Meet the players in the BCH Market Manipulation Lawsuit

On Thursday, a lawsuit was filed in Florida’s Southern District against a group of cryptocurrency heavyweights alleging intentional fraud and market manipulation surrounding the recent Bitcoin Cash BCH update.

The civil suit filed by United American Corp. against multiple Bitmain related companies, Bitcoin.com, Roger Ver, Jihan Wu, Kraken, Jesse Powell, Amaury Sechet, Shammah Chancellor and Jason Cox alleges the group was involved in a scheme to manipulate the cryptocurrency market for Bitcoin Cash in an effort to highjack the Bitcoin Cash network, resulting in a global capital meltdown of more than $4 billion and causing countless people irreparable harm.

Breaking News: Lawsuit links Bitmain, Ver camp to ‘premeditated takeover’ of Bitcoin Cash network

Some of the names are well known to the Bitcoin community while others have been background players. Let’s have a look at the who’s who in this landmark cryptocurrency lawsuit.

Bitmain Inc. – More commonly known as Bitcoin US, Bitcoin Inc. is an American corporation wholly owned by Bitmain Technologies Holding Company. With Bitmain Inc. being a USA corporation, it will be difficult for the larger company to claim the suit doesn’t belong in American courts. 

Bitmain Technologies LTD. – Founded by Micree Zhan and Jihan Wu in 2013, Bitmain rose to prominence and then dominance in the bitcoin mining space with their ASIC cryptocurrency miners.

Bitmain Technologies Holding Company – The company filed for an initial public offering this past September 26 with the Hong Kong regulatory agency. That IPO has been in doubt of late with disastrous financials leaking and their reputation taking a beating during the hash war that triggered this lawsuit. 

Saint Bitts LLC d/b/a Bitcoin.com – Bitcoin.com is one of the more controversial websites in the cryptocurrency industry. Bitcoin.com is probably responsible for onboarding more people to Bitcoin that any other site. They offer news, tools and even online gambling but after the 2017 BTC-BCH split, and their propensity for hyping up poorly planned and executed ICOs they’ve become more divisive in the past couple years.

Read the Court Filings from the BCH Manipulation lawsuit

Roger Ver – Known as the Bitcoin Jesus due to his early wiliness to invest and travel the world spreading the gospel of Bitcoin. He’s fallen from Grace particularly after the 2017 BTC-BCH fork. Ver would debate anyone and everyone, claiming BCH was the true Bitcoin and any chain that deviates from the Satoshi Whitepaper couldn’t claim to be Bitcoin. His decision to support the ABC instance during the hash war and his penchant for putting his promotional support behind pump and dump ICOs has left many of his disciples abandoning the faith. Ver denounced his American citizenship in 2014 and was once denied a USA visa as US immigration was unsure if he’d leave the country and he’d remain as an illegal immigrant. This case should offer US immigration sufficient grounds for a visitor’s visa.

Jihan Wu – He’s the public face of the Bitmain empire. A regular on the conference circuit and recipient of the lion’s share of both the praise and the scorn from the cryptocurrency community. He was the power broker during the 2017 battle for larger blocks in BTC, his mining pools held enough power to determine whether Blockstream’s Segregated Witness and the plan to leave BTC at 1MB blocks or if the big block battle would continue. Wu negotiated a split which created Bitcoin Cash BCH and took the big block supporters with him. He also played a major role in the Hash War, funding the controversial ABC instance and then arranging the mercenary miners to move over to the BCH chain. Like Ver, the split has left his reputation in tatters. 

Payward Ventures Inc. d/b/a KrakenKraken is a cryptocurrency exchange site that was funded by Roger Ver and operated by his high school friend Jesse Powell. The site was one of the more popular exchanges operating in the US, Canada, Japan and the EU. For a couple of years, it stood as the largest exchange in the industry before giving way to companies like Coinbase and Binance. This lawsuit isn’t the first time Kraken has faced scrutiny, earlier this year they were under investigation by the New York Attorney General’s (NYAG) office who was on a fact-finding mission to see what if any measures exchanges took to protect their customers from market manipulations.

Jesse Powell – Powell, in addition to being Ver’s high school friend, is the CEO of Kraken. When the NYAG was conducting their investigation, Powell made a point not to cooperate and declared the investigation was hostile and bad for business. Unlike Ver who renounced his USA citizenship and left the country, Powell still resides in the US and could be forced to do the heavy lifting if Ver doesn’t return to answer the suit.

Amaury Sechet – Sechet is the lead developer for Bitcoin ABC and the self-proclaimed benevolent dictator of Bitcoin Cash BCH. The anarchist is a French national who is responsible for the contentious changes to the node software that ultimately caused the rift and eventual fork in the BCH chain.

Shammah Chancellor – Is a developer with Bitcoin ABC who works with Sechet.

Jason Cox – Along with Chancellor, works with Bitcoin ABC as a developer.

United American Corp. – The Florida-based company focuses on telecommunications applications, including BlockchainDomes, which are eco-friendly crypto mining facilities that use the generated heat to power green houses and grow food. In 2017, UAC moved heavily into the development and implementation of blockchain-related technologies. The company believes that the high-jacking of the Bitcoin Cash network could imperil its investments, as the changes brought by Bitmain and Ver’s group have altered the fundamental economics of the business.

The post Meet the players in the BCH Market Manipulation Lawsuit appeared first on CoinGeek.

Read More

Breaking down the United American lawsuit against Bitmain, Roger Ver, et al

The cryptocurrency world was rocked Thursday by the announcement of a huge lawsuit that was launched by United American Corp. (UAC) against a large number of Bitcoin Cash BCH supporters, including Bitmain and its co-founder Jihan Wu, Bitcoin.com founder Roger Ver, Amaury Séchet of Bitcoin ABC, the Kraken exchange and its CEO, Jesse Powell, as well as a few others. The lawsuit contends egregious amounts of fraud and market manipulation on the part of all defendants and could forever change how BCH is viewed, MarketWatch first reported.  The lawsuit and all updates will be available on the www.bitcoincashlitigation.com website.

UAC points out in its lawsuit, filed in U.S. District Court for the Southern District of Florida, that the group of individuals colluded to manipulate the BCH network and take control of its functions. The company asserts that BCH has become centralized, which violates “all accepted distributed and decentralized standards and protocols associated with Bitcoin since its inception.” The Florida-based blockchain company further asserts that Ver, Wu, et al worked in conjunction with the Chinese government in order to lead a hostile takeover of the cryptocurrency.

Breaking News: Lawsuit links Bitmain, Ver camp to ‘premeditated takeover’ of Bitcoin Cash network

The blockchain is meant to be a decentralized solution. To maintain this decentralization, the network operates on a consensus basis that prevents a single person or group from being able to control the majority of the hash, or mining power. If someone is able to control 51% of the network, they can effectively and autonomously decide the blockchain’s fate and this is what the defendants have been able to achieve.

Bitmain publicly acknowledged its support of Bitcoin ABC during the hash wars and launched efforts to force the BCH network to follow ABC during the hash wars. It rented hash power and even deployed 90,000 of its own mining rigs in favor of ABC mining operations, a move that can be seen as an attempt to centralize and control ABC. There were also speculations that Bitmain’s Jihan Wu was unloading BTC to fund the ABC mining operations, which, in turn, drove the prices of crypto down. Now, people are wondering if Wu is just cashing out amid the hash war.

Meanwhile, the U.S. Department of Justice is also allegedly looking to get involved in the case against Bitmain and Ver’s group through the FBI Cybercrimes Division.

Who are the defendants?

Roger Ver is a “crypto anarchist” and has also directed the mining operations of his Bitcoin.com mining pool to ABC. In addition,Bitcoin.com was a recipient of some of the hashing power that was rented by Bitmain in order to support ABC.

Ver has direct links to the Kraken crypto exchange through its founder, Jesse Powell. They are friends with a history that dates back to their high school days and Kraken was one of the first exchanges to show favoritism for ABC. It was also the first exchange to declare that ABC was offering the true version of BCH.

The lawsuit explains that Bitcoin ABC, the development and mining group that favored moving BCH away from its original design, has now forced changes on the blockchain without regard to what the community wanted. It introduced arbitrary checkpoints that can allow Bitcoin ABC to take over the network. UAC explains, “Combining this change with the hashing power of Bitcoin ABC backers amounts to centralization.  They will be able to override any consensus reached by the rest of the network, forcing other to conform or create an unwanted hard fork.”

UAC also asserts that the entities were fundamental in directing hash power—including through the renting of additional mining equipment—during the BCH “hash wars” this month that saw them force the direction the BCH blockchain was headed. The action resulted in an unprecedented amount of hash being processed by Bitcoin ABC backers and further disintegrated the integrity of the BCH network.

UAC has been involved in blockchain innovation since 2017 and has invested more than $4 million in the space. It argues that the selfish manipulation of the blockchain is not consistent with BCH’s design, and that it has completely altered the “fundamental economics of the business.” In simple terms, it can be viewed as ordering a Filet Mignon in a restaurant and being delivered a burnt hamburger, while still paying for the Filet Mignon.

For a deeper narrative about the scheme, visit the Bitcoin Cash Litigation website.

The full filing can be found here.

The post Breaking down the United American lawsuit against Bitmain, Roger Ver, et al appeared first on CoinGeek.

Read More

Lawsuit links Bitmain, Roger Ver group to ‘premeditated hostile takeover’ of Bitcoin Cash network

Bitmain, its co-founder Jihan Wu, along with his “team of conspirators” including Bitcoin.com CEO Roger Ver, ABC lead developer Amaury Sechet, Kraken and its CEO, Jesse Powell, will have a lot to answer for. On Thursday, a lawsuit was filed before the U.S. District Court for the Southern District of Florida accusing the group of fraud and market manipulation, asserting that these people worked “with the knowledge and support of the Chinese government to stage a premeditated hostile takeover” of the Bitcoin Cash BCH network.

Florida-based blockchain company United American Corp. (UAC) is seeking an emergency injunctive relief, citing losses that stemmed from the Bitcoin Cash hard fork last November 15. On that day, a hash war was fought with miners voting between two competing implementations of the BCH protocol—Bitcoin SV and ABC. ABC took a temporary early lead due to an artificial burst from “rented” hash power subsidized by Ver’s Bitcoin.com, and some exchanges—Kraken in particular—prematurely listed the ABC token as Bitcoin Cash BCH.

Now the other shoe has dropped.

Lawyer Brian Miller of Akerman law firm, who heads the team of lawyers that handles the UAC litigation, said there was “a scheme by a tight network of individuals and organizations designed to co-opt the cryptocurrency market for Bitcoin Cash, effectively hijacking the Bitcoin Cash network, centralizing the market and violating all accepted distributed and decentralized standards and protocols associated with Bitcoin since its inception.” The scheme, allegedly spearheaded by Bitmain and Ver’s camp, reportedly caused “a global capitalization meltdown of more than $4 billion and caused many American and Canadian coin holders to suffer financial damages.”

Also named in the UAC lawsuit were ABC developers Shammah Chancelor and Jason B. Cox.

Aside from the awarding of restitution and compensatory damages, the lawsuit also seeks to prevent ABC from continuing to implement checkpoints on the Bitcoin Cash network and other software implementations that will “prevent the resulting chains from being able to be re-merged. UAC also wants the court to require ABC “to return the blockchain to its previously decentralized form with the previous consensus rules.”

More importantly, UAC wants to prove that the ABC camp, which has “some of the biggest U.S.-based and international names and entities in the digital currency world” among its ranks, is being backed by the Chinese government, all in an effort “to centralize the Bitcoin Cash network resulting in Chinese entities now having established dominance over this important segment of the cryptocurrency market with proprietary software checkpoints and instituting other means of control over the system.”

Lawry Trevor-Deutsch, VP of Corporate Affairs for UAC, said, “We envision a future led by an open, democratic and collaborative community fostering innovation and freedom. No entity or group of entities should seek to seize control of this platform for their own narrow interests or create rules that inhibit new competition and future technological innovation. That’s what this lawsuit is about.”

Full filing can be found here.

The post Lawsuit links Bitmain, Roger Ver group to ‘premeditated hostile takeover’ of Bitcoin Cash network appeared first on CoinGeek.

Read More

Bitmain IPO reportedly in “death spiral” as losses increase

To be or not to be – that is the question. In the case of the Bitmain initial public offering (IPO), it’s looking every day that it isn’t to be. A new revelation uncovered by a Twitter user that follows the company almost religiously has shown that the once mighty cryptocurrency mining equipment manufacturer is teetering more toward crashing into the ground in a thunderous explosion.

BTCKING555 tweeted a few days ago that Bitmain’s losses in the third quarter of the year could have been as much as $740 million. If accurate, it would mark the worst quarter in the company’s history, but continues a slide that Bitmain has been experiencing since before the beginning of March.

The tweet reads, “We got leak of Bitmain Q3 numbers! COMPLETE DISASTER. The company lost $740 Million including losses on inventory and bitcoin cash! And this is not accounting for hash war costs!”

BTCKING555 alludes to possible additional losses that could top $1 billion due to Bitmain having a large investment in Bitcoin BCH. Since the digital currency’s value has been cut by more than half its recent value, Bitmain is out a substantial amount of cash.

Bitmain would have no one to blame but itself if it were to fizzle. In preparation of an IPO that was expected to launch this past September, the company falsely claimed to have received backing by a number of international companies. It also ran up substantial debt with a chip supplier – to the tune of $1 billion. It finally paid just over two-thirds of the debt, but there hasn’t been word on whether it has made good on the outstanding portion.

The company has been accused of using customer equipment for its own mining purposes. It faces a class-action lawsuit in California over the allegations, only adding to the uncertain future of its operations.

The company also presented an IPO prospectus with the Hong Kong Stock Exchange that had blatant errors. The ability of Bitmain to completely disregard regulations and present data that has been verified as false should be enough to make any investor skeptical about giving the company any money. Add this to its mounting financial issues are cringe-worthy and should not only make investors say “No, thanks,” but should make them run away screaming.

The post Bitmain IPO reportedly in “death spiral” as losses increase appeared first on CoinGeek.

Read More

Bitmain has a choice – pay up or else

Bitmain is in serious trouble. It may have been able to portray confidence, solvency and reputability, but the masks are finally starting to come off. In addition to having to answer for a number of financial irregularities ahead of its planned initial public offering (IPO), the cryptocurrency mining equipment manufacturer has already been targeted for allegedly stealing the design of a miner. Earlier this month, word got out that it is in major debt to the Taiwan Semiconductor Manufacturing Company (TSMC) and it looks like things are about to get ugly.

The truth always surfaces. It may not happen immediately, but it always will. Bitmain has been facing a number of issues since the beginning of 2018, while it maintained a smile on its face to the public the entire time. If a recent Twitter post is any indication, however, the company that once ruled the crypto mining space is literally on the verge of going bust.

According to a tweet by “BTCKING555” from yesterday, “Breaking: Our insider says Jihan is furious at BCH-SV for costing him massive in hash war. With Illiquid BCH collapsing, Jihan is running out of cash and has to pay TSMC. TSMC CFO issued ultimatum, pay or we cut you off for good! Bitmain [may be] bankrupt by year end?”

It has been reported that the majority of the assets held by Bitmain are in equipment that sits in warehouses, unable to be sold. It reportedly ran up a tab of around $1 billion with TSMC – an astounding amount of debt for a company to carry if it’s the world’s leading manufacturer of anything. After TSMC went on the offensive, Bitmain reportedly paid back $700 million and is still on the hook for the remaining $300 million.

Bitcoin BCH has plummeted in price since the hard fork. It has been previously reported that a large portion of the money Bitmain’s co-founder, Jihan Wu, had available was in the form of BCH. Now, with a drop of over 75% in value, this means that his holdings are worth over 75% less than he would like.

Whether or not the company is able to pay off its debt or go bankrupt remains to be seen. However, one thing is certain – it is nowhere near as stable as it has tried to make everyone believe.

The post Bitmain has a choice – pay up or else appeared first on Coingeek.

Read More

Bitmain facing class-action lawsuit over mining operations

Bitmain is yet again facing another bit of bad news. On top of having to deal with questions regarding its financial situation and a decline in market share, the cryptocurrency mining equipment manufacturer is facing a fresh lawsuit in California.

The class-action suit asserts that Bitmain has, for some time now, intentionally used customers’ machines for its own crypto mining purposes while the customers were still configuring their rigs. Plaintiff Gor Gevorkyan asserts, “Until approximately 2 years ago, the machines started in low power mode…(and) there was no default account setting to which virtual currency mined during the setup process was directed and transferred.”

Gevorkyan, a resident of Los Angeles County, adds, “Recently, Bitmain modified the startup procedure for its ASIC devices such that the devices immediately start in full power high energy consumption mode before the customer’s account is linked to the device and stay in that mode until the setup process is complete. Moreover, the default account setting on the Bitmain ASIC devices is set to contribute to Bitmain’s own account on its own Antpool server.”

Configuring a new crypto miner can take a couple of hours or a couple of days, depending on what operations are to be run. Gevorkyan indicates that, during this time, “Bitmain’s ASIC [application-specific integrated circuit] devices are preconfigured to use its customers’ electricity to generate cryptocurrency for the benefit of Bitmain rather that its customers…and lay the substantial costs of operating the ASIC devices at the feet of its customers….(resulting in) out of pocket losses.”

The plaintiff further asserts that the case can legally be heard in California because Bitmain maintains an office in the state. This past July, the company opened an office in Silicon Valley.

Gevorkyan is seeking $5 million, which the lawsuit asserts is on behalf of all cryptocurrency miners. Companies that may have purchased large quantities of Bitmain’s equipment could have unknowingly been contributed to the company’s control of hash power at virtually no cost to Bitmain.

Nelson M. Rosario, addressed the lawsuit in a post last week. In a blog post on theblockcrypto.com called Crypto Caselaw Minute, the blockchain lawyer stated, “If these allegations are true (and we are not saying that they are) … that’s, that’s not good. Even under some sort of theory that customers agreed to this under the terms & conditions of their purchase, or something like that, this is not a good look regardless of its legality. With respect to its legality, the plaintiff is alleging unfair business practices, unjust enrichment (receiving a benefit at someone else’s expense), and conversion (basically stealing).”

The post Bitmain facing class-action lawsuit over mining operations appeared first on Coingeek.

Read More

Bitmain首次公开上市(IPO) 带来的危机以及Bitmain在比特币现金哈希算力大战中的战斗

在考虑任何具体的首次公开上市时,退一步思考并提出最基本的问题将大有裨益。公司究竟为什么要上市?最初为什么会出现资本市场?出售一家公司的股票有什么意义?当然,答案就是为了筹措资金并最终将其重新投资到公司的发展之中,而代价就是与众多股东共享利润。

人们期待已久的Bitmain IPO即将到来,而投资者也许希望退后一步思考,同样向自己
提出这些最基本的问题。首先,Bitmain为什么决定上市?我们可以一如既往给出一个标
准答案,其中一定程度上也会包括一些真实信息。比如说,Bitmain希望筹措资金来发展
公司,这是完全合法的。但对于Bitmain来说,有些情有可原的情形使其不得不去进行IPO,而这对于初期投资者来有可能存在风险。

比如说Bitmain的资产负债表。您可以在Bitmain向香港证券交易所提交的申请版本的
第216页找到它。截至6月30日,公司持有价值8.87亿美元的加密货币。其中大多数为比特币现金(BCH)。6月30日,比特币现金的美元价位为大约728美元,这意味着Bitmain大约持有比特币现金市场资本的7%,超过了比特币现金的24小时平均交易量。而Bitmain仅持有(截止至6月20日)3.43亿美元的现金或现金等价物。

由于Bitmain是最初从事生产、推广私有去中心化货币的大型公司之一,注定会遇到一些其它产业中的任何公司从未遇到过的财务问题。最为明显的问题之一就是,它如何收取服务费?当然,完全以现金支付是个很好的选择,但如果Bitmain不接受以自己实际上正在推广的加密货币付款,实质上就会自相矛盾。

为此,Bitmain接受用加密货币付款购买其挖矿硬件和ASIC芯片,这正是为什么它积累的加密货币越来越多,此外还有内部挖矿运营中所产生的收益。但怎么处理这些加密货币呢?无论加密货币支持者有多么坚定,但现实在于加密货币并不具备现金的流动性。现金的基本特点之一就是流动性,使其在完成任何大小的交易之后继续保持相对价值。只要缺乏流动性,那就仅仅是一种资产或保值手段,而不能发挥现金的作用。在某种程度上,这一类别包括了大多数商品,并不需要大费周折地讨论。事实就是如此。举例来说,石油。短短不到六周的时间就下跌了23%。再过六周石油的价位是多少,没人知道。世界各地各行各业都在使用石油,但是它却不是现金。

在加密货币真正成为现金之前,可能还需要许多年,Bitmain仍然需要面对这个复杂的问题。如果Bitmain想要筹措资金,要么拒绝接受使用加密货币购买自己的产品、只接受现金,要么出售加密货币变现。第一种方法会让Bitmain看起来虚伪无比,而第二种方法会极大地损害其资产负债表。因此只有另一种选择——首次公开上市。

这本身并不是一种危险信号。如果Bitmain必须通过上市才能融资,那没什么问题。但这会导致其它结构性问题,导致这次首次公开上市面临风险。让我们来看一看为什么。

当Bitmain三分之二的流动资产(根据最初财务报表公布之后比特币现金价位波动推断得
出)流动性较差时,如何避免资产负债表出现大幅波动?或者,由于Bitmain无法一次性出售比特币,因为这样会导致其大部分资产的市场价格崩溃,那么Bitmain是如何将比特币现金作为直接现金呢来使用呢?那就要采用一些财务技巧。根据其上市前发布的财务报表,Bitmain将加密货币记为“成本,而不是在每个会计参照日重新评估加密货币的公允价值,以期避免加密货币价位短期内出现大幅波动,这有可能会歪曲我们的运营结果以及财务状况。” 这情有可原,但当加密货币的价值出现大幅波动时,如何将这种波动记入损益呢?减去净处置收益并将其作为处置日的总体损益。

换句话说,Bitmain在这里白纸黑字地披露的是,只要它不出售加密货币,那么这些货币就以购置日期的价值记入资产负债表(对于Bitmain来说,其持有的比特币现金价值要高于当前的市场价位)出售这些资产,它就必须披露账面损失。持有这些资产,严格意义上来说,资产负债表看起来仍然很好,因为这掩盖了价格波动。

当然,这些风险必须加以管理。但在Bitmain IPO申请第179页的加密货币风险管理一章中,
并没有多少实质性的内容。一般来说,这类波动资产的风险管理要包括期权或者期货对
冲。假设某家航空公司希望控制航空燃油价格的波动性,则可以在价位较低时买入看涨期权,或在价位较高时买入看跌期权。或者某家希望控制利率风险的公司会进行利率掉期交易来固定浮动利率借贷成本。然而,这里的问题在于使用加密货币衍生品来控制资产本身的风险并不可行,因为购买足够数量的衍生品来控制资产本身的风险会让资产价格向不利方向发展。缺乏流动性的问题依旧不变。切实的风险管理根本不可能。Bitmain将其风险管理策略概括如下:

我们的财务部会每天监控正常运营所收加密货币的市场价格波动量,并且根据公司运营以及现金流需求建议管理团队将加密货币兑换为标准货币。

言外之意,Bitmain实际上是说它只能为了满足运营和现金流需求才会将加密货币兑换为标准货币。这里没有提到的是它不能出售加密货币来筹措资金去发展公司 。当然,如果
Bitmain需要筹集发展资本,它不能出售其持有的大部分比特币现金(BCH),因为任何大规模的出售行为很有可能会导致其主要资产比特币现金(BCH)的市场价格下滑。Bitmain陷于两难之地,这也是它需要首次公开上市的原因。面前没有其它道路可选。

但是这还会导致另外一个结构性问题。整个加密货币行业得以壮大的政治原因就在于去中心化。这是加密货币如此令人兴奋的原因。这是加密货币如此与众不同的原因。这也是加密货币具有划时代意义的原因。但这也是使得加密货币成为对于像Bitmain这样的市场领导者的一把双刃剑。进入加密货币挖矿设备制造以及挖矿活动本身的门槛几乎已经不复存在。几乎没有任何许可证要求。人们不需要投入数百万美元来申请一张人为导致稀缺的许可证才能开始运营。

在主流行业中,市场主导者一直游说政府施加更多的管制与保护,实质上就是建立起一道保护网来将竞争者排除在外。对于Bitmain或任何在这一行业中力争上游的竞争者来说,能采取这种做法的可能微乎其微。尽管各国政府可能会在不同程度上允许加密货币行业的存在,但政府与加密货币之间建立起共生关系(或寄生关系,取决于从哪一方的角度来看待这个问题)基本是不可能的事情。

再者,行业的客户群体十分集中、易于识别、并且相互联系。有效、高效地游说行业中有影响的人并不难。当然,这非常好,但同时这也让任何公司都无法占有过多的主导地位。

直到现在,Bitmain一直处于主导地位,但它从加密货币行业尚处于襁褓之中时起就一直发挥着主导作用。随着比特币现金成为真正的比特币,而其他竞争币逐步得到认可,其他公司将加入这场竞争——实际上许多公司已经置身其中。在市场最终恢复平衡之前,每家行业参与者的利润率只会越来越低。对于Bitmain来说,利润率已经大幅下降,从2016年的41%下降到了今年的26%。其他挖矿设备制造商逐渐壮大并参与竞争,例如Canaan、eBang、Whatsminer以及其它厂商,Bitmain的利润率还将进一步下滑。

Bitmain的IPO估值将基于其未来的增长预测,而这主要基于它已经披露的财务信息以及过去在整个行业刚刚起步并且进入前所未有的阶段时所披露的信息。Bitmain作为先行者之一最初取得的巨大成功不可能长期延续下去。无论从最初市场竞争的角度来看,还是从加密货币的中期价位来看,闪电战的时代已经终结。如果Bitmain初期获得市场资本是由于早期的增长预测,那么随着主流投资者开始意识到这样的增长率无法长期维持时,其股价将会开始下滑。

哈希算力大战带来的风险

对于Bitmain及其IPO,让财务状况变得更有风险的是,Bitmain正在准备就11月15日比特币现金协议升级打一场代价极为昂贵的哈希算力战争。这场哈希算力大战将会让Bitmain面临耗费更多现金或加密货币储备的危险。

在即将到来的比特币现金哈希算力大战中,Bitmain站在Bitcoin ABC的阵营。Bitmain从比特币现金诞生以来一直支持长期处于领导地位的比特币现金(BCH)全节点实现。然而,
由于Bitcoin ABC技术路线图寻求改变最初的比特币协议,CoinGeek(最大的比特币现金
挖矿组织)对此持不同意见,转而支持新兴的比特币现金实现竞争对手Bitcoin SV。 Bitcoin SV,意为比特币“中本聪愿景”(Satoshi Vision),旨在实现中本聪最初在比特币白皮书和协议中描述的愿景。与ABC等其它竞争比特币现金实现不同,Bitcoin SV的路线图是恢复最初的中本聪协议,让其保持稳定,使其可以实现大规模扩容,并且给大公司信心去进一步发展壮大比特币现金。

在这场大战中,与CoinGeek一道支持Bitcoin SV的还有一家主要区块链研发公司nChain,
其拥有自己的下属挖矿组织BMG Pool。nChain首席科学家克雷格·怀特博士(Dr. Craig Wright)的个人项目SVPool以及新矿池Mempool均支持Bitcoin SV。根据Coin.dance公布
的数据,截至2018年11月12日,比特币现金的总挖矿哈希算力中,大约62%到72%支持Bitcoin SV。因此,在即将到来的哈希算力大战中,Bitcoin SV已经获得了超过了自己所需的绝对多数算力支持。

据报道称,Bitmain正准备启用位于新疆的矿机,数量在9万甚至15万台之多,而在哈希算力大战中将用其支持Bitcoin ABC。如果这一报道属实,人们一定想知道已经向Bitmain
订购的矿机但尚未收货的客户听到自己购买的设备将被Bitmain挪作他用后感受如何。

此外,有消息称,Bitmain将“租赁”或补贴临时哈希算力来从比特币网络迁移至比特币现金网络,从而在哈希算力大战中为Bitcoin SV提供更有力的支持。这些租赁哈希算力将来自
Bitmain控制的比特币矿池(Antpool和BTC.com)或与其关系密切的矿池(BTC.top)。如果矿工在哈希算力大战中转而挖掘比特币现金所获得的收入要低于留在比特币网络中原本可获得的收入,就要求Bitmain每天支付数百万美元来补贴矿工。 CoinGeek与nChain已经宣布在这场哈希算力大战中将坚持到底,从而捍卫最初的比特币愿景。因此,如果Bitmain每天支付数百万美元来租赁比特币哈希算力来推动其对比特币现金的理念,很快就会耗尽数千万美元的现金或加密货币储备。这笔钱当然要来自于之前的投资者或者Bitmain股东拥有权益的资金,而Bitmain需要履行受托人责任来正确地管理资金。

Bitmain IPO未来的投资者不大可能愿意用自己投入的资金来支持一只加密货币的持久战,
而Bitmain的经营支持着多种加密货币。

因此,这场哈希算力大战将发生在Bitmain及其IPO极为脆弱的时刻,而Bitmain的投资者和股东应当提出这样一个简单的问题: Bitmain改变比特币现金的理念是否如此重要,以至
于可以去冒着风险在未来长时间内耗尽其巨大的现金与加密货币储备。

结论

一家核心加密货币公司发起IPO的概念本身就会带来一些利益冲突。一家挖掘私营去中心化货币、与政府中央银行管制相竞争的公司运用中心化政府管制市场去筹措现金,会让人心里感觉不是滋味。您越是坚信比特币现金是未来的货币,就更难以去解决这种两难之局。

Bitmain需要IPO,但却质疑整个加密社区是否需要这种融资机制。未来一两年中,这种二元论的结论将变得更加显而易见。

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Bitmain首次公开上市(IPO) 带来的危机以及Bitmain在比特币现金哈希算力大战中的战斗 appeared first on Coingeek.

Read More

Jihan Wu out as top man of Bitmain board

It would appear that Bitmain co-founder and CEO Jihan Wu has lost his throne. According to Chinese media outlet 8btc.com, Wu has stepped down as executive director of the board of the cryptocurrency mining equipment manufacturer. In relinquishing his position, Wu is now a board supervisor, meaning he has no influence in the corporate decision-making process. Wu was replaced by Zhan Ketuan.

A lawyer for the company told the Chinese media outlet that the decision to remove Wu as the director is nothing more than a “redistribution of power.” In addition to Wu’s reassignment, four of the six board members have also quit their positions. Three of them were directors, while the fourth was a member of the board of supervisors. The move was reportedly made in anticipation of the as-of-yet still unscheduled initial public offering (IPO) expected by Bitmain.

The announcement of the personnel changes reads, in part, “As a director, [Wu] had the right to vote when the board makes decisions. However, after changing to a supervisor, his power becomes smaller that he can no longer vote. As thus, Wu will be unable to participate in the business decision-making but only serve as a supervisor.”

The timing of the changes is suspect. They come only days ahead of the Bitcoin BCH hard fork and at the same time Bitmain is set to release two new mining rigs, the S15 and the T15.

The hard fork could be especially costly for the company. Bitmain is reportedly trying to increase its hash output, which is turning into an expensive proposition. Bitmain supports Bitcoin ABC and the ongoing hash war shows overwhelming support for Bitcoin SV. Monday saw Bitcoin SV controlling 66% of the hash, but this figure is now up to 73%, according to Coin Dance.

While the company positions the “adjustments” as normal courses of action ahead of an IPO, there might be deeper reasons. There is reportedly significant in-fighting between Wu and Bitmain’s other co-founder, Micree Zhan. Zhan services as the head of technology R&D for the company and wants Bitmain to become a company focusing on chip making—as its prospectus indicates. However, Wu is turning his focus more to cryptocurrency mining and the blockchain.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Jihan Wu out as top man of Bitmain board appeared first on Coingeek.

Read More

The Dangers of a Bitmain IPO and Bitmain’s Fight in the BCH Hash War

When thinking about any specific initial public offering, it’s helpful to take a step back and ask the most basic of questions. Why do companies go public at all? Why are there capital markets in the first place? What’s the point of selling shares in a company? The answer is, of course, in order to raise money that will ultimately be reinvested in growth at the price of sharing profits with stockholders.

The long-anticipated Bitmain IPO is imminent, and investors may want to take a step back and ask themselves the same basic question. Why is Bitmain going public in the first place? We can always just give the standard answer that no doubt has some truth to it. Bitmain wants to raise money to grow the company, and that’s perfectly legitimate. But in the case of Bitmain, there are extenuating circumstances that make an IPO almost imperative, and that could be dangerous for initial investors.

Consider Bitmain’s balance sheet. You can find it on page 216 of their Application Proof to the Hong Kong Stock Exchange. As of June 30, 2018, the company held USD $887M worth of cryptocurrencies. Most of that is held in Bitcoin Cash (BCH). On June 30th, the USD price of BCH was around $728, which means that Bitmain holds about 7% of the BCH market cap, more than the currency’s average 24-hour trading volume. Bitmain only held (as of June 20) $343M in cash or cash equivalents.

In mainstream industries, market leaders constantly lobby for more and more government regulation and protection that basically builds a protective wall to keep out competitors. It is highly unlikely that Bitmain, or any other contender for market leader in this industry, will be able to do this. While governments may tolerate the cryptocurrency industry to a greater or lesser extent, a symbiotic (or parasitic, depending on what side you’re on) relationship between government and cryptocurrencies is a nonstarter.

Further, the industry’s customer base is concentrated, easily identifiable, and interconnected. It doesn’t take much effort to advertise to the movers effectively and efficiently. This all is of course a wonderful thing, but at the same time it serves to keep any one firm from being too dominant.

Up until now, Bitmain has been dominant, but its dominance has only been through the infant bubble phase of the cryptocurrency industry. As BCH as the true Bitcoin and altcoins gain more acceptance, other firms will enter the fray – indeed many already are – and profit margins for everyone will start to fall until the market eventually finds equilibrium. For Bitmain, profit margins have already fallen substantially, from 41% in 2016 to 26% this year. They will continue to fall as competition from other mining rig manufacturers ramps up – such as from challenges Canaan, eBang, Whatsminer, and more.

Bitmain’s IPO valuation will be based on growth projections that will be based on the financial disclosures it has already made, disclosures based on the past, on the beginning of an entire industry in the rare phase when it was on fire. Its initial wild success as one of the first movers in mining are unlikely to be sustained long term. The blitz is over, both in terms of the initial lack of competition, and in terms of the price of cryptocurrencies themselves in the medium term. If Bitmain’s initial market cap is based on growth projections using its early growth figures as a starting point, its share price will likely start to deteriorate as mainstream investors begin to realize that those growth figures are unlikely to be sustained.

Hash War Dangers

Making financial matters even more risky for Bitmain and its IPO, Bitmain is preparing to fight a very expensive hash war over the BCH protocol, which will upgrade on November 15. This hash war could lead Bitmain to perilously deplete even more cash or cryptocurrency reserves.

In the upcoming BCH hash war, Bitmain is backing Bitcoin ABC, the historically lead full node implementation for BCH which it has been supporting since the BCH was birthed However, due to disagreements with Bitcoin ABC’s technical roadmap which seeks to change the original Bitcoin protocol, CoinGeek (the largest BCH miner) is backing a new competing BCH implementation called Bitcoin SV. Bitcoin SV, which stands for Satoshi Vision, is designed to fulfill the vision set out by Satoshi Nakaomoto’s original Bitcoin white paper and protocol. Unlike other competing BCH implementations such as ABC, Bitcoin SV’s roadmap is to restore the original Satoshi protocol, keep it stable, enable it to massively scale, and allow major businesses to confidently build on top of BCH.

It has been reported that Bitmain is preparing to activate 90,000 to even 150,000 new mining rigs in Xinjiang, and itself operate them to support Bitcoin ABC in the hash war. If that is true, one must wonder whether customers who have ordered mining rigs from Bitmain but have not yet received new rigs will be happy to know units are being re-directed for Bitmain’s own purposes.

The hash war comes at a fragile time for Bitmain and its IPO, and should make Bitmain’s investors and shareholders ask this simple question: is Bitmain’s ideological view of changing BCH so important as to risk depleting huge amounts of Bitmain’s remaining cash and cryptocurrency reserves for a long period of time?

Conclusion

The concept of an IPO for a cryptocurrency mainstay is itself something of a conflict of interest. A company in the business of mining decentralized, private currency that competes with government central-bank-controlled fiat, itself utilizing centralized government-regulated markets in order to raise fiat cash, can leave a sour taste in your mouth. The deeper you believe in BCH as the future of money, the harder it is to square the circle here.

Bitmain needs this IPO for itself, but it is doubtful that the broader crypto-community needs it as a whole. In a year or two, that dichotomy may become glaringly evident.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post The Dangers of a Bitmain IPO and Bitmain’s Fight in the BCH Hash War appeared first on Coingeek.

Read More

Bitmain announces new mining chip, shies away from details

Chinese cryptocurrency mining manufacturing giant Bitmain has introduced two new mining options to its Antminer line. They’re both reportedly 7 nanometer (nm) miners, which is about all the company offered in the way of details.

In a Twitter post yesterday, Bitmain announced the launch of the miners, stating, “We are officially announcing the release of our new 7nm miners which possess industry-leading hash rates designed to mine with the SHA256 algorithm. Two models will be offered, the Antminer S15 and T15. Available for purchase on 11/8 [Nov. 8].”

“Industry-leading hash rates” don’t really indicate anything. Looking at the company’s website, there didn’t appear to be any new information, either, and the picture provided to represent the equipment is nothing more than a silhouette of what looks to be part of a normal mining rig.

It seems a little odd that the company would be pushing out new miners without offering any specifications. Squire released full details on a mining option that isn’t even ready to be distributed yet.

This would seem to be more of a ploy to generate interest in the company’s impending, and delayed, initial public offering (IPO), than an announcement of a spectacular advance in the world of cryptocurrency mining. With a large chunk of its assets tied up in product that it hasn’t been able to move due to a decline in mining interest globally, offering new mining options seems to be counterproductive to increasing the company’s profit margin.

Only two days ago, reports surfaced that Bitmain could be close to losing several agreements with suppliers of chips for its mining equipment. It reportedly owed the Taiwan Semiconductor Manufacturing Company $1 billion, of which it was able to (finally) repay $700,000. It still has to pay the $300,000 balance. Accumulating debt of $1 billion doesn’t seem to be a solid financial decision.

The growing amount of debt, the number of false representations the company has made and a loss of control of market share are taking a serious toll on the company. Its planned IPO, and an application filed with the Hong Kong Stock Exchange for the IPO, have been called into question and are seriously questioning the legitimacy and financial integrity of the company.

It might be time to put the clamps down on the company and allow regulators to take an in-depth look at how viable the company is before allowing it to move forward.

Note: Tokens on the Bitcoin Core (segwit) Chain are Referred to as BTC coins. Bitcoin Cash (BCH) is today the only Bitcoin implementation that follows Satoshi Nakamoto’s original whitepaper for Peer to Peer Electronic Cash. Bitcoin BCH is the only major public blockchain that maintains the original vision for Bitcoin as fast, frictionless, electronic cash.

The post Bitmain announces new mining chip, shies away from details appeared first on Coingeek.

Read More
Top