $740 million. A lot of the financial trouble stems from inventory losses, as well as the expensive Bitcoin Cash hash war of November 2018.

Recently, the company even began laying off a significant portion of its workforce. In December 2018, Bitmain fired its R&D department based in Israel. This move was followed by another massive downsizing, nixing the company’s Bitcoin Cash development team.

The company’s IPO plan is also another casualty of the financial turmoil within the company. Despite announcing plans for an IPO listing in Hong Kong earlier in 2018, all signs point to such plans being unfeasible, for the present time, at least.

Will a new CEO be able to steer Bitmain in a better direction? Let us know your thoughts in the comments below.


Image courtesy of Shutterstock

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Bitmain Lowers Profit Figures in IPO Filing

… profit figure was $1.25 billion in the documents prepared ahead of Bitmain’s $400m Series B fundraising, that was lead by Sequoia Capital China.

The profits of the China-based Bitmain Technologies group may be substantially lower than the initial estimates provided in the documents related to early-stage funding rounds, The Financial Times reports.

The upcoming IPO

Bitmain, the world’s largest manufacturer of cryptocurrency mining equipment, applied for an initial public offering on the Hong Kong Stock Exchange ( HKEX) in September 2018, with the stated aim of raising as much as $18 billion. However, 2017 net profit figures provided by the company ahead of different rounds of financing differ substantially with the apparent downward trend.

The 2017 net profit figure was $1.25 billion in the documents prepared ahead of Bitmain’s $400m Series B fundraising, that was lead by Sequoia Capital China. In August 2018 round, the profit was reduced to $1.1 billion, while in the most recent IPO prospectus, Bitmain reduced its net profits for 2017 to $701.4 million.

Dim future

While both the company’s/ press-service and the auditors failed to explain the discrepancies on the request submitted by the Financial Times, investors expressed divergent opinions about the profit figures and the Bitmain’s future in general.

“The differing figures show that management doesn’t know how to communicate with the capital markets. It just shows that they are not sophisticated enough and maybe too aggressive,” a China-based investor commented.

Most experts believe that the success of the company hinges on its ability to outgrow its current status as a chip manufacturer for cryptocurrency mining, which is regarded as a speculative business with little-to-no intrinsic value.

Cryptocurrency assets value

As Bitmain accepts payments for its equipment cryptocurrencies, the digital coins represent a significant share of the company’s assets – 28% according to the IPO prospectus. However, it is not clear how to assess the value of these holdings considering the volatile nature of the cryptocurrency market.

At the end of June, Bitmain stated that its crypto holdings made of Bitcoin, Bitcoin Cash and Ethereum were worth $886.9 million. But the industry experts, including David Vorick, of Siacoin, are skeptical about it, saying that the estimate is overly optimistic.

Along with vague profit numbers, this casts some doubt on the fairness of the company’s valuation and on its perspectives to hit its fundraising targets.